By Michael Taylor LONDON, Nov 5 (Reuters) - Copper shed nearly 9 percent to lead other industrial metals lower on Wednesday as inventories rose and a firmer dollar weighed after the U.S. election. The dollar erased some of its earlier gains but remained stronger after posting its biggest one-day slide in 13 years the previous day and as Democrat Barack Obama won the U.S. presidential election. Obama captured the White House on Tuesday, defeating Republican John McCain to make history as the first black U.S. president. [ID:nN04356344] "By and large it's going to be dollar driven," said Charles Cooper, mining analyst at Evolution Securities. "We're seeing the copper price and some of the other metal prices following that trend." Cooper said the U.S. election could off short-term relief to metals markets. However, he added: "We're facing a global recession that will effect demand for commodities and we feel that it will be exacerbated by companies reporting balance sheet write downs or negative inventory adjustments." In official trading rings, copper for three month delivery MCU3 on the London Metal Exchange fell to $4,090 a tonne from $4,350 at the close on Tuesday and compared with a session low of $3,970. Prices of the metal, used in power and construction, have fallen more than 50 percent since a record high of $8,940 in July. Poor demand for copper is mirrored by the continuous jumps in inventories. Stocks of the metal in LME registered warehouses jumped 5,825 tonnes on Wednesday, bringing the total to 247,475 tonnes. The stocks have risen more than 35,000 tonnes in the last two weeks alone. Adding to the gloom, investment bank UBS (UBSN.VX: Quote, Profile, Research, Stock Buzz) slashed its commodities outlook for the second time in just a few weeks, predicting a slowdown in global growth to 1.3 percent in 2009 from previous forecasts of 2.2, will eat deep into industrial raw material demand. [ID:nSP425778] "The collapse in copper prices since July has forced more than 40 percent of China's refined copper capacity to slow production, and may cost the market as much as 120,000 tonnes in lost metal in 2008," said Fox-Davies Capital in a note. "This is equivalent to 3 percent of China's total copper production or one month of refined imports." ALIMINIUM DRIFTS LOWER Aluminium MAL3 hit a low of $2,052 a tonne, and was last bid at $2,074.5 from $2,105/$2,110 on Tuesday. LME aluminium stocks fell 1,150 tonnes to about 1.5 million tonnes. "There is the dollar but also it's a technical reaction to yesterday's sharp rally," said Leon Westgate, an analyst at Standard Bank. "The market is still very focused on the short-term picture and the base metals are looking to the stock and currency markets for direction." Negative sentiment was not just limited to commodities, the FTSEurofirst 300 index of leading European shares was down about 1.7 percent at mid-session. Nickel MNI3 fell 5.6 percent to a low of $12,180, but traded at $12,250 from $12,900 at the close on Tuesday. Lead MPB3 was down $60 at $1,480, while zinc MZN3 shed 5.4 percent to a low of $1,172 but traded last at $1,161.5 from $1,239. Tin MSN3 fell to a low of $14,400 from $14,795 and was last bid at $14,650. "The mood was one of confidence yesterday," said Commerzbank in a note. "However, with the economic environment still highly fragile, the (previous) day's gains are unlikely to last long." On the macroeconomic front, the Bank of England's Monetary Policy Committee meets, with a rate verdict expected on Thursday. Economists polled by Reuters expect the bank to slash borrowing costs by 50 basis points to 4.0 percent. Metal Prices at 1319 GMT Metal Last Change Pct Move End 2007 Ytd Pct move LME Cu 4022.00 -328.00 -7.54 6670.00 -39.70 SHFE Cu* 32080.00 310.00 +0.98 56880.00 -43.60 LME Alum 2073.00 23.00 +1.12 2403.00 -13.73 SHFE Alu* 13755.00 -125.00 -0.90 18180.00 -24.34 COMEX Cu** 182.85 -12.25 -6.28 303.05 -39.66 LME Zinc 1175.00 -64.00 -5.17 2370.00 -50.42 SHFE Zinc* 9540.00 25.00 +0.26 18950.00 -49.66 LME Nick 12175.00 -725.00 -5.62 26350.00 -53.80 LME Lead 1484.00 -56.00 -3.64 2550.00 -41.80 LME Tin 14600.00 -195.00 -1.32 16400.00 -10.98 ** 1st contract month for COMEX copper * 3rd contact month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Reporting by Michael Taylor; editing by Editing by Peter Blackburn)

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