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METALS-Shanghai base metals fall as U.S.-China trade tension escalates

MANILA, May 6 (Reuters) - Shanghai base metals fell sharply on Monday, with copper and nickel declining more than 3 percent, as trade tensions between China and the United States escalated, just days after investors were upbeat about progress in the two countries' trade talks.

President Donald Trump on Sunday announced he would hike tariffs on $200 billion worth of Chinese goods this week and target hundreds of billions more soon.

Trump's remarks took Chinese officials by surprise and Beijing was considering cancelling this week's trade talks in Washington in light of his comments, the Wall Street Journal reported on Sunday night.

Just last week, U.S. Treasury Secretary Steven Mnuchin said the two countries completed "productive" trade talks in Beijing, with some observers saying a deal announcement was possible this week in Washington.

FUNDAMENTALS

* The most-traded copper contract on the Shanghai Futures Exchange fell as much as 3.1 percent to 47,420 yuan ($6,982.98) a tonne in early trade, and was down 1.9 percent by 0209 GMT.

* The Shanghai exchange was closed for five days from May 1 for the Labour Day holidays.

* Copper on the London Metal Exchange rose on Friday on a weaker dollar and expectations for progress in U.S.-China trade talks, but the move higher was not enough to rescue prices from their worst week since November.

* Shanghai nickel futures slid as much as 3.2 percent to 95,000 yuan a tonne.

* LME Asia Week, LME's Hong Kong gathering of executives, traders and brokers, kicks off on Monday.

* For the top stories in metals and other news, click or

MARKETS NEWS

* Asian equities tumbled, oil prices plunged and the safe-haven yen strengthened early on Monday as trade negotiations between China and the United States deteriorated suddenly, reversing apparent progress made in recent months.

PRICES

Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin

ARBS ($1 = 6.7908 Chinese yuan)

(Reporting by Enrico dela Cruz; editing by Uttaresh.V)