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Copper futures in New York opened down on Tuesday and steadied at lower levels after a sharp decline in U.S. housing starts weighed on sentiment and reinforced views that demand for industrial metals is on the decline, sources said.

However, the market garnered support from a softer dollar following an unexpected dip in U.S. core producer prices, which bolstered the view that the U.S. Federal Reserve will keep interest rates steady on Wednesday.

"I think the PPI numbers are a little offsetting to the housing data, in so much that it shows the economy is cooling and inflation seems to be in check," said one broker at a New York trading house.

By 10:37 a.m. EDT (1437 GMT), copper for December delivery was down 4.75 cents, or about 1.4 percent, at $3.3670 a lb on the New York Mercantile Exchange's COMEX division, just off the bottom of its early $3.3650-$3.4250 trading band.

Technicians continued to eye the $3.30 level as first support in December copper, while resistance was pegged at $3.50.

Spot September fell 3.80 cents to its morning low of $3.38.

COMEX copper volume at 9:00 a.m. was estimated at 2,000 lots.