METALS-Copper sinks to 20-month low on China growth fears, Fed
* London copper hits lowest since Oct. 2011
* Coming up: U.S. ECRI weekly index at 2230 GMT
SINGAPORE, June 21 (Reuters) - London copper fell to a 20-month low on Friday before bouncing slightly, while Shanghai futures dropped more than 2 percent on fears of a slowdown in China's economic growth. Base metals have also been hammered by the U.S. Federal Reserve's plan to curb its stimulus programme, which has been key in boosting commodity prices. Three-month copper on the London Metal Exchange had risen 0.75 percent to $6,820.75 a tonne by 0247 GMT due to a weaker dollar, but was heading for a third weekly fall. The contract earlier slipped to $6,692 a tonne, its weakest since October 2011. The most-traded copper contract on the Shanghai Futures Exchange dropped 1.16 percent to 49,340 yuan a tonne. It earlier fell to its weakest since late April at 48,390 yuan.
"If you look at all the indicators, China is not doing well. The economy is slowing down and the Chinese government has made it clear they are tolerating the slowdown and they are expecting it," said Joyce Liu, an investment analyst at Phillip Futures. "I think the outlook for base metals is not good because it's very closely tied to the Chinese economy. By from what they are saying, the Chinese government is not going to try to ease the situation now." China's factory activity weakened to a nine-month low in June as demand faltered, a preliminary survey showed on Thursday, heightening the risk of a sharper second quarter slowdown. China's two shortest-term rates hit record highs on Thursday, as the central bank again ignored market pressure to inject funds into the market, a move seen as an attempt to force banks and other financial institutions to trim non-essential businesses. Aluminium added 0.45 percent to $1,805.50, but was still within sight of its lowest level in more than three years hit in the session before. "We think aluminium could come under additional selling pressure with LME aluminium stockpiles hitting record high levels of 5.43 million tonnes," ANZ said in a report. "High supply in the market appears to be offsetting reports of China's government looking to block plans to build 10 million tonnes of new lower cost capacity in the Xinjiang province alongside recent smelter cuts." Beijing last month ordered local governments to stop "blind expansion" in bloated industries such as aluminium, steel, cement, glass and shipbuilding. In other markets, stocks extended losses on Friday.
Base metals prices at 0247 GMT
Metal Last Change Pct Move YTD pct chg LME Cu 6820.75 50.75 +0.75 -14.00 SHFE CU FUT OCT3 49340 -580 -1.16 -14.83 HG COPPER JUL3 3.07 0.01 +0.41 -15.82 LME Alum 1805.50 8.00 +0.45 -12.90 SHFE AL FUT OCT3 14355 -50 -0.35 -8.39 LME Zinc 1842.00 12.50 +0.68 -11.44 SHFE ZN FUT OCT3 14395 -15 -0.10 -10.34 LME Nickel 13740.00 40.00 +0.29 -19.46 LME Lead 2035.00 17.00 +0.84 -12.66 SHFE PB FUT 13970.00 -90.00 -0.64 -12.96 LME Tin 19500.00 0.00 +0.00 -16.67 LME/Shanghai arb^ -639
Shanghai and COMEX contracts show most active months month
(Editing by Joseph Radford)