Tin Slumps to Lowest in a Year; Nickel Plunges to 33-Month Low

By Glenys Sim

Oct. 8 (Bloomberg) -- Tin dropped to the lowest in over a year and nickel plummeted to a 33-month low on the London Metal Exchange as the credit crisis deepened, raising concerns that a slowdown in the global economy will curb demand for raw materials.

Copper plunged by the exchange-imposed daily limit for a third day in Shanghai as equities tumbled on concern more banks will topple as they run short of money. Japan's Nikkei 225 Stock Average dropped the most in over 20 years and Indonesia halted stock trading after the benchmark index slumped 10 percent.

``An economic slowdown will impact consumption for all metals,'' said Lin Yuhui, research manager at China International Futures Co. from Shenzhen today. ``People are just unwinding positions and exiting most markets.''

Tin, the best performer on the London Metal Exchange this year, dropped to a one-year low. The metal, used mainly in soldering, slumped 41 percent from a record $25,500 a metric ton reached May 15 and is down 8.1 percent this year.

Tin for delivery in three months fell 6.8 percent to $15,100 a ton at 2:19 p.m. Singapore time, the lowest since Sept. 19, 2007. Until the end of last week, tin was up for the year as stockpiles fell and China and Indonesia, the two biggest producers, curbed supplies.

Nickel, the worst exchange's worst performer this year, declined 2.8 percent to $13,801 a ton, the lowest since January 2006. The metal has fallen 47 percent this year as demand from the stainless steel industry, which accounts for two-thirds of total nickel use, weakened.

Copper Declines

Copper on the dropped as much as 4.4 percent to $5,380 a ton, the lowest intra-day level since Feb. 8, 2007. It traded at $5,420 at 2:32 p.m. Singapore time.

Copper for December delivery on the Shanghai Futures Exchange dropped by 2,920 yuan, or 6 percent, from the previous settlement price, to 45,720 yuan ($6,712) a metric ton when the exchange opened for trading at 9 a.m. local time.

``Heightened nervousness in global equity markets will put the base metals on the back foot,'' Mark Pervan, Australia & New Zealand Banking Group Ltd.'s head of commodity research wrote in an e-mail today.

A rising U.S. dollar will also discourage buying, Pervan said. The dollar index, a weighted measure against six major currencies including the euro, yen and pound, has risen 2.1 percent since the start of the month.

Among other LME-traded metals, aluminum slipped 1.8 percent to $2,251 a ton, zinc was down 0.3 percent at $1,545, and lead lost 2.6 percent to $1,588 as of 2:33 p.m. in Singapore.

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