UPDATE 7-Copper drops to 33-month low as demand fears mount

 * Metals tumble on global recession fears after U.S. data

 * LME copper slides 7.6 pct to lowest since January 2006

 * RUSAL says many aluminium producers below break-even  (Updates prices to London close)

 By Julie Crust and Anna Stablum

 LONDON, Oct 16 (Reuters) - Copper dropped almost 8 percent to a 33-month low on Thursday on mounting fears of a global economic slowdown that looks set to hit demand.

 Zinc and lead fell more than 10 percent after economic data from the United States showed industrial production posting the biggest monthly decline since 1974. [ID:nN16468289]

 Copper MCU3 for delivery in three months on the London Metal Exchange fell as low as $4,545 a tonne, a drop of 7.6 percent, to the lowest price since January 2006. The metal, used in the construction and power industries, closed at $4,660 a tonne down 5.3 percent after closing at $4,920 on Wednesday.

 "All the data is pretty bearish. The industrial production was for September so you can expect that we are yet to see the big fallout from the last month in particular," said commodity strategist David Thurtell at investment bank Citi.

 "The Philly Fed data was shocking," he added.

 U.S. Mid-Atlantic regional factory activity crashed to an 18-year low in October, adding to the grim toll the last month of credit turmoil has taken on the economy. [ID:nN16387838]

 LME zinc MZN3 fell 11.8 percent to a low of $1,164 a tonne before closing at $1,180 down from $1,320 on Wednesday. Prices near or below the marginal costs of production have forced some miners to cut back output and delay future projects.

 "We are getting cutbacks in some of the metals and eventually supply will tighten up and prices should recover," Citi's Thurtell said.

 "Demand will also stabilise and then recover -- but when that is is the $64 question."

 Strategic Resource Acquisition Corp (SRZ.TO: Quote, Profile, Research, Stock Buzz) said the credit crisis and falling zinc prices forced the company to reduce its Gordonsville zinc mine operations. [ID:nN15534000]

 Lead MPB3 dropped 10.8 percent to a low of $1,351 a tonne before closing at $1,360, down from Wednesday's $1,515 on demand worries for metal used in batteries.

 North American shipments of replacement automotive lead-acid batteries fell 8.6 percent in August from July, a U.S. industry group said late on Wednesday. [ID:nN15343279]

 While, J.D. Power and Associates, which tallies U.S. auto sales on a daily basis, sees October sales on track to hit the lowest level in 17 years. [ID:nN15310875]

 Aluminium MAL3 ended at $2,180, after earlier falling as low as $2,115, from $2,170 a tonne on Wednesday. 

 Prices for the metal -- used in construction, transport and packaging -- have fallen more than a third since a record high of $3,380 a tonne in July.

 Alexander Bulygin, chief executive of the world's largest aluminium producer United Company RUSAL said Thursday that 75 percent of aluminium producers in Europe, the United States and China were operating at below break-even with the metal trading at or below $2,500 per tonne. [ID:nLG577245]

 Aluminium stocks in LME-warehouses rose 9,225 tonnes to 1.47 million tonnes, the highest level since at least March 1995.

 Nickel MNI3 dropped 8.4 percent or $1,005 to $10,950 per tonne, while tin MSN3 last traded at $13,400/13,500 from $14,050.

 China has slashed export quotas for tin for next year by 30 percent from 2008, a government web site said. [ID:nLG66536]

 Metal Prices at 1619 GMT    Metal            Last      Change  Pct Move   End 2007   Ytd Pct

                                                          move  LME Cu        4705.00     -215.00     -4.37    6670.00    -29.46  SHFE Cu*     39590.00    -1580.00     -3.84   56880.00    -30.40  LME Alum      2185.00       15.00     +0.69    2403.00     -9.07  SHFE Alu*    13600.00     -850.00     -5.88   18180.00    -25.19  COMEX Cu**     211.20      -11.15     -5.01     303.50    -30.41  LME Zinc      1200.00     -120.00     -9.09    2370.00    -49.37  SHFE Zinc*   11120.00     -455.00     -3.93   18950.00    -41.32  LME Nick     11050.00     -905.00     -7.57   26350.00    -58.06  LME Lead      1370.00     -145.00     -9.57    2550.00    -46.27  LME Tin      13625.00     -425.00     -3.02   16400.00    -16.92 ** 1st contract month for COMEX copper * 3rd contact month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07