The most-traded July copper contract on the Shanghai Futures Exchange hit a seven-month trough before cutting losses to trade at 55,190 yuan ($8,900) a tonne, down 3.2 percent on Monday after an unusual bailout proposal for Cyprus reignited fears of a euro zone crisis, pummelling the euro and spurring investors to shed risky assets.
Losses in copper sparked selling in LME and ShFE zinc, also contracts popular with speculators and algorithm-based funds. LME zinc fell to an almost four-month low while ShFE zinc tumbled to its lowest in four years. Worries about the euro zone tipping back into crisis may have sparked the sell-off, but prices will soon find a floor as industry in top consumer China heads into the second quarter, which is seasonally the strongest, Singapore-based analyst Bonnie Liu of Macquarie said. "I don't see any fundamental drivers from China - I wonder how long the sell-off can continue," she said.