september and ex div week, page-84

Since the bears are having a picnic tonight, more to feed them: Copper is sinking fast.

UPDATE 3-Copper down on demand fears, aluminium at 7-mth low
Tue, Sep 2 2008, 10:09 GMT
http://www.afxnews.com

LONDON, Sept 2 (Reuters) - Copper dropped more than 2 percent and aluminium hit a seven-month low on Tuesday as the dollar rallied, the oil price tumbled and investors worried about demand for industrial metals.


"It's gloom and doom," said Sean Corrigan, chief investment strategist at Diapason Commodities Management.


"The world has woken up to the fact that economies are weakening pretty much across the globe."


London Metal Exchange three-month copper -- often seen as a key gauge of real economic activity -- had lost $145, or 2 percent, to $7,160 by 0907 GMT, after shedding more than $200 on Monday.


Earlier, copper hit an intraday low of $7,150, down 2.1 percent and the lowest price since Aug. 13.


Corrigan said it was vital copper holds at $7,000 a tonne.


"If it breaks then the next move could be to $6,600 and all the way down to $5,800," he said.


LME copper stocks are at their highest since January, at 179,800 tonnes, up by 64 percent since this year's low in May.


Aluminium -- used mainly in transport, packaging and construction -- shed 1.1 percent or $30 to $2,675 a tonne, the lowest price since Feb. 13.


The euro fell below $1.45 for the first time since February as a rapid oil price decline stoked expectations that lower inflation ahead will allow the European Central Bank to cut interest rates in the coming months.


A firm U.S. currency makes dollar-priced metals more expensive for holders of other currencies.


Crude oil's fall below $107 a barrel -- $40 off its record high struck in July -- sent the dollar index <.DXY> to its highest level since late October.


Investment bank Citi revised its copper, aluminium and zinc price forecasts downwards on the back of expectations of continued slowdown in global economic growth.


Citi said in 2009, aluminium is forecast to trade at an average of $180 per pound ($3,968 per tonne), down 10 percent from a previous forecast.


Citi forecast copper, used mainly in the power and construction sectors, at $475 per pound ($10,472 per tonne).


"Our revised commodity prices changes have resulted in 10-15 percent earnings reductions in the near term for the UK mining sector," the report said.


Traders will watch U.S. construction spending figures due out at 1400 GMT and the U.S. ISM Manufacturing August purchasing manager's index, also due at 1400 GMT, for more clues about the state of the global economy.


LME zinc fell $39, or 2.2 percent, to $1,736 after shedding 2.3 percent on Monday. It hit a low of $1,720 earlier in the day, its lowest price since Aug. 20.


Hurricane Gustav's softened blow on the Louisiana coast weighed on zinc prices. New Orleans houses about 61,000 tonnes, or 38 percent, of LME zinc, and traders had feared supplies would be cut off if there was flooding similar to that during Hurricane Katrina three years ago.


Citi forecast zinc prices to bottom at $70 a pound ($1,543 per tonne) in 2009.


Lead shed 4.5 percent, or $88, to $1,847.


LME nickel shed $50 to $19,150, after a 5 percent slump on Monday in the wake of a big delivery of metal. LME stocks stand at 48,474 tonnes, their highest level in about four months.