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 Posted - 10/15/2008 : 18:01:10
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8-Industrial metals tumble on recession fears
Wed Oct 15, 2008 3:26pm EDT Email | Print | Share| Reprints | Single Page | Recommend (0) [-] Text [+] Market News
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Trading will never be the same. * Copper sinks more than 9 percent as equities tumble * Codelco sees lower production, premiums * Global markets down as economic worries linger
(Changes headline, adds byline and NEW YORK to dateline, recasts,
updates with New York closing copper prices, adds stock market
data, analyst comments) By Michael Taylor and Chris Kelly NEW YORK/LONDON, Oct 15 (Reuters) - Industrial metals tumbled
on Wednesday, with copper plunging more than 9 percent in late
business as a sharp downturn in U.S. equity markets reinforced
fears of a global economic recession. Copper <MCU3=LX> for delivery in three months on the London
Metal Exchange (LME) closed at $4,920 a tonne, down $378 from
Tuesday's closing bid of $5,298. In after-hours electronic
business, the red metal fell as low as $4,820. In New York, copper for December delivery HGZ8 plunged 18.40
cents, or 7.7 percent, to close at $2.2105 a lb on the New York
Mercantile Exchange's COMEX division. After the close, it touched a low of $2.1460. "It looks like it's tracking the stock market pretty closely
... taking its cues from there," said Michael Gross, futures
analyst with Optionsellers.com in Tampa, Florida. Fears of a worldwide economic slowdown slammed equities late
Wednesday, with the Dow Jones industrial average .DJI losing
more than 6 percent of its value at one point. Federal Reserve Chairman Ben Bernanke also added to the
tension in financial markets after acknowledging the U.S. economy
still faced significant threats. [ID:nN15308065] In other metals traded on the LME, 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.
[ID:nSP378368] "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 leading global copper producer Codelco said the
premium for refined copper in Europe will be lower around $80 a
tonne in 2009. [ID:nLF42496] "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 worldwide." Indeed, news of a port worker strike at Antofagasta, a main
conduit for metal exports from Chile's major mining region, failed
to stem the red metal's downward price momentum. [ID:nN15332513] 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. RISK ALERT Also weighing on negative sentiment was further gloomy data
from the United States. U.S. 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 (RIO.L: Quote, Profile, Research, Stock Buzz) (RIO.AX: Quote, Profile, Research, Stock Buzz) warned of slowing
Chinese demand for commodities because of the global crisis.
[ID:nSYD356476] 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 Aluminum Corp of China
Ltd (Chalco) (2600.HK: Quote, Profile, Research, Stock Buzz)(601600.SS: Quote, Profile, Research, Stock Buzz) (ACH.N: Quote, Profile, Research, Stock Buzz) said it is temporarily
shutting around 1 million tonnes of alumina capacity at its
Shandong plant due to low prices. [ID:nHKG254173] The closure would leave the 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 MPB3 fell over 7 percent and closed at $1,515 per tonne
from $1,640 while zinc MZN3 was down $90 at $1,320. Tin lost
MSN3 6.3 percent to $14,050 from $14,995.
Metal Prices at 1902 GMT
Metal Last Change Pct Move End 2007 Ytd Pct move
LME Cu 4820.00 -480.00 -9.06 6670.00 -27.74
SHFE Cu* 41170.00 -1580.00 -3.70 56880.00 -27.62
LME Alum 2166.00 -116.00 -5.08 2403.00 -9.86
SHFE Alu* 14450.00 -60.00 -0.41 18180.00 -20.52
COMEX Cu** 222.35 -18.60 -7.72 303.05 -26.63
LME Zinc 1300.00 -110.00 -7.80 2370.00 -45.15
SHFE Zinc* 11575.00 -370.00 -3.10 18950.00 -38.92
LME Nick 11750.00 -1050.00 -8.20 26350.00 -55.41
LME Lead 1497.00 -143.00 -8.72 2550.00 -41.29
LME Tin 13800.00 -1195.00 -7.97 16400.00 -15.85
** 1st contract month for COMEX copper * 3rd contact month for
SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
(Additional reporting by Humeyra Pamuk in London; Editing by
Christian Wiessner)
_____________________________________________________________________
Closing metal prices in US$ for 15 October 2008:
Cu 2.24 down $0.1846
Zn 0.57 down $0.0476
Ni 5.2360 down $0.3742
Ag 10.12 down $0.84
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Industrial metals tumble on recession fears
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