LONDON: Copper fell 1 percent and aluminium hit its lowest since mid-December as base metals largely wilted on Monday ahead of an expected increase to US interest rates and as finance ministers met for a G20 summit.
Alongside concerns that higher interest rates could dampen growth, US President Trump's announcement of import tariffs on steel and aluminium has sparked fears of a global trade war that could weigh on demand for raw materials.
"Anything that undermines global growth will undermine metals consumption," said Societe Generale analyst Robin Bhar.
Aluminium, which has registered sharp increases in stockpiles in recent weeks as cuts to Chinese smelting capacity came to an end, slipped to its lowest since mid-December.
"We've seen some big stock builds on the London Metal Exchange and, more importantly, the Shanghai Futures Exchange, and that's the root of the problem," Bhar said.
"It must be that the winter cuts were not as deep as the market had been expecting, plus demand must be weaker than originally thought."
COPPER: London Metal Exchange copper was down 1 percent at $6,816 a tonne in official midday trading, extending losses from Friday. Prices dipped as low as $6,785, the weakest level since March 9.
GLOBAL MARKETS: Shares were stuck on their worst run since November as caution gripped traders in a week in which the Federal Reserve is widely expected to raise US interest rates.
G20: Worries about a possible US-China trade war and frustration over Trump's steel and aluminium tariffs threatened to dominate this week's G20 gathering of finance leaders.
CHINA DEMAND: Growth in prices of new homes in China slowed in February from the previous month as government curbs aimed at tempering speculative demand softened prices in the biggest cities.
ALUMINIUM PRICES: LME three-month aluminium slid to its lowest since Dec. 19 at $2,069 a tonne. Untraded in official rings, it was last bid at $2,090, up 0.2 percent.
ALUMINIUM STOCKS: Shanghai aluminium stocks surged by 87,303 tonnes to a record 934,216 tonnes, data showed on Friday.
Stocks of the metal in LME warehouses fell by 12,250 tonnes, according to data released on Monday, but are still up 22 percent from February lows.
INVESTORS: Hedge funds and money managers trimmed their net long positions in COMEX copper contracts in the week to March 13, regulatory data showed on Friday.
OTHER METALS: LME zinc was up 0.1 percent in official trading at $3,262 a tonne, while tin was down 1.2 percent at $20,745. Nickel and lead were untraded in official rings and were bid down by 1 percent and 0.9 percent respectively to $13,480 and $2,362 a tonne.
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