Base metals plunge

Copper fell 3 percent on Wednesday as strengthening crude oil prices kept investors worried that inflationary pressures could hit economic growth and demand for industrial metals. Copper for three-months delivery on the London Metal Exchange closed at $9,275 a tonne, down from a close of $9,530 a tonne on Tuesday.
Zinc and lead 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.
Sentiment was fragile as oil prices resumed their rise on Wednesday as violence continued to threaten Libya's oil infrastructure. The rebel movement in eastern Libya said it did not see any issue in obtaining more arms as needed and said it had been promised help from Qatar and other countries. 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 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.
But copper remained within reach of all-time highs, after the metal used extensively in power and construction hit a record peak of $10,190 a tonne on February 15. Aluminium closed at $2,581 a tonne from $2,596. Tin ended at $29,500 a tonne from $30,600 and nickel finished at $26,200 a tonne from $26,900.