Zinc plummeted in the late morning and never found its way back, ending at $0.4885/lb., down nearly 2 cents. Aluminum had a very strong day, pushing to an intraday high of $0.9402/lb., up better than 4 cents, while lead raced to $0.6402/lb., up just over 7 cents.

Copper led most of the industrial metals higher yesterday as it followed equities markets up in anticipation of a rate cut by the Fed today.

“We’ve seen some signs of life coming back to the market with equities rebounding and commodities rising today across the board,” says Matt Zeman. “Copper could rally pretty hard for a few days if the equities hold up.”

Zeman added that he “wouldn’t be surprised to see it rally higher or for several days in a row, perhaps even testing that $2.00 level again,” but that’s it. “I’d expect it to roll back over from there.”

With copper down 35% in October, and headed for its worst month since trading began in New York in 1988, there is beginning to be some concern that supply will soon be affected.

“When prices fall below the cost of production, high-cost producers shutter projects” and trim expansion plans, said Catherine Virga, an analyst at CPM Group.

Aluminum got a boost for just that reason, as Aluminum Corp. of China (ACH), the world’s No.3 alumina maker, said it will cut capital spending by 20% in 2009.

And Rio Tinto (RTP) CEO Tom Albanese said his company is rethinking its capital investment projects “across the board” to see if it could cut costs or delay them.

Albanese also brushed off the notion that the stock market pummeling of resource companies might force it into the arms of rival BHP Billiton, whose hostile bid is now worth some $70 billion. Rio’s shares have lost 2/3 since May and are down 35% just in October.

Source: Base metals mostly higher -  Producers begin shuttering projects