By Glenys Sim Nov. 21 (Bloomberg) -- Copper fell by the exchange-imposed daily limit in Shanghai and headed for the largest weekly decline in a month as a global recession erodes demand for raw materials. The metal in London fell to the lowest in more than three years. Crude oil plunged below $50 a barrel, sending the Reuters/Jefferies CRB Index of 19 raw materials down more than 50 percent from a record in July. Asian stocks dropped for a fifth day as Taiwan and Singapore forecast further contractions, and U.S. unemployment claims approached a 26-year high. ``The main thing weighing on investor sentiment and confidence is the continued slide in the global economy,'' Yang Hongjie, an analyst at Haitong Securities Co., said from Shanghai. Copper for February delivery on the Shanghai Futures Exchange fell by 1,410 yuan, or 5 percent, from the previous settlement price, to 26,640 yuan ($3,897) a metric ton, the lowest for a benchmark contract since October 2004. London Metal Exchange copper lost as much as 3.1 percent to $3,375 a ton at 11:21 a.m. Singapore time. March-delivery copper on the Comex division of the New York Mercantile Exchange slipped 3.4 percent to $1.5270 a pound. Inventories monitored by the London Metal Exchange climbed to 281,625 tons yesterday, the most since February 2004. The metal used in electrical wiring and pipes is down 11 percent this week as LME stockpiles have increased 2.7 percent. Supply Surplus ``In the short term, the big producers will reduce output and operate below the cost of production, while the smaller ones will get squeezed out of the market,'' said Yang. ``Copper may fall towards $2,500 as a global surplus grows, but production cuts will eventually bring the market back into equilibrium.'' World copper output outpaced demand by 125,000 tons in August, the International Copper Study Group said. In the eight months ended August 31, production exceeded consumption by 75,000 tons, the Lisbon-based group said late yesterday on their Web site. That compared with a surplus of 22,000 tons a year earlier. Among other LME-traded metals, aluminum was down 1.1 percent at $1,765.25 a ton, zinc was 4.2 percent lower at $1,130, lead fell 1.3 percent to $1,170, nickel lost 1.9 percent to $9,760, and tin slipped 2.2 percent to $11,050 as of 11:06 a.m. in Singapore. To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net

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