Copper falls over 6.6 percent

Copper tumbled more than six percent to two-week lows on Thursday as markets priced in a deteriorating economic outlook and lower metals demand, given fading prospects that a deal to buttress the eurozone rescue fund will be reached at crisis talks this weekend.
Metals, seen as a proxy for underlying economic conditions due to their wide use in industry, were heavily hit on fears of a slowdown; lead, zinc and aluminium all plunged to their lowest in more than a year. Their decline far outstripped those of other commodities markets, where oil and agriculturals were down between one and two percent, while key share indicies in Europe and the US shed a lighter one percent in value. Benchmark copper on the London Metal Exchange (LME) closed at $6,735 a tonne, down 6.6 percent from $7,210 per tonne on Wednesday.
It hit a session trough of $6,710 a tonne, its lowest in two weeks, and was on course for its fourth consecutive day of losses and for a drop of more than 10 percent this week. It is now within reach of its 2011 trough of $6,635 hit earlier this month. "People are saying these metals are not trading on the fundamentals, they are trading on the macro, but there is nothing more fundamental in the world than the economic outlook," analyst Stephen Briggs of BNP Paribas said.
BHP Billiton, the world's largest miner, displayed caution in the face of short-term market volatility, warning on Thursday of increasingly wary customers, although it said its order books were full due to resilient Chinese demand. China is the world's largest copper consumer, accounting for roughly 40 percent of global demand of refined metal. Signs that Chinese buyers have returned to international markets quelled some concerns that China's tightening measures, or the European debt crisis, will impair copper demand. Monthly imports of copper products rose to a 16-month high in September. "Anecdotal reports suggest Shanghai bonded warehouse stocks are now sub 200,000 tonnes," said Standard Bank in a note.
Zinc, used to galvanise steel, slid 5.3 percent to $1,740 from $1,838 at Wednesday's close. It hit a session low of $1,718.50 a tonne, its lowest since July 2010. The global refined zinc market will see a surplus of 317,000 tonnes this year and a more modest excess of 135,000 tonnes in 2012, the Lisbon-based International Lead and Zinc Study Group (ILZSG) said on Wednesday. "We continue to think the zinc market is better balanced than these data suggest and, from a fundamental perspective, the zinc price should probably be stronger than today," Macquarie said in a research note.
Battery material lead also fell to a 15-month low of $1,775.00 a tonne, before closing at $1,790 from $1,870 at the close on Wednesday. The global lead market was in surplus by 153,000 tonnes in the first eight months of the year, ILZSG data showed. Tin closed at $21,200 from $21,925 down 3.3 percent while aluminium ended at $2,085 from $2,182, having fallen to a trough since September 2010 at $2,077.75 Nickel ended at $18,025 from $18,800, down more than 4 percent.