Iron ore fell to its lowest level of the year and copper plunged more than 6 per cent as Chinese investors led a wave of selling across industrial commodities markets amid concerns of a global economic slowdown.

The sharp falls came as the eurozone debt crisis entered a crucial week of negotiations. At the same time, however, investors are concerned by the possibility of a hard landing in China, which accounts for more than 40 per cent of demand for many industrial metals.

Those fears have been exacerbated by the sharp drop in spot iron ore prices. Benchmark Australian iron ore ' with a 62 per cent iron content ' delivered to China, which had been relatively stable amid the commodities sell-off over the past few months, fell to $145 a tonne, down 20 per cent from an early September peak of $183.

Duncan Hobbs, analyst at Macquarie, said the fall in the iron ore spot price was "reinforcing perceptions of a slowdown of the Chinese economy" and was affecting sentiment of other industrial metals in spite of bullish supply and demand fundamentals, especially in copper. China this week reported GDP growth of 9.1 per cent in the third quarter ' the lowest in two years.

Analysts said large steel mills in China were reporting declining orders and that aggregate steel output should probably be reduced in the short term.

Negative sentiment in China also weighed on industrial metals. Copper for delivery in three months at the London Metal Exchange, the bellwether of the base metals markets, fell as much as 6.5 per cent to a low of $6,710 a tonne. That was slightly more than a 14-month low of $6,635 touched this month, and the lowest close since July last year.

Prices of copper and steel on the Shanghai Futures Exchange ' seen as the clearest indicator of sentiment in China ' have fallen even more sharply than global market prices in recent days. SHFE rebar ' a form of steel bar used in construction ' for delivery in three months has tumbled 20 per cent since September's start, and on Thursday fell to within reach of a two-year low.

Nicholas Snowdon, base metals analyst at Barclays Capital in New York, noted that Chinese companies and investors, who were ready buyers of metals only a few weeks ago, had turned sellers: "There has been growing pessimism over the possibility of a hard landing in China. It's clear there have been some production cuts in the Chinese steel sector. It's something a lot of hedge funds have pointed to as a sign of weakness in China."

Marius Kloppers, chief executive of BHP Billiton, the world's largest mining company, told investors that the group had seen customers "behave conservatively in the light of global uncertainty". He added that companies were keeping a close watch on inventory levels, in light of "the potential need to tailor their plans if the global economic uncertainty continues".