Industrial metal prices slid on Wednesday in a sell-off triggered by a German ban on risky bets in bond, stock and credit markets and initial dollar strength against the euro.
Steel ingredient zinc fell nearly 6 percent to a nine-month low of $1 823.75 a tonne and nickel also ceded about 6 percent to $20 781 a tonne.
Battery material lead fell more than 6 percent to $1 721.25 a tonne, its lowest since last July.
Benchmark copper on the London Metal Exchange hit a low of $6 460 a tonne. The metal, used in power and construction, traded at $6 502 a tonne in official rings compared with $6 700 a tonne at the close on Tuesday.
Germany has banned some types of short selling -- bets on lower prices -- to fight speculation, which it blames for much of Europe's debt crisis. Analysts said, however, the move could backfire by draining funds out of the euro zone.
"Today the price action has been on the back of news out of Europe, regarding regulatory issues. That has clearly had an impact on risk appetite," said Daniel Major, analyst at RBS Global Banking & Markets.
"It raises questions about the sustainability of the European project ... From the metals perspective I would say there is more downside to come."
The German decision also hit the euro, which fell to 4-year lows against the dollar, making commodities priced in dollars more expensive for holders of other currencies.
APPREHENSION
Government debt problems in the euro zone and fears of sovereign default in countries such as Greece, Portugal and Spain have prompted an investor retreat from risky assets such as commodities.
Investors are worried financial market turmoil will eventually translate into weaker economic growth and demand.
Copper is down nearly 20 percent since hitting a year high above $8,000 a tonne in the middle of April.
"Investors are not really looking at the fundamentals, if they do, they only see the negatives like China policy tightening," a metals trader said.
Economic improvement in the United States, the world's largest economy, has been noted, but most are focussing on China, which has driven most of the demand growth in industrial metals in recent years and is world's largest consumer of copper.
Expectations of further policy tightening in China have weighed on prices over the past few weeks
"Apprehension over a slowdown of Chinese metals demand has been exacerbated by concerns over Southern European sovereign debt," BofA Merrill Lynch said in a note.
"Acknowledging that the uncertainty in Greece poses risks to the economy, policy makers have swung into action."
A $1 trillion rescue package announced earlier this month did initially reassure markets, but that gave way to uncertainty because of a lack of detail.
"We remain cautious on base metals considering the uncertainty over China and Europe ... prices could fall further from here," BofA Merrill Lynch said.
Aluminium traded at $1 998 a tonne from $2 052 on Tuesday, zinc at $1 856 from $1 939, lead at $1 760 from $1 835, tin was bid at $17 150 from $17 500 and nickel was bid at $21 125 from $22 145 a tonne. - Reuters