* China exports unexpectedly shrink 18.1 pct in February
* Copper hits lowest since June, U.S. oil down over $1
* Shanghai copper down 5 pct, Dalian iron ore off nearly 6 pct
By Manolo Serapio Jr
SINGAPORE, March 10 Copper sank to 8-1/2 month lows on Monday, dropping steeply for a second session, while oil lost more than a dollar and Shanghai-traded commodities slumped after a surprise fall in China's exports heightened fears of an economic slowdown.
China's exports fell 18.1 percent in February from a year ago, confounding market expectations for an increase and adding to a series of weak factory surveys from the start of 2014 that point to weakness in economic activity at the world's top consumer of most commodities.
Chinese commodities bore the brunt of the sell-off, with Shanghai copper sliding 5 percent, rubber down more than 4 percent and Dalian iron ore futures slumping nearly 6 percent. China's equities sank to a five-year low.
"The China data shows there will be more difficult times ahead," an iron ore trader in Shanghai said.
Three-month copper on the London Metal Exchange hit a session low of $6,608 a tonne, its cheapest since June 25.
The metal was down 1.4 percent at $6,690 by 0842 GMT, adding to a 3.8 percent loss on Friday which was its steepest decline since April 2012.
Copper in Shanghai fell by its daily downside limit of 5 percent to close at 46,670 yuan ($7,600) a tonne.
Despite a drop in overall exports, China's imports of most commodities from copper to crude oil and iron ore rose in February from a year ago. The weak exports suggest China's commodity import demand could weaken in the coming months as end-users draw down swollen inventories.
But China's imports of oil, copper and iron ore all fell from levels in January.
"Fundamental demand has not resumed to normal levels yet," said analyst Chunlan Li of minerals consultancy CRU in Beijing.
Brent crude declined $1.13 to $107.87 a barrel, snapping a two-day rise fuelled by tensions between Russia and Ukraine that could potentially disrupt oil supplies.
U.S. oil fell $1.25 to $101.33, after touching a high of $102.82.
Russian forces tightened their grip on Moscow-backed Crimea by seizing another border and a military airfield as German Chancellor Angela Merkel told Russian President Vladimir Putin that a planned referendum on whether Crimea should join Russia was illegal and violated Ukraine's constitution.
Shanghai steel futures dropped 4 percent to a contract low of 3,221 yuan a tonne, and Dalian's iron ore slid 5.9 percent to 728 yuan a tonne, its weakest since the bourse introduced iron ore futures on Oct. 18.
Steel demand in China, the world's biggest consumer and producer, has been weak since the start of the year as a slowing economy curbs demand for the building material.
Construction activity, which typically picks up from March, is unlikely to spur a strong recovery in demand for steel as Beijing pursues economic expansion that is less driven by investment and more fuelled by domestic consumption.
Spot gold fell for a second session and hit a one-week low of $1,328.86 an ounce, largely due to the strong U.S. employment data released on Friday that suggested the Federal Reserve's stimulus tapering efforts will stay on course.
But some traders say the disappointing Chinese trade data also weighed as investors in Shanghai futures and spot contracts sold bullion. China is the world's top gold consumer.
"We can see liquidation from the Shanghai futures exchange and there is no fresh buying interest on the physical side," said Peter Fung, head of dealing at Hong Kong's Wing Fung Precious Metals.
U.S. corn and wheat dropped more than 1 percent as investors squared positions ahead of a U.S. government report on global supply-demand of agricultural products due later in the day.
($1 = 6.1260 Chinese yuan) (Editing by Himani Sarkar)