* Copper up with broader commodity recovery
* LME aluminium stocks climb to fresh record high
* Coming up: U.S. weekly jobless claims data Thursday
(Recasts, adds New York dateline/byline, updates with New York closing copper price and analyst comments)
By Chris Kelly and Pratima Desai
NEW YORK/LONDON, May 18 (Reuters) - Copper closed sharply higher on Wednesday, posting its biggest one-day advance in two months, as commodity markets stabilized from recent losses and presented investors with truer valuations.
Gains ran far and wide across the commodity complex, led by an almost 4-percent rally in U.S. crude oil prices, a two-week high in grain futures in Chicago, and a gold price back up near $1,500 an ounce.
The 19-commodity Reuters-Jefferies CRB index .CRB, a global benchmark for the asset class, was up about 2.2 percent in late New York trade, on track for its biggest one-day gain in two months.
"I think everyone has kind of sobered up from the last two weeks. Everything is still there on the inflation side of it, and on the fundamental side of it, these markets should never had gotten punished in the first place," said Sean McGillivray, vice president and head of asset allocation for Great Pacific Wealth Management in Oregon.
"People are easing back into the market. With the exception of silver, I think commodities are back into finding their true value."
London Metal Exchange (LME) benchmark copper CMCU3 shot up $262 to end at $9,061 a tonne in its biggest daily gain since March 17. Earlier, it touched $9,075 a tonne, its loftiest level since May 5.
Other base metals rose in tandem, with zinc CMZN3 and lead CMPB3 each up about 5 percent on the day, with the latter also touching its highest in two weeks.
In New York, the July COMEX contract HGN1 jumped 10.65 cents, or 2.7 percent, to settle at $4.1050 per lb, near the upper end of its $4.0230 to $4.1155 session range.
Last week, copper prices in London and New York crumbled to their lowest levels since last December, at $8,504 a tonne and $3.8535 per lb, respectively.
"Generally sentiment has improved ... and generally more stable equity markets, and the feeling maybe that what we went through in the last few weeks was simply overdone," Credit Agricole analyst Robin Bhar said.
A stronger dollar and renewed concerns about global economic growth from China's monetary tightening campaign, weak U.S. data, and Europe's ongoing debt crisis were behind crashing commodity prices in the first two weeks of May.
China is the world's largest consumer of industrial metals, accounting for nearly 40 percent of global demand estimated at around 21 million tonnes this year. The second largest consumer is the United States.
Weighing on copper are rising inventories, which in LME warehouses have surged about 35 percent to 467,800 tonnes since December 9. <0#LME-STOCKS>
"The base metals will continue to face headwinds from lacklustre demand in China and Japan, but a short-term rebound in prices seems likely in the weeks ahead," Standard Chartered said in a note.
"Aluminium is now struggling under the weight of heavy stock inflows to the LME, which is depressing prices."
LME stocks of aluminium rose 1,325 tonnes to hit a record high of 4.71 million tonnes.
Cash aluminium to the three-month contract MAL0-3 is now in an $11 a tonne contango, or discount, that could discourage deliveries to LME warehouses. [ID:nLDE74F0PY] [ID:nLDE74F0SB]
Aluminium CMAL3 closed at $2,556 a tonne from $2,501 at the close on Tuesday.
Aluminium prices are up more than 30 percent since last June, partly because of expectations of stronger demand and partly because of bank financing deals which have tied up about 70 percent of LME stocks. [ID:nLDE73C242]
Zinc closed up $97 at $2,188 a tonne and lead jumped $136 to end at $2,445 -- its highest since May 5.
The global lead market was in surplus by 24,000 tonnes in the first quarter, latest monthly bulletin from the International Lead and Zinc Study Group showed. Zinc was in surplus of 111,000 tonnes in the same period. [ID:nLDE74H0QL] [ID:nLDE74H0PI] Metal Prices at 1725 GMT COMEX copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Pct Move End 2010 Ytd Pct
move COMEX Cu 411.10 11.25 +2.81 444.70 -7.56 LME Alum 2556.00 55.00 +2.20 2470.00 3.48 LME Cu 9064.00 265.00 +3.01 9600.00 -5.58 LME Lead 2444.00 135.00 +5.85 2550.00 -4.16 LME Nickel 24650.00 500.00 +2.07 24750.00 -0.40 LME Tin 28350.00 350.00 +1.25 26900.00 5.39 LME Zinc 2188.00 97.00 +4.64 2454.00 -10.84 SHFE Alu 16580.00 -110.00 -0.66 16840.00 -1.54 SHFE Cu* 66680.00 340.00 +0.51 71850.00 -7.20 SHFE Zin 16880.00 30.00 +0.18 19475.00 -13.32 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Editing by Anthony Barker and Marguerita Choy)