NEW YORK/LONDON: Copper fell 2 percent on Thursday for its biggest loss in at least two months as fears heightened over the global economy, although a strike at the world's largest copper mine helped limit losses.
Copper futures fell to $9,331 a tonne in London, plumbing a bottom seen in June, before closing off that low. In New York, the metal scraped a five-week trough at under $4.23 a lb.
The selloff came amid a global stampede away from riskier assets as investors began to panic over signs that already faltering US economic growth may stall completely.
Data showing a bounce in US retail sales for July and a drop in the number of Americans claiming new unemployment benefits did little to alleviate the dark mood in many markets.
The S&P 500 index on Wall Street fell almost 5 percent for its sharpest one-day loss since February 2009 as investors braced for more signs of weakness in the US government's monthly jobs report due on Friday.
Even so, copper's losses paled beside some other commodities. US crude oil tumbled 6 percent for its biggest drop in three months, wiping out gains for the year.
In copper's case, the benchmark three-month contract on the London Metal Exchange fell $191 -- exactly 2 percent -- to close at $9,355 a tonne. It was the contract's deepest correction since June 2.
US copper futures' most-active contract, September, settled down 9.05 cents -- 2.1 percent -- at $4.2355 a lb on the COMEX metals division. It was the market's biggest slide since May 23.
"Copper probably has more things going for it now than most commodities, particularly on the supply side with the ongoing strike at Escondida," said Peter Buchanan, commodities analyst and senior economist at CIBC in Toronto.
"The post-earthquake rebound in Japan, whenever it happens, is also likely to help copper more than other commodities."
Workers at Chile's Escondida, the world's largest copper mine, were to vote later on Thursday on a bonus offer aimed at ending a 14-day strike, which has raised the spectre of more unrest at other mines.
Mine owner BHP Billiton on Wednesday defied the striking workers, resubmitting an offer they snubbed last week and saying it would take steps to resume operations.
Trouble brewing at other copper mines around the world is also supporting prices of the metal. In Indonesia, the union representing workers at Freeport McMoran Copper & Gold's giant Grasberg mine has indicated a likely strike if demands for a 20-fold pay rise are not met.
Among other base metals, tin hit its lowest level since the end of June at $25,450 a tonne and ended at $25,505, from $26,300 at Wednesday's close.
Zinc, used to galvanize steel, ended at $2,330 from $2,377, while battery material lead fell to $2,490 from $2,522. Nickel closed at $23,650 from $23,805.
Copyright Reuters, 2011
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