Investment bank Macquarie said on Monday it had cut its 2009 forecasts for base metals, coal and iron ore by up to 60 percent to reflect the deteriorating global economic outlook.

It joins a growing number of research houses that have lowered their outlook for the commodities sector, which had enjoyed a strong performance until the first half of this year before sharply correcting in recent months as the credit crisis has threatened to reduce demand for oil, metals, coal, iron ore and grains.

"We had delayed the issuing of new forecasts for around a month so that we could better assess the changing dynamics of global growth and the prospects for recovery. We are more pessimistic than we were a month ago and so are the numbers," Macquarie said in a report.

It lowered 2009 contract prices of Australian iron ore fines by 20 percent to $115.7 a tonne, which would mark a first annual decline in seven years as steel makers reduce production amid growing fears over a looming global economic recession.

"The drastic decline in ocean freight rates has already pushed delivered prices (of Austrailian iron ore) to well below Chinese domestic iron ore costs, causing 2008 Chinese production to fall," it said in a report.

The research house also cut price estimates for copper and zinc by 43 percent and 40 percent, respectively, to 170 U.S. cents a lb and 51.3 cents per lb.

For the coal sector, the thermal coal price forecast was lowered by 38 percent to $105.0 a tonne free on board and the hard coking coal estimate was slashed by 60 percent to $140.0 to consider drastic output reduction plans by global steel giants such as ArcelorMittal and Corus. – Interactive Investor