UPDATE 9-Copper pares losses after central banks cut rates

* Copper comes off 20-month low as central banks cut rates

* Earlier, metals fell more than 3 percent across the board

* Fears of global recession grow

(Adds closing prices)

By Anna Stablum

LONDON, Oct 8 (Reuters) - Copper trimmed losses as central
banks cut interest rates worldwide on Wednesday after the metal
had fallen more than 7 percent on fears over the health of the
global economy.

Other base metals recovered from early sharp losses after
co-ordinated action by the world's biggest central banks to cut
interest rates. However, prices then fell back from intra-day
highs on demand concerns. [ID:nHKG77476]

"The co-ordinated 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."

The U.S. Federal Open Market Committee, the policy-setting
arm of the U.S. Federal Reserve, cut benchmark lending rates by
half a percentage point to 1.5 percent in an action coordinated
with other central banks. [ID:nNAT004445]

Top copper consumer China also cut rates and lowered banks'
required reserves as part of a coordinated drive to halt a
free-fall in world financial markets. [ID:nPEK61552]

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.

But after the move by central banks, the metal, mainly used
in the construction and power industries, narrowed losses to
close at $5,240, down from $5,625 on Tuesday.

Prices of metal for delivery in three months have fallen by
15 percent since the start of October and are down 40 percent
since touching a record of $8,940 per tonne in July this year.

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 tonnes surplus
in 2009, the International Nickel Study Group (INSG) said.
[ID:nL8683406]

Metal Prices at 1614 GMT
Metal Last Change Pct Move End 2007 Ytd Pct

move
LME Cu 5220.00 -405.00 -7.20 6670.00 -21.74
SHFE Cu* 45720.00 -2920.00 -6.00 56880.00 -19.62
LME Alum 2251.00 -52.00 -2.26 2403.00 -6.33
SHFE Alu* 14230.00 -240.00 -1.66 18180.00 -21.73
COMEX Cu** 238.00 -16.45 -6.46 303.50 -21.58
LME Zinc 1432.00 -118.00 -7.61 2370.00 -39.58
SHFE Zinc* 12730.00 -115.00 -0.90 18950.00 -32.82
LME Nick 12900.00 -1300.00 -9.15 26350.00 -51.04
LME Lead 1572.00 -58.00 -3.56 2550.00 -38.35
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 Christopher Johnson)