Base metal prices ended on a firm footing on Monday as fund buying pushed prices higher. But some metals ended in the red yesterday, hurt my mixed US economic data and lessening concerns over a pay dispute at a major copper mine in Chile. On the fundamental front, supply concerns underpinning copper diminished as Codelco, the world’s largest copper producer, increased a wage offer to workers at its Chuquicamata mine, seeking to end a strike there. This deflated sentiment to base metals. Economic data from the US came on the mixed side as pending home sales fell 16 percent in November, a much larger fall than expected, but factory orders for the same month rose 1.1 percent compared with an anticipated 0.5-percent increase. Lead inventories on the LME climbed 400 tonnes and lifted the total inventories to a fresh six-year high of 147,175 tonnes. Inventory movements, apart from a solid copper stock rise, were mundane - nickel, tin, all remained at Monday's levels, although the overall total inched back towards the December 31 all-time high. Total LME inventories for all base metals stood at 6,241,497 tonnes on Tuesday. China’s PMI for December 2009 increased to 56.6 percent, being the highest since May 2008. Last month’s PMI rose 1.4 percent from November, and it had been the tenth consecutive month for the PMI to stay at above the benchmark 50 percent, indicating that the country’s manufacturing industry had been on steady recoveries. The country’s production index increased 2 percent to 61.4 percent in November, also being the highest since May 2008. Among the industries, nonferrous smelting and fabrication, however, did not vary much from the previous month. The new orders index was 2.6 percent higher than in November, reaching 61 percent last month, exceeding 60 percent for last year for the first time, which showed that the market demand had been improving in the manufacturing industry. Positive Chinese economic data could trigger an upside in base metal prices. But a stronger dollar could keep the price rise in base metals under check. On the macroeconomic front, the US is expected to announce economic data on ADP non-farm employment change and ISM non-manufacturing PMI today. If the data comes on the positive side then expectations of a rise in interest rates in the US could increase, thereby leading to a stronger dollar. Strength in the dollar could put pressure on base metal prices. Copper Copper prices are up with immediate support for MCX February contract seen at Rs.345.05. Further below, crucial support is seen at 342.75 levels. Whereas resistance is seen at Rs.353.55 levels & further upwards at Rs. 355 levels. Zinc Zinc prices are trading up with immediate support seen at Rs.116.50 levels for MCX January contract whereas crucial support is seen at Rs.115.20 level. Short-term resistance is seen at Rs.119.75 whereas major resistance is seen at Rs 121.70 levels.

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