METALS-Base metals decline as US-China trade conflict ramps up recession fears

April 7 (Reuters) - Base metals in London declined on Monday, with copper hitting its lowest level in over 16 months on fears about reduced demand and higher chances of a recession following trade tensions between the U.S. and China.

The benchmark three-month copper CMCU3 on the London Metal Exchange (LME) fell 0.5% to $8,734.5 per metric ton by 1606 GMT. The contract touched $8,105 its lowest since November 2023 in early Asian hours of the session.

LME has priced "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.

Among other metals, LME lead CMPB3 ticked down 1.7% to $1,873.5, zinc fell 1.2% to $2,623.5, tin CMSN3 was down 5% at $33,555, nickel CMNI3 slipped 1.8% to $14,505 a ton and aluminium CMAL3 eased 0.4% to $2,369.5 a ton.

"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.

U.S. President Donald Trump said he will impose an additional 50% tariff on China if Beijing does not withdraw its retaliatory tariffs on the United States. China on Friday said it will impose additional tariffs of 34% on all U.S. goods from April 10.

Meanwhile, White House economic adviser Kevin Hassett said the president has talked to world leaders all weekend and will listen to proposals for great deals.

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 U.S.-China trade dispute as a reference, forecast that copper could likely fall below $8,000 by summer.

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