METALS-Copper ends at 2-1/2 mth low on recovery doubts

* Concerns remain over Chinese monetary tightening

* Copper at lowest since mid-November, lead falls 5 pct

* Copper stocks fall again, caps losses

(Changes headline, recasts with New York closing copper price,
adds New York dateline/byline and analyst comments)

By Chris Kelly and Michael Taylor

NEW YORK/LONDON, Feb 3 (Reuters) - Copper prices collapsed to
fresh 2-1/2-month lows on Wednesday, as extended gains in the U.S.
dollar and concerns over Chinese monetary tightening and European
credit problems reflected an uncertain outlook for the global
economic recovery.

Benchmark copper for March delivery HGH0 on the New York
Mercantile Exchange's COMEX division plunged 11.60 cents, or 3.75
percent, to finish at $2.9735 per lb, its lowest level on a
settlement basis since Nov. 12.

Over at the London Metal Exchange (LME), copper for three-month
delivery MCU3 closed down $230 at $6,590 a tonne, after dealing in
a wide range between $6,948 and $6,545, another low dating back to
the middle of November.

"It's primarily dollar-related," Michael Gross, futures analyst
with Optionsellers.com in Tampa, Florida, said of the sell-off.

"The sharp (dollar) upswing shows there are additional concerns
about credit problems overseas in Europe."

The dollar rose broadly after the European Commission backed a
Greek deficit-cutting plan as expected and worries mounted over the
fiscal health of Portugal. [USD/]

A firm U.S. currency makes metals priced in dollars more
expensive for holders of other currencies.

On the economic front, the pace of U.S. private sector job
losses slowed in January, while modest growth was seen in the U.S.
services sector. [ID:nN03150829]

This data followed more upbeat data that included Tuesday's home
sales numbers, Monday's manufacturing figures and economic growth
data on Friday. [ID:nN02203495] [ID:nN01363414] [ID:nN28120005]

"It's (economic data) been a see-saw ... fits and starts,"
Optionsellers.com's Gross said. "It's going to be more of a daily
thing, whereas copper is reacting now to more of the bigger
macroeconomic factors."

MONETARY POLICY

Copper was hit in late January by investors' fears that signs of
monetary tightening in China could choke demand from the world's top
consumer of industrial metals.

"China's macro environment has changed from one predominantly
focused on growth to one where balancing growth and inflation has
become increasingly important to policymakers," Barclays Capital
said in a note.

"Given China's importance to key commodity markets, these moves
have had a noticeable impact on sentiment."

LME copper stocks fell 675 tonnes to 540,475 tonnes. At the end
of last week, copper inventories rose to about 543,500 tonnes to hit
their highest level since last February.

Stocks of aluminum, used in transport and packaging, dropped
6,600 tonnes, but held near a record high above 4.6 million tonnes.

A large portion of those aluminum stocks are tied up in finance
deals, to release cash for producers and to earn banks higher
returns than they would get in money markets. [ID:nGEE5BA277]

Aluminum MAL3 ended at $2,083 from $2,120. Analysts said
improving U.S. auto sales was boosting sentiment. nCARS1

"Overall an annualized figure of 10.80 million units represents
a solid figure especially given the state of the economy," Standard
Bank said in a note.

"It will take time for sales to recover back to pre-crisis
levels, however the steady increase in sales is another positive
sign that should continue to underpin ... industrial metal prices."

Zinc MZN3 closed at $2,095 from $2,160, while battery material
lead MPB3 ended at $2,020 from $2,118 but earlier slipped 5
percent at $2,010.25 to track other metals lower.

Tin MSN3 closed at $16,600 from $16,450 and steel-making
component nickel MNI3 was last bid at $18,195 from $18,300.
Metal Prices at 1900 GMT
Metal Last Change Pct Move End 2009 Ytd Pct

move
COMEX Cu 298.35 -10.60 -3.43 334.65 -10.85
LME Alum 2083.00 -37.00 -1.75 2230.00 -6.59
LME Cu 6590.00 -230.00 -3.37 7375.00 -10.64
LME Lead 2048.00 -70.00 -3.31 2432.00 -15.79
LME Nickel 18200.00 -100.00 -0.55 18525.00 -1.75
LME Tin 16351.00 -99.00 -0.60 16950.00 -3.53
LME Zinc 2100.00 -45.00 -2.10 2560.00 -17.97
SHFE Alu 16560.00 345.00 +2.13 17160.00 -3.50
SHFE Cu* 55820.00 1540.00 +2.84 59900.00 -6.81
SHFE Zin 17985.00 830.00 +4.84 21195.00 -15.15
** 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 Rebekah Curtis in London; editing by
Keiron Henderson/Marguerita Choy)