(Updates prices to mid-session, adds equity markets)
By Anna Stablum
LONDON, Nov 20 (Reuters) - Aluminium and copper touched more than 3-year lows on Thursday after hefty rises in warehouse stocks and zinc, tin and nickel fell around 5 percent as concerns about demand for industrial metals intensified.
"There are new lows for most of them," said Stephen Briggs, commodities analyst at RBS Global Banking & Markets.
"This is still the recession story -- the economic data is lousy, the equity markets are very weak, stocks are rising and the demand side is so bad that people are brushing off the positive influence of the mounting number of cutbacks." London Metal Exchange copper MCU3 for delivery in three months fell $115 to $3,475 a tonne by mid-session.
Metals prices fell further after the number of U.S. workers filing new claims for jobless benefits rose by a larger than expected 27,000 last week to their highest level in 16 years, Labor Department data showed. [ID:nN19353223]
Copper, used widely in power and construction, fell 4.2 percent to touch the lowest since July 2005 at $3,440.
European stocks also fell as fears of the impact of a recession hammered shares in banks and raw material producers, with mining firm Vedanta (VED.L: Quote, Profile, Research, Stock Buzz) down more than 7 percent.
By 1342 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was down 3.07 percent at 787.10 points, after having touched a 5-1/2-year low of 782.67 points.
LME copper stocks rose 1,575 tonnes to 281,625, the highest level since February 2004 and stocks are up 18 percent this month.
Three-month copper prices could average at $4,307 a tonne next year, a Reuters survey showed. [ID:nLJ638200]
Aluminium MAL3 fell $98, or 5.2 percent, to a low of $1,780 a tonne, its weakest level in three years, against Wednesday's $1,878.
LME stocks of aluminium, widely used in transport and packaging, rose 20,850 tonnes to more than 1.72 million -- the highest since December 1994. The majority of the latest inflow went into warehouses in South Korea and in the previous session, Detroit saw the largest inflow of stocks -- up 55,550 tonnes.
Aluminium prices have been undermined by the bleak outlook for car makers, which has threatened the survival of Detroit's Big Three -- General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz), Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz) and Chrysler LLC [CBS.UL].[ID:nN19320198]
Stocks are up 345,800 tonnes since end-September and dealers said stocks could hit 2 million before the end of December.
The transportation sector makes up between 10 percent to 25 percent of base metals demand, said analyst Michael Widmer at BNP Paribas in a research note. "We calculate that the slowdown of the U.S. automotive industry will reduce the country's copper and lead demand by 2 percent and 1.5 percent, respectively, this year," he said.
Battery material lead MPB3 slid 3.7 percent to a low of $1,185 a tonne, before trading at $1,195 from $1,230 Wednesday.
SLUGGISH OUTLOOK
Rising stocks sent tin MSN3 to an intraday low of $11,200 down 5.9 percent against Wednesday's close of $11,905. It was last at $11,300. Zinc MZN3 was also hit by a steady inflow of inventories with prices falling to a low of $1,132.50, down 4.3 percent.
It was last at $1,145 against Wednesday's $1,184.
Nickel MNI3 fell 5.3 percent to a low of $9,749 before trading at $9,850, down from $10,300 on Wednesday.
In the previous session, copper prices fell nearly 6 percent after construction starts on new U.S. homes fell to a record low in October, as did new applications for building permits, signalling that the housing downturn may extend well into the future. [ID:nN19323456]
Reflecting poor demand Chile's Codelco, the world's top copper producer, has offered term premiums for refined copper to China at $75 a tonne in 2009, down 32 percent from 2008. Codelco cut premiums to buyers in South Korea and Japan by between 35 and 36 percent. [ID:nHKG349982]
"The market is pricing in a much weaker demand environment and Codelco's cuts should come as no surprise, given current recessionary fears," said Yingxi Yu, analyst at Barclays Capital.
Metal Prices at 1345 GMT Metal Last Change Pct Move End 2007 Ytd Pct
move LME Cu 3450.00 -140.00 -3.90 6670.00 -48.28 SHFE Cu* 27690.00 -1360.00 -4.68 56880.00 -51.32 LME Alum 1785.00 -93.00 -4.95 2403.00 -25.72 SHFE Alu* 13415.00 -425.00 -3.07 18180.00 -26.21 COMEX Cu** 159.45 0.00 +0.00 303.05 -47.38 LME Zinc 1135.00 -49.00 -4.14 2370.00 -52.11 SHFE Zinc* 9345.00 -370.00 -3.81 18950.00 -50.69 LME Nick 9800.00 -500.00 -4.85 26350.00 -62.81 LME Lead 1185.00 -45.00 -3.66 2550.00 -53.53 LME Tin 11000.00 -905.00 -7.60 16400.00 -32.93 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Additional reporting by Nick Trevethan in Singapore, Editing by Karen Foster)
