METALS-Copper slides to over three-month low as Middle East war escalates

March 23 (Reuters) - Copper slid to over three-month lows on Monday, with a fresh escalation in the Middle East war keeping oil prices high after the U.S. and Iran traded threats.

The most-active copper contract SCFcv1 on the Shanghai Futures Exchange closed down 2.44% at 92,100 yuan ($13,333.33) a metric ton, after sliding 3.07% to 91,500 yuan, the lowest since December 5.

The benchmark three-month copper CMCU3 on the London Metal Exchange shed 1.57% to $11,742 a ton, as of 0700 GMT, following a 1.92% drop that sent it to the lowest since December 19 at $11,700.50.

Iran threatened on Sunday that it would strike the energy and water systems of its neighbours in the Gulf region to retaliate, after U.S. President Donald Trump warned to hit Iran's electricity grid if it doesn't open the Strait of Hormuz in 48 hours, a fresh escalation of the war now in its fourth week.

The Brent futures LCOc1 nudged higher, holding above $110 a barrel.

Higher energy costs hurt global growth outlook as they push up costs for households and businesses, fan inflation fears and dim prospects for interest rate cuts by central banks. Some investors are now pricing in that the U.S. Federal Reserve will hike rate this year.

Copper's loss came along with other assets including gold =XAU, which slid to its weakest level this year on Monday.

However, in China, the biggest consumer of the red metal, demand is showing signs of recovery as copper prices retreat from December highs.

Copper stocks sitting in warehouses registered with SHFE CU-STX-SGH saw their first decline since December 12, according to inventory data published on Friday, down 5.15% week-on-week to 411,121 tons.

Downstream orders have been picking up, with buyers becoming more active as prices fall, analysts at Chinese broker Jinrui Futures said. They noted that domestic inventories have started to decline, and the recent price drop is likely to speed up destocking.

Elsewhere on SHFE, aluminium SAFcv1 fell 1.38%, zinc SZNcv1 dipped 0.07%, nickel SNIcv1 nudged 0.09% lower, tin SSNcv1 plunged 4.37%, and lead SPBcv1 ticked 0.15% higher.

Among other metals on the LME, aluminium CMAL3 dropped 1.15%, zinc CMZN3 shed 0.55%, lead CMPB3 dipped 0.63%, nickel CMNI3 declined 1.23% and tin CMSN3 lost 4.33%.

($1 = 6.9075 Chinese yuan renminbi)