SEPT 3 WEDNESDAY

Copper down on demand fears.

Copper prices in New York and London slipped and aluminum

hit a seven-month low on Tuesday as the dollar rallied, oil

prices tumbled and investors worried about demand for

industrial metals.

London Metal Exchange three-month copper -- often seen

as a key gauge of real economic activity -- closed at $7,270

a tonne, after shedding more than $200 on Monday.

In New York, copper for December delivery shed 11.40

cents to close at $3.2730 a lb on the New York Mercantile

Exchange's COMEX division, after sinking earlier to $3.1590 --

the contract's lowest price point since January 28.

U.S. crude oil futures settled down below $110 a barrel as

energy companies assessed damage and geared up to

restart energy infrastructure shut ahead of Hurricane
.
Gustav, and as a resurgent dollar contributed pressure.

LME copper stocks jumped 6,075 tonnes to their highest

since January, at 179,800 tonnes, up 64 percent since

the year low in May.

Rising stocks have pulled down the backwardation -- the

premium for cash material over three-months prices --

to $25 per tonne. On July 17, the premium hit the year's

high, at $241, with a dominant position capturing most

of the market.

A firm U.S. currency makes dollar-priced metals more

expensive for holders of other currencies.

The fall of crude oil sent the dollar index .DXY to

its highest level since late October.

Investment bank Citi revised its copper, aluminum and

zinc price forecasts downwards on the back of

expectations of continued slowdown in global

economic growth.