Copper fell in London for a third day, extending a plunge to the lowest in almost 34 months, pressured by gains in the dollar and concerns that a slowdown in China's economic expansion will reduce demand for base metals.
Asian stocks slumped, snapping a two-day rally, as investors' focus shifted from easing credit markets to weakening global economic growth and corporate profits. The dollar climbed to a 20-month high against the euro, making commodities more expensive for holders of other currencies.
''Hardly any one dares to predict the bottom for copper as fears are running rampant about the global economy,'' Li Rong, head of research at Great Wall Futures Co., said today by phone from Shanghai. ''''I wouldn't be surprised if it goes down to $3,000.''
Copper for three-month delivery fell as much as 3 percent to $4,365 a metric ton on the London Metal Exchange, the lowest intra-day level since January 2006. The contract, which traded at $4,392 a ton at 10:51 a.m. in Shanghai, has lost 35 percent this year.
The metal is heading for its biggest annual slide on record. In 1989, the year the data begins, the price fell 31 percent. The metal last had an annual decline in 2001, when the price fell 23 percent as a U.S. recession curbed manufacturing.
The euro fell against the dollar on speculation the European Central Bank will lower interest rates as global growth slows. The euro last traded at $1.2974 compared with $1.3063 in New York.
Shanghai Falls
Copper dropped by the daily limit in Shanghai, to the lowest since November 2005 and taking this year's loss to 39 percent. The metal fell by 1,900 yuan, or 5 percent, from the previous settlement price, to 36,070 yuan ($5,280) a ton.
''With downside risks still overwhelming and credit market volatile, we aren't expecting healthy Chinese imports even if arbitrage opportunities pop up now and again,'' Li said.
Shanghai Zinc for January delivery fell by 630 yuan, or 6 percent, from the previous settlement price, to 9,800 yuan a ton.
Among other LME-traded metals, aluminum fell 1.3 percent to $2,050 a ton, zinc dropped 0.3 percent to $1,130, lead slumped 1.5 percent to $1,350, nickel gained 1.4 percent to $10,850 and tin was 4.1 percent lower at $11,800.
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