Most base metals in London extended declines on Monday, with copper hitting its lowest level in over 16 months on fears about reduced demand and higher chances of recession following trade tensions between the United States and China.
The benchmark three-month copper on the London Metal Exchange (LME) fell 1% to $8,690 per metric ton by 1217 GMT, after falling to $8,105 earlier in the session - its lowest since November 2023.
"LME is pricing in quite a great deal of bad news on the economic front ... Some buyers have started to emerge ahead of the key levels, so it looks like there is a bit of a technical flow under the market," said Ole Hansen, head of commodity strategy at Saxo Bank.
Economic tensions persisted after President Trump told reporters over the weekend that investors would have to take their "medicine" and that he would not make a deal with China until the U.S. trade deficit was resolved.
On Friday, top metals consumer China retaliated with a slew of counter-measures, including extra levies of 34% on all U.S. goods and export curbs on some rare earth metals.
"We think that base metals have likely put in their 2025 highs as they seem to be adversely caught up in the U.S.-China crossfire," said Marex consultant Edward Meir.
In "our base case, we see metals demand weakening further and in effect, offsetting supply shortages."
Among other metals, LME aluminium steadied at $2,379.5 a ton, lead dipped 1.4% to $1,878.5, zinc dropped 2.7% to $2,586, tin was down 3.9% at $33,815 and nickel slipped 2.4% to $14,395 a ton.
Citi lowered its 0-3 month copper and aluminium price forecasts to $8,000 and $2,200, respectively, and noted that it is entirely plausible that "these targets are reached over the coming week, if not, even more likely over the next 3 months."
Meanwhile, Bank of America, taking the 2018/19 US-China trade dispute as a reference, forecast that copper could likely fall below $8,000 by summer.
(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Janane Venkatraman and Sahal Muhammed)
