(Updates prices, adds U.S. manufacturing) By Eric Onstad LONDON, July 1 (Reuters) - Copper prices slumped on Fridayto their weakest in 17 months as inflation and factory datareinforced fears that central bank tightening would pusheconomies into a recession and hit metals demand. Three-month copper on the London Metal Exchange hadeased 2.6% to $8,047 a tonne by 1630 GMT after dropping to itslowest since early February 2021 at $7,955.
"Recession fears are the dominating factor right now, that'staking casualties right, left and centre. Every time there's anindication of more hawkish policy, markets fall further," saidNitesh Shah, commodity strategist at WisdomTree.
Euro zone inflation hit another record high in June, datashowed on Friday, which Shah said "looks alarming high, givingmore firepower to the ECB". Even some bullish news from top metals consumer China failedto lift sentiment. China's manufacturing activity expanded atits fastest in 13 months in June, buoyed by a strong rebound inoutput. But U.S. manufacturing activity slowed more than expected inJune to a two-year low, while the picture was also gloomy in theeuro zone. "Trying to get China back to full speed when the rest of theworld is looking like it will slow down is going to bedifficult," Shah added. LME copper was on track for a fourth consecutive weeklydecline, having registered its worst quarter since 2011 in thethree months ended June, falling 20.4%. It was down 4% for theweek. Other industrial metals also fell, with zinc dropping 9%this week and aluminium headed for its sixth straight weeklyfall. * Also weighing on metals was a firmer dollar index ,making commodities priced in the U.S. currency more expensivefor buyers using other currencies.* Why sentiment in industrial metals has been crumbling* LME aluminium was barely weaker at $2,445 a tonne,zinc dropped 3.3% to $3,052.50, the lowest since October2021, and tin shed 1.1% to $26,150. Nickel slid 3.6% to a five-month low of $21,890, but lead climbed 1.7% to $1,940.50. (Reporting by Eric Onstad; additional reporting by BrijeshPatel in Bengaluru; editing by Barbara Lewis, Shinjini Ganguliand David Evans)
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