The picture is similar for other metals, such as copper and nickel, although there may be some light at the end of the tunnel for zinc, traders said.

"Stocks are going to keep on rising in copper and aluminium, but one of two of the other metals look to have bottomed," one senior trader said.

Macquarie Equities Ltd noted that optimism appeared to beevaporating quickly, since in the two largest markets, copper and aluminium there is little to prevent large surpluses.

"It is hard to see what can prevent further price erosion over the next month or so in these metals," Macquarie said.

LME inventories for copper and aluminium rose throughout last week - the latter metal's total warehouse stockpile increased by over 111,000 tonnes during the week. Already this year, LME aluminium stocks have jumped by over 22 percent, a direct result of the current technical tightness, traders said.

"There is plenty of metal out there, and more of it is going to be put on warrant. And nobody is going to cut back production, either," another trader said.

On Monday LME aluminium stocks rose by 15,150 tonnes. Analysts said that falling aluminium values - the market hit a five year low of $1,199 last Friday - are not hurting many producers because alumina and power intake prices are related to LME levels.

Falls to fresh price lows on the LME were averted on Friday by end-week short-covering. But the market may not stave off a further downside assault, with macro-fundamentals turning as well.

Brazil's financial crisis remains paramount, with the Central bank having had to defend its plunging currency. Argentina's proposal to adopt the dollar as its currency to stave off devaluation threats highlights the growing uncertainty in the region.

If aluminium loses touch with $1,200, prices could rapidly unravel and head down to $1,150,traders said.

Copper faces a similar scenario of rising inventories against a background of a deteriorating ecomomic outlook.

Warehouse stocks are up nearly 25,000 tonnes already this year, and are set to continue rising as South American metal is moved in Europe.

Zinc traders are marginally less pessimistic after a strong rally in the middle of last week, against a background of inventory drawdowns.