Base metals tumble

Industrial metals tumbled on Wednesday with copper sinking more than 7 percent as weaker demand and slower growth fears dominated sentiment. Copper for delivery in three months on the London Metal Exchange closed at $4,920 a tonne, down $378 from Tuesday's closing bid of $5,298.
Aluminium tumbled almost 5 percent, while nickel sank more than 6 percent as investors worried that government efforts in the last week to bail out banks would not avert a global recession or solve the credit crisis. "We see prices falling as a part of broader downturn that we are seeing in base metals prices," analyst Gayle Berry said, referring to the recent sell-offs in metals due to weaker demand worries.
Expectations of weaker global demand for metals were reinforced after the world's largest copper producer Codelco said the premium for refined copper in Europe will be lower around $80 a tonne in 2009. "That's probably the biggest single piece of news today that would pull the copper price back," analyst John Meyer at investment bank Fairfax said on the Codelco update.
"They are focusing more on the demand side things world-wide." "It's (also) growing awareness of the impact of the credit crisis on the real economy on a wider basis. Eastern Europe as a region saw growth in shipments of construction machinery fall to 20 percent yoy in August from 33 percent yoy in July."
Prices of copper used in power and construction have fallen more than 40 percent since a record high of $8,940 in July as demand fears and economic concerns weighed. Also weighing on negative sentiment was further gloomy data from the United States.
US retailers posted their biggest monthly sales decline in more than three years in September, while a gauge of manufacturing in New York state tumbled in October to the lowest since its inception in 2001. Global miner Rio Tinto warned of slowing Chinese demand for commodities because of the global crisis.
Aluminium dropped to $2,170 a tonne from $2,282. The metal, used in transport and packaging, has come under pressure in recent weeks on news of deteriorating car sales data. The weak backdrop was highlighted after Aluminium Corp of China Ltd (Chalco) said it is temporarily shutting around 1 million tonnes of alumina capacity at its Shandong plant due to low prices.
The closure would leave Chalco's Shandong plant running at about 200,000 tonnes, out of 1.5 million tonnes of capacity. Nickel prices fell more than 6 percent. The stainless steel raw material tumbled to $11,955 from $12,800 on Tuesday.
Standard Bank said nickel prices had come under increasing pressure this year as a consistent recovery in stainless steel production failed to materialise. Lead fell over 7 percent and closed at $1,515 per tonne from $1,640 while zinc was down $90 at $1,320. Tin lost 6.3 percent to $14,050 from $14,995.