Oil moved to within a hair of 11-year lows at one point on fears over a worsening supply glut, deterring investors from buying into commodity basket funds.
The slide in oil coupled with weakness in credit markets, seen as the most vulnerable to higher US interest rates, hit global equities.
Three-month copper on the London Metal Exchange ended down 0.5 per cent at $US4,678 a tonne, after gaining 2.5 per cent in the previous session to touch two-week highs.
A London-based broker said investors were waiting on the sidelines ahead of the US Federal Reserve’s rate decision on Wednesday (US time), with no strong buy or sell signals present.
“Given the weakness in oil and US equities, the odds of base metals pushing substantially higher look somewhat limited,” said Ed Meir at INTL FCStone in a note.
In China, the yuan hit a four-and-a-half-year low after the central bank again lowered the yuan midpoint rate, weighing on emerging markets and Asian equities.
On the plus-side, data at the weekend showed China’s factory output growth reached a five-month high in November, signalling that a flurry of stimulus measures from Beijing may have put a floor under the economy. China consumes nearly half of the world’s copper.
“The China data (this weekend) is the first glimmer of light. Metals have been fairly oversold. If markets start to feel maybe things are turning around in China, there’s room for short covering,” said William Adams, head of research at Fast Markets.
Aluminium ended up 0.6 per cent at $US1,491.50.
China’s aluminium smelters on Friday pledged to shut more production this month and not to add any new capacity in 2016, as the industry pushes to shore up plunging prices.
“The announcement that Chinese smelters would cut 500,000 tonnes by year end did little for the (aluminium) price,” said Triland. “This underlines just how poor sentiment is.”
Nickel ended 0.8 per cent higher at $US8,750.
The government of the Australian state of Queensland on Saturday said it had rejected a plea for assistance from Australian mining magnate Clive Palmer that he says is needed to avert the closure of his Queensland Nickel refinery.
Lead closed up 0.6 per cent at $US1,737, having hit its highest since end-October at $US1,739.50; zinc ended up 0.2 per cent at $US1,554; tin closed up 0.9 per cent at $US14,725.
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