* Strong debut due to renewed speculative demand
* Trading halted after turnover breached regulatory limits
* China's economic slowdown shows little sign of decelerating
(Adds quotes about regulator intervention)
By Samuel Shen and Kazunori Takada
SHANGHAI, Oct 9 (Reuters) - China Molybdenum Co Ltd , backed by billionaire Yu Yong, nearly tripled on its Shanghai debut as investors deemed the stock to be undervalued after regulators ordered the company to scale back its offering to ease a glut of new issues.
The China Securities Regulatory Commission (CSRC) had China Molybdenum cut the price by half at the last minute and reduce the size of the sale by five-sixths to 600 million yuan ($95 million), Thomson Reuters publication IFR reported last month.
The Chinese producer of tungsten and molybdenum, used to harden steel, originally set the price at 6 yuan a share, a level where the institutional book was fully covered, IFR said.
"This was a very rare and heavy intervention by the regulators," said Liu Li, an analyst at Yingda Securities Co. "There was concern by the regulator that the offering would weigh on an already sluggish market. Today's market response shows that the offering was priced too cheaply."
Shares in China Molybdenum opened at 8.70 yuan on Tuesday. Trading was halted less than an hour-and-a-half into the session as turnover reached 80 percent of the number of shares offered.
China Molybdenum closed at 9.63 yuan.
The company had set a pre-marketing range of 6.49-8.48 yuan, but was urged by CSRC to set the price at 3 yuan, according to IFR.
More than 137 institutional investors, including Shanghai AJ Corp and Fullgoal Fund Management Co., subscribed to the shares at the offer price last month.
The lower-than-expected price stirred speculative interest in the stock, said Zhang Fang, an analyst at Dongxing Securities.
Neither China Molybdenum nor CSRC could be immediately reached for comment.
For China Molybdenum , it wouldn't have been wise to postpone the Shanghai IPO as China's economic slowdown weighs on the market in the longer term, analysts said.
The Shanghai Composite Index is down 3.8 percent so far this year, after falling about 22 percent last year. The index rose 2 percent on Tuesday.
Dongxing Securities expects China Molybdenum, partly owned by private equity firm Cathay Fortune Corp (CFC) founded by billionaire Yu, to report a 2 percent net profit drop this year due to feeble demand for the metal.
Chinese steel-related firms have been struggling to post profits this year as slowing economic growth erodes demand from key downstream sectors like real estate and automobiles. They are also struggling with long-term structural issues including chronic over capacity.
Essence Securities led the China Molybdenum deal, with BOC International (China) and China Merchants Securities also acting as joint bookrunners, IFR reported.
(Additional reporting by Elzio Barreto in HONG KONG; Editing by Ryan Woo)
Keywords: CHINA MOLYBDENUM/IPO