Shanghai copper fell nearly 1 percent, while London futures pared losses as rising stocks, slowing demand and a weakened chart picture dulled the outlook for base metals. January's copper contract, the most active on the Shanghai Futures Exchange, fell 0.8 percent or 500 yuan to 63,220 yuan ($8,481) a tonne.
"Demand is still slow in China, and it is not expected to pick up any time soon. This week, copper will keep falling, but should find strong support at 60,000 yuan," said Lie Rong, an analyst at Great Wall Futures. London Metal Exchange copper was $45 firmer at $7,480 after it dipped to a seven-week of $7,390 on Friday.
"The market looks weak technically. There is support at these numbers, but any rally will be sold into while stocks continue to rise," an LME dealer in Hong said, adding that prices could break down towards $7,200. LME warehouses are up by nearly 30 percent in the past two weeks to more than 77,000 tonnes. "Again in zinc, the weaker technical picture is being amplified by pressure from stocks increases," the dealer said.
Benchmark Shanghai zinc, fell 460 yuan to 23,285 yuan, after it hit a new lifetime low of 23,225, while LME futures were down $29 at $2,740. Trilled Metals described LME zinc's technical picture as weak with attempts to rally likely to meet with heavy resistance towards $3,000.
"Further price deterioration will meet support at $2,685, with a breakdown below here likely to force moves to the $2,400 region initially," the brokerage said in a report. But new supply threats were emerging that could support base metals markets. Peru's biggest federation of mining unions said over the weekend that a strike would begin on Monday the second nation-wide this year in the world's third-largest producer of copper and zinc, and the fifth-largest producer of gold.
In the longer term, recommendations by a mining commission in the Democratic Republic of Congo that 61 mining contracts should be cancelled or renegotiated could slow projects in one of the world's unexploded minerals treasure chests.
Thirty-seven contracts, including those with Freeport McMoRan Copper & Gold Inc, BHP Billion and Nikons, needed renegotiating while the remaining 24 should be terminated, the commission recommended.
Shares in BHP in Australia were down 2.1 percent, under-performing Sydney's S&P ASX 200, which fell 1.2 percent. Aluminium fell $2 to $2,620. Prices have risen 9.5 percent since mid-October, while copper has lost 7 percent in the same period.
"There are some fund plays in aluminium it pushed through $2,500 and accelerated while copper was getting smashed on Friday," the Hong Kong dealer said, adding that resistance at $2,680 could slow the metal's rise. The looming expiry of November options on Wednesday may have explained aluminium's perverse behaviour, dealers said.
The number of outstanding call options to buy November aluminium futures at a price of $2,500 a tonne had risen to more than 4,000 and at $2,600 there were 4,295 lots of open interest. Shanghai aluminium was down around 1 percent at 18,500, under pressure from domestic oversupply and end-year sales by smelters.