Copper prices slipped over 2 percent on Wednesday as stock rises and worries about global economic slowdown and falling demand weighed on sentiment.
Lead was pushed down 6.7 percent at one stage to an intraday low of $3,500 per tonne on long liquidation and Commodity Trading Advisor (CTA) selling, traders said. Lead ended at $3,590, down from $3,750 on Tuesday..
Rising stocks of lead, at more than 40,000 tonnes, nearly double the levels seen in October have persuaded some investors to take profits. However, in early trade other metals were firmer before gradually losing ground. Aluminium hit a three-month high and tin hit an all-time high before retreating.
Mining shares in London also recoiled later in the session after talk that diversified miner BHP Billiton could make a bid for rival Rio Tinto fuelling prices higher.
BHP Billiton fell over 1 percent, while Rio Tinto closed up 0.28 and the FTSE 100 index ended up 0.58 percent. Three-months copper on the London Metal Exchange closed at $7,315, down 2.2 percent, from $7,480 on Tuesday.
Earlier it hit $7,303 - the lowest since September 11. "The physical copper market in Europe doesn't look strong and inventories are rising," said Kevin Norrish, analyst at Barclays Capital. "You can layer into that concerns about contagion from financial markets and housing market weakness."
Financial markets in recent months have been crippled by the freeze in credit markets and the slump in the US housing market has raised concerns about demand for the metal widely used in the construction industry.
Copper stocks in LME warehouses at nearly 170,000 tonnes -highest since April- are up 30 percent since early October. Traders said short positions - bets on lower prices - covering a strike in Peru would support copper. Aluminium touched $2,661 a tonne, the highest since August 9 and ended at $2,623 a tonne compared with $2,645.
"With gold and oil strong and the US dollar weak, we would not be surprised to see base metals rally further on short covering," UBS said in a research note.
The dollar's fall to reclosing in on the $100-a-barrel level. Aluminium used in the automotive and construction industries has been boosted by falling stocks in recent weeks.
Traders said the options expiry passed without any fireworks, although they did report some selling of aluminium to keep prices below the $2,700 to prevent the exercise of call options - contracts to buy three-month aluminium at $2,700.
Tin hit a new record high of $17,225 as speculators bet on tighter supplies from Indonesia, the world's second biggest producer. It was at $16,925/16,950 from $17,050.
The metal has gained more than 25 percent since the middle of August when supply worries emerged. "The funds drove it up a said it plans to introduce a tin output quota of 90,000 to 100,000 tonnes for 2008. Zinc touched $2,870, the highest since October 30 on short covering. The metal has come under pressure from expectations of a supply surge over the coming year.