The base metals were mostly lower on Tuesday. Copper held up until mid-morning when it hit a steep downdraft, from which it was able to recover only to $3.8033/lb., down nearly 4 cents. Nickel was down in the pre-dawn hours, but rallied into positive territory, then traded sideways to close at $9.3742/lb., up 3¼ cents.

Zinc slumped badly from the pre-dawn hours straight through, just coming off its intraday lows to end at $0.8345/lb., down 6 2/3 cents. Aluminum also hit the skids day-long, finishing at $1.4362/lb., down 4½ cents, while lead took a very jagged path back to its starting point, at $0.8946/lb., unchanged.

Copper’s loss was its biggest in a week, as traders gave in to negative thoughts that a global economic slowdown will reduce demand.

“The atmosphere of gloom and doom about the economy is severe,” said William O’Neill, of Logic Advisors in Upper Saddle River, New Jersey. “We’re seeing an economic malaise that’s not bullish for long-term copper demand.”

Bernanke didn’t help generate any enthusiasm when he told Congress that a weakening housing market, tighter credit conditions and rising oil prices threaten the economy.

And, “There’s no evidence that we can expect a turnaround in the economy anytime soon,” O’Neill added. The problem is that, “It’s not just the U.S., it’s global. The pervading factor here is that there is virtually no confidence that there is going to be any imminent change.”

On the supply side, inventories monitored by the LME rose 325 metric tons, to 125,050 tons on Tuesday.

Copper will continue to fall given that global weakness, Standard Chartered prognosticators wrote yesterday. Usage in China, for example, which rose 17% last year from 2006, will slow to an increase of 8% this year, in their opinion.

And Platt’s chipped in, saying that, “The demand side does not look like it is getting better. In the absence of any fresh labor problems or production problems, the market could be prone to working itself down toward the $3.60 area.”

Despite all the dark talk, though, the fact is that copper remains within spitting distance of its alltime high.

Source: Base Metals Little Changed, Growth Issues Keep Lid On