London copper fell to a 20 month low before bouncing slightly, while Shanghai futures dropped more than 2% on fears of a slowdown in China's economic growth. Base metals have also been hammered by the US Federal Reserve's plan to curb its stimulus program which has been key in boosting commodity prices. Three month copper on the London Metal Exchange had risen 0.75% to USD 6,820.75 per tonne by 0247 GMT due to a weaker dollar but was heading for a third weekly fall. The contract earlier slipped to USD 6,692 per tonne its weakest since October 2011. The most traded copper contract on the Shanghai Futures Exchange dropped 1.16% to CNY 49,340 per tonne. It earlier fell to its weakest since late April at CNY 48,390. Ms Joyce Liu an investment analyst at Phillip Futures said that "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. 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.

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