SYDNEY (Dow Jones)--Base metals on the London Metal Exchange broke sharply lower Monday as Asian investors digested bad economic news out of Europe and the U.S. Friday.
Copper and zinc each shed around 3%, while lead was down more than 4% and nickel lost more than 2.5%.
The plunges follow on a collapse in base metals prices in European and North American trading hours Friday, when the LMEX base metals index lost 4%.
At 0230 GMT, copper was down $200 at $6,080 a metric ton, lead was $65 lower at $1,542/ton, zinc had lost $49.75 to $1,590.25, and nickel shed $370 to $17,580.
Copper and aluminum were at their lowest levels since last October, while zinc and lead prices were at their weakest since July and May, respectively.
Prices were also weighed by a weakening euro, which fell below $1.19 for the first time since March 2006 to hit $1.1877 at 0150 GMT before climbing to $1.1903 at 0230 GMT.
A strong dollar weakens the prices of dollar-denominated base metals, and the euro's weakness also highlighted the extent of fears for the world economy.
The switch in sentiment was so severe that a regular arbitrage window with the Shanghai Futures Exchange, which typically lifts LME metals the day after strong falls as traders buy London and sell Shanghai to profit from the low-risk spread, was slammed shut.
Shanghai fell so rapidly at its open that trading limits kicked in as copper and zinc dropped to the 5% lower limit.
Wilfred Cheung at Sucden in Hong Kong said that investors were liquidating long positions as metals dropped through technical supports.
Copper, nickel, and tin all fell below their 200-day moving averages late last week, joining the other three LME-traded metals.
Such a move below long-term trends indicates that the price of a commodity may be moving below previous expectations.
A trader in Singapore said that poorer-than-expected U.S. jobs data, which indicated that most jobs created in the country in May came from temporary government census work, and Hungary's warning that its fiscal situation resembled that of Greece, had spooked investors.
"A recovery is still under way but it's probably not as fast as what had been priced into the financial markets. Those expectations are being unwound as we speak."
"The Hungary news just reminded people that there's more than one cockroach in the kitchen when it comes to the euro zone," he said.
Copper could go below $6,000 "fairly quickly," after which the next price target would be $5,500, the trader said.