The base metals mostly took another hosing on Monday. Copper held up until the late predawn hours, but tumbled from there straight through the day, finishing at its intraday low of $3.3553/lb., down more than 6¾ cents.

Nickel rallied to near $8.30 at mid-morning but headed south from there, giving up virtually all its gains and closing at $8.006/lb., up two-thirds of a cent. Zinc traded all over the place, but to little ultimate effect, ending at $0.7539/lb., down two-thirds of a cent. Aluminum also sagged after the late predawn hours, falling to just off its intraday low at $1.2594/lb., down a penny and a quarter, while lead sank to its intraday low of $0.8641/lb., down better than 3 cents.

Copper fell to a six-month low as investors factored in the staggering economy and rising dollar, and reacted to yet another increase in stocks.

“The correction that we are seeing is really a reflection of the slowdown of the global economy,” said Ashok Shah, chief investment officer at London & Capital.

Foreseeing further unwinding of long positions, Shah added that, “I would expect some more speculative money to be exiting.”

Meanwhile, inventories monitored by the LME advanced 750 metric tons yesterday, to 151,625 tons, marking their highest level since February 14. Stockpiles have now risen for five straight weeks, the longest unbroken string of increases since the January turnaround.

All told, there are “growing questions about end-user metal demand,” wrote Edward Meir, of MF Global (NYSE:MF). Copper “will remain under pressure over the short-term,” in Meir’s opinion.

And a Bloomberg survey of 50 economists netted a forecast that the U.S. will grow at an anemic average 0.7% annual pace from July through December of this year. If so, that would be only half the gain posted in the first six months of the year.

“If all these major economies are going to slow down, that’s really bad news,” said Michael K. Smith, president of T&K Futures & Options in Port St. Lucie, Florida.

Still, there are signs China may be tiptoeing back into the market. China’s imports of copper and copper products rose 7% in July compared with June, the customs office said. It was the first monthly gain since April.

“As underlying metals demand in China is still healthy … we believe this will give an incentive for Chinese buyers to gradually increase imports,” Lehman Brothers (NYSE:LEH) analysts wrote.

“(That) should then also better support copper prices on the LME in the medium term,” they added.

Source: Base Metals Largely Pummeled