LONDON - Copper prices fell to 17-months lows on Monday as new COVID restrictions in top consumer China, slowing global manufacturing activity and a jump in inventories sparked demand worries and a sell-off.

Benchmark copper on the London Metal Exchange (LME) was down a touch at $8,044 a tonne at 1040 GMT. Prices of the metal used in power and construction earlier fell to $7,918, its lowest since February 2021.

"China's manufacturers have had an awful time. People are fearful of inflation and recession, but the probability of recession is less than 50%," said Dan Smith, managing director at Commodity Market Analytics. "The market needs to find a floor, but industrial metals are starting to look like good value."

COVID: Cities in eastern China tightened COVID-19 curbs on Sunday as coronavirus clusters emerged, posing a new threat to the country's economic recovery under the government's strict zero-COVID policy.

ACTIVITY: Global manufacturing struggled in June as higher prices and a darker economic outlook left consumers wary of making purchases, while Russia's invasion of Ukraine added to supply chain disruptions, surveys showed.

INVENTORIES: Copper stocks in LME approved warehouses jumped 10,100 tonnes to 136,950 tonnes. They have risen more than 20% over the past week.

INFLATION: Hitting economic activity is soaring inflation and interest rate rises in many countries including the United States where the Federal Reserve is expected to deliver another 75-basis-point rate hike this month.

POSITIONING: Marex Analytics estimates that short copper positions - bets on lower prices - are as large as they were in 2015 when economic growth in China slowed to a 25-year low. At close of business June 30, the copper short was 1.5 million or 43.6% of open interest compared to the peak of 3.1 million tonnes and 72.2% in 2015 and up from about one million tonnes and 29.8% on June 23, Marex said.

OTHER METALS: Aluminium was up 0.5% to $2,457, zinc gained 2.6% to $3,109, lead slipped 0.7% to $1,920, tin added 0.9% to $26,900 and nickel climbed 4.3% to $22,770 a tonne.

(Reporting by Pratima Desai; additional reporting by Brijesh Patel in Bengaluru; editing by Jason Neely)