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RTRS: UPDATE 6-Copper narrows losses after central banks cut rates
 
* Copper narrows losses as central banks cut rates
* Earlier, metals fell more than 3 percent across the board
* Fears of global recession grow

(Recasts, updates prices, adds comments)
By Anna Stablum
LONDON, Oct 8 (Reuters) - Copper trimmed losses as central
banks cut interest rates worldwide on Wednesday after the metal
had fallen more than 7 percent on fears over the health of the
global economy.
Other base metals recovered from earlier sharp losses after
the coordinated action by the central banks. [ID:nHKG77476]
"The move that you have seen in metals is exactly what we
can expect because everything has gone up," said analyst Gayle
Berry at Barclays Capital.
The U.S. Federal Open Market Committee, the policy-setting
arm of the U.S. Federal Reserve, cut benchmark lending rates by
half a percentage point to 1.5 percent in an action coordinated
with other central banks. [ID:nNAT004445]
"What you are seeing now is a bounce on the news but even if
metals sustain the gains through the end of the day it is not
really something that is going to mark a turnaround in the
direction for prices," Berry said.
LME copper MCU3 -- often seen as a key gauge of real
economic activity -- fell 7.1 percent to the lowest level since
March 2006 at $5,227 a tonne in early trade.
But after the move by central banks at 1110 GMT the metal,
mainly used in the construction and power industries, had
narrowed losses to $5,370/5,390, down from $5,625 on Tuesday.
"It's too early to say what will happen next but it's a step
in the right direction," said Dan Smith, analyst at Standard
Chartered. "The move will help to underpin commodity prices."
Prices of metal for delivery in three months have fallen by
15 percent since the start of October and are down 40 percent
since touching a record of $8,940 per tonne in July this year.
Europe's top copper miner KGHM KGHM.WA expects its third
quarter revenue to be down from a year-ago period and may cut
its 2008 forecasts as demand for some copper products
worsenened, its deputy chief said.[ID:nWAR007407]
The International Copper Study Group (ICSG) said it
anticipates a copper surplus of 100,000 tonnes in 2008.
[nL884848]
Anxiety about the health of the world economy grew overnight
after remarks by Federal Reserve Chairman Ben Bernanke
highlighting the fact that recent economic data and financial
developments showed the outlook for growth had worsened.
"The market is perceiving a global recession," analyst Robin
Bhar at Calyon said.
Aluminium MAL3 fell to a near three-year low of $2,230 a
tonne before recovering to $2,310/2,315, up $7.
Stocks of the metal in LME warehouses at more than 1.39
million are the highest since February 2004.
Aluminium producer Alcoa Inc (AA.N: Quote, Profile, Research, Stock Buzz) said longer-term
prospects for pricing and global demand are good despite
measures to rein in capital expenses and review underperforming
assets to combat softer demand and tighter
margins.[ID:nL8622472]
Tin MSN3 fell 7.4 percent to $15,000 in early trade, down
from $16,200 on Tuesday. It was last at $15,300/15,500.
Lead MPB3 was at $1,612/1,622, down $18 after touching a
3-months low of $1,570 and zinc MZN3 shed $30 to $1,520/1,535
after hitting a three-year low of $1,470.
Nickel MNI3 fell to a 35-months low at $13,200 a tonne,
down $1,000 or 7 percent. It was last at $13,500.
The global nickel market will be in a 110,000 tonnes surplus
in 2009, the International Nickel Study Group (INSG) said.
[ID:nL8683406]
Metal Prices at 1118 GMT
Metal Last Change Pct Move End 2007 Ytd Pct
move
LME Cu 5425.00 -200.00 -3.56 6670.00 -18.67
SHFE Cu* 45720.00 -2920.00 -6.00 56880.00 -19.62
LME Alum 2310.00 7.00 +0.30 2403.00 -3.87
SHFE Alu* 14230.00 -240.00 -1.66 18180.00 -21.73
COMEX Cu** 254.45 0.00 +0.00 303.50 -16.16
LME Zinc 1520.00 -30.00 -1.94 2370.00 -35.86
SHFE Zinc* 12730.00 -115.00 -0.90 18950.00 -32.82
LME Nick 13500.00 -700.00 -4.93 26350.00 -48.77
LME Lead 1612.00 -18.00 -1.10 2550.00 -36.78
LME Tin 15325.00 -875.00 -5.40 16400.00 -6.55
** 1st contract month for COMEX copper
* 3rd contact month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
(Additional reporting by Julie Crust in London and Nick
Trevethan in Singapore, editing by Peter Blackburn)
Source