Copper Drops to 30-Month Low in N.Y. on Global Growth Outlook

By Millie Munshi

Oct. 8 (Bloomberg) -- Copper dropped to the lowest price since March 2006 on concern that a coordinated reduction in interest rates in the U.S. and Europe won't be enough to restore investor confidence and revive economic growth.

The U.S. Federal Reserve, European Central Bank and four other central banks lowered borrowing costs in an unprecedented coordinated effort to ease the economic effects of the worst financial crisis since the Great Depression. U.S. stock futures fell after the announcement and the Reuters/Jefferies CRB Index of 19 commodities extended losses.

``The market is saying this action is not enough,'' said Frank McGhee, the head metals dealer at Integrated Brokerage Services LLC in Chicago. ``The best the central banks can do to turn the tide is turn confidence, and they haven't been able to do that. Copper will continue to get punished in view of the continued, deteriorating global economic outlook.''

Copper futures for December delivery dropped 14.15 cents, or 5.6 percent, to $2.393 a pound at 9:17 on the Comex division of the New York Mercantile Exchange. Earlier, the price touched $2.3475 a pound, the lowest for a most-active contract since March 23, 2006.

Before today, copper had tumbled 17 percent this year as tighter lending conditions stalled global growth and construction demand waned amid the U.S. housing slump.

On the London Metal Exchange, copper for delivery in three months lost $309.75, or 5.5 percent, to $5,320.50 a metric ton ($2.41 a pound).

To contact the reporter on this story: Millie Munshi in New York at mmunshi@bloomberg.net.