* U.S. Fed signals end to stimulus measures by year-end
* Chinese factory data points to slowdown
* Nickel drops to 4-year low, aluminium at 3-1/2 year low
By Harpreet Bhal
LONDON, June 20 Copper fell to its lowest level
in 20 months, hit by further evidence that the economy of top
metals consumer China is slowing down and the U.S. Federal
Reserve's stated intention to begin scaling back stimulus
measures later this year.
Aluminium fell to its lowest level in more than
3-1/2 years, while nickel dropped to its lowest level in
four years. Tin fell to its lowest in 9-1/2 months.
Financial markets tumbled after Fed chairman Ben Bernanke
confirmed that U.S. economic growth was strong enough to begin
tapering its $85 billion in monthly asset purchases later this
Data showing China's factories showed activity slumped to a
nine-month low in June, heightening the risk of a sharper
second-quarter slowdown, powered metals' momentum lower.
Benchmark three-month copper on the London Metal Exchange
fell more than 2 percent to $6,750 a tonne, its lowest
level since October 2011. It closed at $6,770, down from a last
bid of $6,960 on Wednesday.
"At this point, it is difficult to get too excited about any
of the metals, as most seem to be clearly influenced by the
slowing growth trends in China, perhaps more so than anything
the Fed could throw at them," INTL FCStone analyst Ed Meir said.
China is the world's top consumer of copper, accounting for
around 40 percent of global refined demand.
"There is panic selling all over the commodities sector
after the Fed's comments and the data from China," said Daniel
Briesemann, analyst at Commerzbank.
"We are surprised to see such a strong reaction as the Fed
is only adhering to its long-known plan. We think the falls (in
markets) are overdone and I would expect to see a counter move
in the next few days."
Gold tumbled to its lowest level in more than 2-1/2 years,
while oil fell more than $2 a barrel.
The Fed's bond buying has largely supported commodity
prices by lowering the value of the U.S. dollar and making
assets priced in the greenback cheaper for holders of other
But following the latest Fed comments, the dollar has
firmed, putting pressure on metals prices.
Copper prices were also weighed down by the expectation of
further supply entering the market this year, particularly with
Rio Tinto's plans to start exporting copper from the Oyu
Tolgoi mine in Mongolia on Friday.
Inventories of copper in warehouses monitored by the LME
have been climbing in recent weeks to touch a 10-year high,
contributing to the metal's 14 percent fall this year.
LME aluminium closed at $1,797 a tonne, from $1,830
on Wednesday, having earlier fallen to its lowest since early
October 2009 at $1,789.50.
Nickel closed at $13,700 from $14,200, tin
at $19,500 a tonne from a close of $20,100, zinc at
$1,829.50 from $1,861, and lead at $2,018 from $2,066.
"Price levels are now certainly low enough to prompt more
cutbacks on the supply side of the equation, particularly in
aluminium, nickel and zinc, the three metals we think are
saddled with the most excess," INTL FCStone's Meir said in a