The base metals were mostly deep in the red on Tuesday. Copper fell from the pre-dawn hours to the New York open, tried to rally, but gave it up to finish just off its intraday low at $2.0453/lb., down 11 1/3 cents. Nickel was down in the pre-dawn hours, shot much higher to the mid-morning point, but then tumbled back to break-even, closing at $4.6849/lb., up just over a penny.

Zinc declined steadily all day, barely coming off its intraday low to end at $0.502/lb., down 3¼ cents. Aluminum was off sharply, dropping nearly 3 cents, to $0.9116/lb., while lead was also hammered, shedding 3 cents to $0.6086/lb.

Copper led the industrial metals mostly lower, as fears about the Chinese economy remained in the forefront. The metal dipped briefly below the $2/lb. mark for the first time since December of 2005.

Edward Meir, of MF Global, stated flat out that copper’s slide is “attributable to the fact that the global slowdown is now spreading to China.”

The market was abuzz with the potential meaning of losing $2 as a floor.

“It’s very significant to see copper come under $2,” said Ron Goodis, of Equidex Brokerage Group Inc. in Closter, New Jersey. “People are wondering, ‘How did it fall so far so fast?’ It’s easy. With this economy, it doesn’t matter what the price is. People don’t want copper.”

Rob Kurzatkowski, a futures analyst with Chicago-based OptionsXpress, commented that, “It’s quite a move … It certainly seems as though copper traders are overwhelmed with pessimism at this point.”

But Kurzatkowski also noted that, “With manufacturing and the housing market both suffering during this economic downturn, the market’s coming back down to some more realistic levels.”

Also hurting are copper miners. Freeport McMoRan (FCX) announced that its third-quarter profit dropped 33% along with the price of the metal. Freeport CEO Richard Adkerson calls copper’s slump “striking” and “unusual,” and says his company will delay some projects planned to increase production, until market conditions improve.

Source: Most base metals slammed again -  Freeport profit takes a 33% haircut.