Copper Plunges Below $4,000 for First Time Since November 2005

By Glenys Sim

Oct. 23 (Bloomberg) -- Copper tumbled below $4,000 a metric ton for the first time since November 2005 on concern a deepening global economic slump will damp demand for commodities.

Australian, New Zealand and Japanese shares dropped today on increasing signs the world's economy has tilted into a recession. BHP Billiton Ltd., the world's biggest mining company, lost 11 percent after metal prices plummeted.

``Copper won't be spared the onslaught on commodities as fundamentals ahead look bleak,'' Yu Mengguo, senior analyst at Jinpeng International Futures Co., said from Beijing today.

The metal for delivery in three months fell as much as 4.1 percent to $3,983 a ton, and traded at $3,995 a ton on the London Metal Exchange at 8:54 a.m. Singapore time. Copper is down 17 percent this week, and off 40 percent for the year.

Global production outpaced demand by 65,000 metric tons in July, the International Copper Study Group said Oct. 20.

``Across the board, every area you look at is weak, and copper is not going to be immune from that,'' said William O'Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey. ``It all relates back to the global credit crisis and the prospect of a global recession. I don't see any reason to come in and buy copper or any commodity now.''

BHP Billiton said yesterday that ``uncertainty'' about commodity demand in China will persist after its economy expanded at the slowest pace in five years in the past quarter. Freeport-McMoRan Copper & Gold Inc. said this week it will delay some expansion projects until market conditions improve.

To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net