UPDATE 10-Base metals sink as demand woes outweigh rate cuts

* Copper crumbles to 20-month low

* Global central banks rate cuts fail to inspire bulls

* Fears of global recession grow
(Changes headline, recasts, adds byline and NEW YORK to dateline,
updates with New York closing copper prices, adds analyst
comments)

By Chris Kelly and Anna Stablum

NEW YORK/LONDON, Oct 8 (Reuters) - Industrial metals slumped
on Wednesday as global economic concerns continued to bite and
investors feared that coordinated rate cuts by global central
banks would fail to thaw frozen credit markets and avoid a global
recession.

In an attempt to stem the worst global financial crisis since
the 1930s, the U.S. Federal Reserve, European Central Bank, Bank
of England, Switzerland, Canada and Sweden all lowered official
rates by a half-percentage point. [ID:nL8116323]

The People's Bank of China, in what appeared to be the first
time it had coordinated with the Group of Seven advanced
industrial nations, also lowered its key rate, but by a more
modest amount. [ID:nPEK61552]

"The coordinated action is positive but it doesn't really
impact on the immediate demand outlook for base metals," said Leon
Westgate, analyst at Standard Bank. "After the initial euphoria
there is still concern about the global economic outlook and
demand for metals."

LME copper MCU3 -- often seen as a key gauge of real
economic activity -- fell 7.1 percent to the lowest level since
March 2006 at $5,227 a tonne in early trade. It closed down $385
at $5,240.

In New York, copper for December delivery HGZ8 plunged 17.95
cents, or 7 percent, to settle at $2.3550 a lb on the New York
Mercantile Exchange's COMEX division, its lowest level on a
closing basis since February 14, 2007.

Bill O'Neill, partner of LOGIC Advisors in Upper Saddle River,
New Jersey, believed confidence, or the lack thereof, was the real
key plaguing global markets.

"Until we get some change there, certainly the atmosphere for
gold will continue to be very positive and for copper and the base
metals will continue to be negative." O'Neill said.

The price of copper is down over 40 percent since touching a
record of $8,940 per tonne in July and $4.27 a lb in May of this
year.

"We're still looking at the prospects of global demand for
copper to be weak. The supply/demand equation into at least the
first half of 2009 sets up weakly for copper," O'Neill added.

Europe's top copper miner KGHM KGHM.WA expects 2009 to be
"much more difficult" than 2008, as lower copper demand may hit
its revenues, its chief executive said. [ID:nL85993]

The International Copper Study Group (ICSG) forecasts a copper
surplus of 100,000 tonnes in 2008. [ID:nL884848]

Anxiety about the health of the world economy grew overnight
after remarks by Federal Reserve Chairman Ben Bernanke
highlighting the fact that recent economic data and financial
developments showed the outlook for growth had worsened.

"The market is perceiving a global recession," analyst Robin
Bhar at Calyon said.

Aluminium MAL3 fell to a near three-year low of $2,230 a
tonne before recovering to $2,250, compared with $2,303 on
Tuesday.

Rio Tinto Ltd/Plc (RIO.L) (RIO.AX) said it restarted idled
production at its Tiwai Point aluminium smelter in New Zealand.
Output at the 350,000 tonnes a year plant was cut by 11 percent in
May to conserve electricity [ID:nL8140994].

Stocks of the metal in LME warehouses at more than 1.39
million are the highest since February 2004.

Aluminium producer Alcoa Inc (AA.N) said longer-term prospects
for pricing and global demand are good despite measures to rein in
capital expenses and review underperforming assets to combat
softer demand and tighter margins. [ID:nL8622472]

Tin MSN3 fell 8.6 percent to $14,800 in early trade, down
from $16,200 on Tuesday. It closed at $14,900.

Lead MPB3 closed at $1,575 from $1,630 after touching a
3-month low of $1,566, while zinc MZN3 declined to a three-year
low of $1,430 from $1,550.

Nickel MNI3 fell 8.6 percent to a 35-month low of $12,975 a
tonne. It closed at $13,200.

The global nickel market will be in a 110,000-tonne surplus in
2009, the International Nickel Study Group (INSG) said.
[ID:nL8683406]

Metal Prices at 1909 GMT
Metal Last Change Pct Move End 2007 Ytd Pct

move
LME Cu 5305.00 -320.00 -5.69 6670.00 -20.46
SHFE Cu* 45720.00 -2920.00 -6.00 56880.00 -19.62
LME Alum 2280.00 -23.00 -1.00 2403.00 -5.12
SHFE Alu* 14230.00 -240.00 -1.66 18180.00 -21.73
COMEX Cu** 235.65 -17.80 -7.00 303.05 -22.24
LME Zinc 1460.00 -90.00 -5.81 2370.00 -38.40
SHFE Zinc* 12730.00 -115.00 -0.90 18950.00 -32.82
LME Nick 13100.00 -1100.00 -7.75 26350.00 -50.28
LME Lead 1585.00 -45.00 -2.76 2550.00 -37.84
LME Tin 14800.00 -1400.00 -8.64 16400.00 -9.76
** 1st contract month for COMEX copper * 3rd contact month for
SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
(Additional reporting by Julie Crust in London and Nick Trevethan
in Singapore; Editing by Christian Wiessner)