The base metals were all bathing in blood on Friday. Copper had a stunningly dismal day, falling in the pre-dawn hours, then seeing every rally in the New York market squashed, and finally just coming off its intraday low late to finish at $2.1916/lb., down 27¾ cents.

Nickel sank from the pre-dawn hours to the second hour of NY trading, breaking below $5 at one point, before an anemic rally took it back to $5.174/lb., down 37¾ cents. Zinc was hammered into the NY morning, but then rallied almost back to break-even, closing at $0.6282/lb., down a penny and three-quarters. Aluminum lost its momentum sagging under the $1 mark to $0.9841/lb., down 4 cents, while lead got taken to the slaughterhouse, plunging 8 2/3 cents, to $0.6545/lb.

Copper took an 11% haircut, falling to its lowest level since January 2006, and putting the finishing touches on its worst week (-20%) since the beginning of record-keeping in 1988.

The metal has now lost nearly half of its value in just 5 months, since touching a record $4.2605 a pound on May 5.

Some analysts blame the slumping world stock markets.

“Commodities are following equities,” said John Meyer of Fairfax bank. “The problems in the Western world have now spread to Asia … the developing world will be less able to offset the recession in the West.”

But Michael K. Smith, president of T&K Futures & Options in Port St. Lucie, Florida, put it more starkly: “People are scared to death,” he said. “The fear of a global recession is really hitting copper. People are worried about demand destruction. There’s plenty more downside to go.”

How much downside?

Writing that, “We believe copper remains increasingly exposed in an environment of weakening growth and falling equity markets,” Deutsche Bank analysts took a guess, saying that the price could fall to as low as $3,900 a ton, almost 20% below yesterday’s LME close of $4,790.

Source: Base Metals Savaged