METALS-Tariff war fears drag most London base metals lower

Updates prices

Feb 3 (Reuters) - Most base metals in London slipped on Monday, with copper hitting a four-week low, as U.S. President Donald Trump's 10% tariff on imports from top metals consumer China, fuelled trade war concerns and added to market uncertainty.

Benchmark copper CMCU3 was down 1.1% at $8,945.5 a metric ton, as of 0725 GMT, hitting its lowest since Jan. 6.

The dollar index .DXY touched a three-week high, making greenback-priced commodities more expensive for holders of other currencies. USD/

Trump on Saturday imposed 25% tariffs on Mexican and most Canadian imports, and 10% on goods from China, starting on Tuesday. White House officials said there would be no exclusions from the tariffs.

China said it would challenge Trump's move at the World Trade Organization and take other countermeasures, while Canada and Mexico immediately vowed retaliatory measures.

"Base metals are highly dependent on growth factors, and trade tensions create a negative feedback loop on global growth," said Kelvin Wong, OANDA's senior market analyst, Asia Pacific.

"The market is anticipating retaliatory measures, particularly from China, which could further impact metal prices negatively."

More tariffs are coming, Trump said, adding that import taxes were being considered on European goods, as well as on steel, aluminium and copper, and on drugs and semiconductors.

Citi said further tariff escalation was bearish for copper to $8,500 a ton over the next three months, on an ex-U.S. price basis.

Three-month aluminium CMAL3 fell 0.9% to $2,571.5, easing to a more than two-week low.

JPMorgan forecast LME aluminium could move lower towards $2,400 amid a near-term pricing in of risk premium, given the ramped-up economic and inflationary tariff risks.

LME zinc CMZN3 fell 0.6% to $2,727 a ton, tin CMSN3 eased 1.2% to $29,750 and nickel CMNI3 lost 0.2% to $15,175, while lead CMPB3 gained 0.2% to $1,953.

The Shanghai Futures Exchange is closed for the Lunar New Year holiday. Markets will resume trade on Wednesday, Feb. 5.

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