Feb. 23 (Dow Jones)--Copper closed lower for the seventh consecutive day on the London Metal Exchange Wednesday, its near-term prospects rattled by fears that rising oil prices may undermine the global economic recovery, market players said.
At the PM kerb close, LME three-month copper was down 1.6% at $9,425 a metric ton, after hitting a four-week low of $9,375/ton in earlier trade.
While the red metal traded in a tighter range than the previous day--which saw copper drop 2.3% in one session--there is still "plenty of room" for a further correction, said a London trader, though small pockets of dip buying along the way may keep its decline staggered.
The driving force behind copper's slide in recent days has been the escalation of unrest in Libya, where protesters and pro-government forces have clashed amid an uprising against the country's embattled leader, Moammar Gadhafi.
The disruption the conflict has caused to oil exports from the region has sent oil prices soaring, prompting concern that resultant rising inflation rates could undermine the global economic recovery. With the markets playing close attention to the news flow surrounding the crisis, trading has been particularly volatile, analysts said.
"For the first time since mid-November 2010, when concerns escalated over the euro-zone debt crisis, macroeconomic expectations have assumed a central role in the price setting mechanism," said Barclays Capital in a note, adding that until there is great clarity over the potential spread of unrest in the region and the economic impact of contagion, "such uncertainties are likely to remain central to base metals price performance."
Though copper lost the most ground of the base metals Wednesday, the rest of the complex tracked its moves throughout the day, though zinc, aluminum, nickel and aluminum allow closed in positive territory. Prices in dollar a metric ton.
3 Months Metal Bid-Ask Change from
Tuesday PM kerb
Copper 9425.0-9426.0 Dn 155
Lead 2538.5-2539.0 Dn 26.5
Zinc 2494.0-2495.0 Up 9
Aluminum 2530.0-2531.0 Up 2.5
Nickel 28680.0-28685.0 Up 30
Tin 31500.0-31525.0 Dn 100
Aluminum Alloy 2350.0-2360.0 Up 40
Aluminum Alloy-NASAAC 2510.0-2530.0 Dn 19