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INDUSTRIAL metals slumped overnight as global economic concerns continued to bite.
In an attempt to stem the worst global financial crisis since the 1930s, the US Federal Reserve, European Central Bank, Bank of England, Switzerland, Canada and Sweden all lowered official rates by a half-percentage point.
The People’s Bank of China, in what appeared to be the first time it had coordinated with the Group of Seven advanced industrial nations, also lowered its key rate, but by a more modest amount.
“The coordinated action is positive but it doesn’t really impact on the immediate demand outlook for base metals,” Leon Westgate, analyst at Standard Bank, said.
“After the initial euphoria there is still concern about the global economic outlook and demand for metals.”
LME copper often seen as a key gauge of real economic activity fell 7.1 per cent to the lowest level since March 2006 at $US5227 a tonne in early trade. It closed down $US385 at $US5240.
In New York, copper for December delivery plunged 17.95c, or 7 per cent, to settle at $US2.3550 a pound on the New York Mercantile Exchange’s COMEX division, its lowest level on a closing basis since February 14, 2007.
Bill O’Neill, partner of LOGIC Advisors in Upper Saddle River, New Jersey, believed confidence, or the lack thereof, was the real key plaguing global markets.
“Until we get some change there, certainly the atmosphere for gold will continue to be very positive and for copper and the base metals it will continue to be negative,” Mr O'Neill said.
The price of copper is down over 40 per cent since touching a record of $US8,940 per tonne in July and $US4.27 a pound in May of this year.
“We're still looking at the prospects of global demand for copper to be weak. The supply/demand equation into at least the first half of 2009 sets up weakly for copper,” Mr O’Neill added.
 Aluminium fell to a near three-year low of $US2,230 a tonne before recovering to $US2,250, compared with $US2,303 on Tuesday.
Rio Tinto said it restarted idled production at its Tiwai Point aluminium smelter in New Zealand.
Output at the 350,000 tonnes a year plant was cut by 11 per cent in May to conserve electricity.
Stocks of the metal in LME warehouses at more than 1.39 million are the highest since February 2004.
Tin fell 8.6 per cent to $US14,800 in early trade, down from $US16,200 on Tuesday. It closed at $US14,900.
Lead closed at $US1,575 from $US1,630 after touching a three-month low of $US1,566, while zinc declined to a three-year low of $US1,430 from $US1,550.
Nickel fell 8.6 per cent to a 35-month low of $US12,975 a tonne. It closed at $US13,200.
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