METALS-London copper heads for steepest weekly loss in a year on fears of oil-fuelled inflation

(Updates prices by Asian market close)

March 20 (Reuters) - Copper was set to log its steepest weekly loss in nearly a year on Friday, as the Middle East war stoked fears of higher inflation and slower global growth amid surging oil prices. The benchmark three-month copper on the London Metal Exchange was up 0.09% at $12,157 a metric ton as of 0700 GMT but was headed for a near 5% weekly loss, the biggest since April 2025.

The most active copper contract on the Shanghai Futures Exchange ended daytime trading 1.12% lower at 94,780 yuan ($13,751.18), down 6.05% for the week. Multiple central banks held rates this week and warned that the jump in oil prices could rekindle inflation and weigh on growth, prompting investors to push back rate cut bets and, in some cases, revive expectations of renewed tightening. Brent futures eased on Friday but were still above $105 a barrel, rising more than 49% since the war started on February 28. The conflict is fuelling recession fears, leading to copper's break below a key support level, Chinese broker Galaxy Futures said. Aluminium also felt the pinch, with the Gulf accounting for 8% of the world's output.

Shanghai's most-active aluminium contract declined 1.6% to 24,020 yuan a ton, and is set to end the week 5.59% lower.

London benchmark aluminium was up 0.14% at $3,256 a ton on Fridaybut is set to lose 5% this week.

Aluminium Bahrain said on Thursday that it is exporting metal via the Saudi port of Jeddah as the Strait of Hormuz remains effectively shut.

Elsewhere on SHFE, zinc nudged 0.02% higher, lead dropped 1.60%, nickel gained 0.28% and tin lost 3.25%.

Among other LME metals, zinc gained 0.14%, lead dropped 0.32%, nickel shed 0.32% and tin declined 1.19%. ($1 = 6.8925 Chinese yuan renminbi) (Reporting by Lewis Jackson and Dylan Duan; Editing by Harikrishnan Nair and Sonia Cheema)