NEW YORK/LONDON, March 9 (Reuters) - Copper fell 3 percent on Wednesday on investor concerns that elevated crude oil prices could lead to inflation and crimp global growth, denting demand for industrial metals.
Brent oil prices LCOc1 jumped nearly 3 percent, weighing on global stocks and commodities, as escalating violence in Libya increased fears higher energy costs could choke the economic recovery. [MKTS/GLOB]
Copper for three-months delivery CMCU3 on the London Metal Exchange closed at $9,275 a tonne, down from a close of $9,530 a tonne on Tuesday.
"With U.S. copper significantly above $4 a lb, it questions that its recovery might be running its course with high oil. It's the perception that oil could slow down the world's recovery is causing the market to be on the defensive," said Adam Klopfenstein, senior market strategist of MF Global's Lind-Waldock.
In New York, COMEX May copper HGK1 lost 12.6 cents to settle at $4.2125 per lb, after dealing between $4.3790 and $4.1830 -- a 2-1/2 month low.
The May contract partially recovered losses after bouncing off technical support at its 100-day moving average.
Zinc CMZN3 and lead CMPB3 recorded heavier losses and hit lows at almost 7 percent and over 4 percent, respectively.
"Overall weakness is largely on the back of upward oil prices, which would feed through to higher interest rates and so industrial manufacturing activity, that's essentially what is weighing on the complex generally," David Wilson, director of metals research, Societe Generale said.
"But some are looking worse than others. Zinc has been looking awful for a while. It's quite a dramatically oversupplied market."
COPPER STOCKS FALL
Zinc fell almost 7 percent and touched a session low at $2,240.50 a tonne, the lowest level since January 2010.
It then closed at $2,275 a tonne, down from $2,590 at the close on Tuesday.
Battery material lead closed at $2,480 from a $2,590 close on Tuesday.
Earlier it touched a weekly low at $2,475.50.
"With lead, stock levels are still high, we've got close to 300,000 tonnes in the LME, and we're now essentially out of the peak demand period for lead, which is demand for winter lead acid battery replacement," Wilson said.
Copper stocks MCU-STOCKS in LME warehouses fell 775 tonnes to 425,725 tonnes, a small reprieve as gains in stocks since December have recently brought inventories to their highest levels since mid-2010.
Investors remained concerned about weakness in physical demand and about a dearth of buying interest from top copper consumer China.
Aluminium CMAL3 closed at $2,581 a tonne from $2,596.
Tin CMSN3 ended at $29,500 a tonne from $30,600 and nickel CMNI3 finished at $26,200 a tonne from $26,900.
Metal Prices at 2:11 p.m. EST (1911 GMT)
Metal Last Change Pct Move End 2010 Ytd Pct
COMEX Cu 420.85 -13.00 -3.00 444.70 -5.36
LME Alum 2578.00 -18.00 -0.69 2470.00 4.37
LME Cu 9270.00 -260.00 -2.73 9600.00 -3.44
LME Lead 2480.00 -110.00 -4.25 2550.00 -2.75
LME Nickel 26125.00 -775.00 -2.88 24750.00 5.56
LME Tin 29500.00 -1100.00 -3.59 26900.00 9.67
LME Zinc 2270.00 -125.00 -5.22 2454.00 -7.50
SHFE Alu 16825.00 130.00 +0.78 16840.00 -0.09
SHFE Cu* 71600.00 530.00 +0.75 71850.00 -0.35
SHFE Zin 18315.00 235.00 +1.30 19475.00 -5.96