Turmoil in financial markets has weighed on metal prices for several months

Tag : lead,copper
Industrial metals got hammered onMonday, with copper tumbling to its lowest in nine months, as astrong U.S. dollar and spreading bank crisis triggered a sell-offacross commodities.
Authorities rescued several European banks while U.S. lawmakers metto vote on a $700 billion bailout of the financial industry. Majorcentral banks threw more resources at a deepening worldwide creditcrisis, but it was not enough to calm markets. European sharesdropped to a three-and-a-half year closing low, with banks weighingon the benchmark index. Other metals also tumbled, with aluminiumfalling to a nine-month low and lead sinking by more than 6percent.
Copper for delivery in three months on the London Metal Exchangeclosed at $6,440 per tonne, its lowest since mid-December 2007, andcompared to $6,775 on Friday.
"It's de-leveraging, risk aversion, fund selling, economic growthconcerns," said Daniel Brebner, global head of commodities at UBS (nyse: UBS - news - people ), referring to the reason of the fall.
"All of these clearly reflect a tremendous amount of negativesentiment, negative momentum."
Turmoil in financial markets has weighed on metal prices forseveral months. Copper, used in construction, has lost more than 25percent since a record high of $8,940 on July 2.
The dollar extended losses against the yen amid rising riskaversion as foreign exchange investors expressed concerns aboutfurther instability in the global banking system following bankbailouts in Europe and the United States.
Leon Westgate at Standard Bank said the market also was focusing onsluggish demand for metals from the United States and Europe, andsaid that even if top copper consumer China was still doingrelatively well, its future looked uncertain.
"It is now up to the Chinese and it depends on how badly theireconomy has been impacted by this downturn," he said.
The Shanghai Futures Exchange will be shut this week for NationalDay holidays.

DEMAND DESTRUCTION
"Although the jury is still out as to whether the bailout packagewill work, there is much less debate about the fact that the macrostats coming out of the U.S. and the rest of the world continue tolook very bleak," Edward Meir at MF Global said.
"That is why this week's U.S. numbers are important, as they willgive us a better idea of how quickly the economy is resuming itsdownward slide," he said. The Commerce Department said consumerspending was flat in August after barely edging up by a revised 0.1percent in July, a much weaker outcome than forecast by Wall Streeteconomists surveyed by Reuters who had a 0.2 percent spending rise.
Fundamentals for particular metals did not look very promisingeither. For nickel, expectations are the market will show a surplusuntil 2011.
"The market is under pressure from supply growth and demanddestruction," it said, adding prices were forecast to bottom at $6per pound ($13,228 a tonne) in 2009," Citi said in a note.
The metal, used by stainless steelmakers, ended the day at $16,400from Friday's $17,000.
Lead fell more than 6 percent to a low of $1,816 a tonne. It endedthe day at $1,830 per tonne from $1,960 on Friday. Three-month zincclosed at $1,693 a tonne, down $77.
Lead and zinc have lost around a quarter and nickel has shed 35percent since the start of the year.
Aluminium lost $52 to $2,442 while tin was at $17,800 from Friday'slast quote at $18,100/18,105.
Metal Prices at 1605 GMT Metal Last Change Percent Move End 2007Ytd Percent
move LME Cu 6451.00 -324.00 -4.78 6670.00 -3.28 SHFE Cu* 53360.00-80.00 -0.15 56880.00 -6.19 LME Alum 2438.00 -56.00 -2.25 2403.001.46 SHFE Alu* 15620.00 110.00 +0.71 18180.00 -14.08 #VALUE! LMEZinc 1681.00 -89.00 -5.03 2370.00 -29.07 SHFE Zinc* 14240.00 -25.00-0.18 18950.00 -24.85 LME Nick 16350.00 -650.00 -3.82 26350.00-37.95 LME Lead 1820.00 -140.00 -7.14 2550.00 -28.63 LME Tin17500.00 -100.00 -0.57 16400.00 6.71 ** 1st contract month forCOMEX copper * 3rd contact month for SHFE AL, CU and ZN SHFE ZNbegan trading on 26/3/07
(Additional reporting by Pratima Desai and Humeyra Pamuk; editingby Michael Roddy) Copyright 2008 Reuters, Click for Restriction