Copper plunged the most in 14 years, part of a global decline in base metals, on concern that a slowing economy in China could erode demand that led to a 15-year high in prices last week.
The slump in metals also hammered stocks of many commodity companies.
Copper usage in China, the world's biggest buyer, fell 21% in July from a year earlier, leading a worldwide decline of 3.3%, the Lisbon-based International Copper Study Group said Tuesday. After the report, nickel prices in London dropped the most in 16 years, and aluminum, zinc, lead and tin tumbled.
"At some point, and who knows when, there's going to be a hiccup in China, and the huge consumption everybody's expecting for the next six months or a year is not going to be so huge," said Ron Fisher, a basic-materials analyst in New York at Stein Roe Investment Counsel.
Copper futures for December delivery fell 16 cents, or 11%, to $1.29 a pound in New York, the biggest drop since April 1990. The price still is up 23% this year.
Shares of Phelps Dodge, the world's largest publicly traded copper producer, tumbled $8.64, or 9.4%, to $83.10 on the New York Stock Exchange.
Other commodity-related stocks also sank. Many had been strong performers in recent months, and analysts said profit taking was overdue.
Potash slid $3.26 to $62.78, Alcoa dropped $1 to $32.19 and miner Rio Tinto fell $4.09 to $104.11. In the steel sector, Nucor sank $4.49 to $88.61 and U.S. Steel gave up $1.78 to $35.68.
Fred Sturm, lead manager of the Ivy Global Natural Resources Fund, said he wasn't surprised by the sharp drop in commodities considering the long run-up in prices.
"Commodity prices generally were due for a pullback into more sustainable ranges rather than what you would call perhaps excessive ranges," he said.
Analyst Charles Bradford of Bradford Securities/Soleil said that with aggressive construction continuing in China, the need for copper would remain strong in the longer run.