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SINGAPORE, June 12 (Reuters) Copper, one of the key drivers of a boom in the commodities sector in the past few years, tumbled on Monday as investors fled the metals complex on fears that rising interest rates could slow global economic growth.

Monday's decline in copper prices on the London Metal Exchange dragged sharply down prices for other industrial metals and futures markets in Shanghai and New York.

By 0406 GMT the benchmark LME copper contract was at $6,950/$6,990 a tonne, down $270 or 3.7 percent from Friday's London close. It had earlier bid as low as $6,940/$6,990, the lowest since April 25.

On Friday, the red metal lost $90, or 1.2 percent, to close at $7,220.

''It might be technical selling after the copper market failed to hold the $7,250 and then $7,000,'' said a metals dealer with a major Japanese trading house.

Consumers in Asia were largely staying on the sidelines on hopes for further declines in copper prices after the market fell below $7,000 a tonne, he said, putting major support for copper at the 100-day moving average of around $6,000.

Market sentiment remained depressed due to a strong dollar and fears of slowing global economic growth and inflation, which in turn could dampen demand for industrial metals, while supportive fundamentals in base metals had been largely ignored.

China's imports of copper and copper products in the first five months of 2006 fell 23 percent from a year earlier, while primary aluminium and aluminium alloy exports fell 22.2 percent, customs figures showed on Monday.

TIGHTENING LIQUIDITY ''It's very much driven by liquidity,'' said Rick Holmes, director of Mitsui Bussan Commodities in Sydney.

''At the present moment, you've got the U.S. dollar strengthening, you've got fears of inflation and you've got strong belief that the United States will raise rates ... which gradually means that liquidity is going to tighten up.'' Prices for copper, used in wiring, tubes and coins, reached an all-time high of $8,800 on May 11, having jumped more than six-fold since late 2001 on strong demand in China and India, supply disruptions and relentless fund buying.

Since then, copper has retreated as much as 21 percent, but is still up around 58 percent since the end of last year.

In electronic trade, copper for July delivery fell 7.25 cents to $3.1950 a lb after trading as high as $3.2600 on the New York Mercantile Exchange's COMEX division.

Meanwhile, the latest Commitments of Traders data issued late Friday by the Commodity Futures Trading Commission showed that net non-commercial short positions for copper rose to 7,302 lots in the week ended June 6, from 6,372 lots the previous week.

Non-reportable net long positions fell to 83 lots, compared with 453 lots in the week ended May 30.

Shanghai copper futures fell by their daily trading limits on Monday, with the most active August contract down 5 percent, or 3,340 yuan, from the previous settlement to end the morning session at 63,280 yuan ($7,910) a tonne.

It was also down 3,290 yuan from the previous close.

Shanghai aluminium futures were also lower, with the most active August contract losing 150 yuan to end the morning session at 20,410 yuan a tonne.

LME aluminium was at $2,485/$2,495 a tonne versus $2,510 on Friday, while zinc was at $3,270/$3,295 a tonne against $3,320.

In other commodities, oil prices held steady below $72 a barrel, while gold edged down below $625 an ounce on a firmer dollar, weakness in global equity markets and losses in industrial metals.

Metal Prices by 0406 GMT LME ($/tonne), SFE (yuan/tonne) and COMEX (US cents/lb) Metal Last Net Change Pct Move LME Cu 6950.00 -270.00 -3.74 SHFE Cu* 63280.00 -3290.00 -4.94 LME Alum 2485.00 -25.00 -1.00 SHFE Alu* 20410.00 -150.00 -0.73 COMEX Cu** 330.50 -6.80 -2.02 LME Zinc 3270.00 -50.00 -1.51 LME Nickel 19650.00 -350.00 -1.75 LME Lead 1010.00 0.00 +0.00 LME Tin 7800.00 -175.00 -2.19 Change so far in 2006 Metal Latest bid End prev year Pct Move LME Cu 6950.00 4395.00 +58.13 SHFE Cu* 63280.00 41720.00 +51.68 LME Alum 2485.00 2276.00 +9.18 SHFE Alu* 20410.00 19360.00 +5.42 COMEX Cu** 330.50 204.20 +61.85 LME Zinc 3270.00 1905.00 +71.65 LME Nickel 19650.00 13500.00 +45.56 LME Lead 1010.00 1051.00 -3.90 LME Tin 7800.00 6475.00 +20.46 * 3rd contract months for SHFE copper and aluminium.

** 1st contract month for COMEX copper.

($1=8.00 yuan) REUTERS DKS SSC1149