METALS-London copper edges up as dlr eases; U.S. fiscal standoff caps gains
* Resolution to U.S. debt standoff could spark relief rally -Rivkin
* China Sept HSBC Services PMI 52.4 vs prev month 52.8
* Coming up: Germany industrial orders at 1000 GMT
(Adds comment, detail; updates prices) SINGAPORE, Oct 8 (Reuters) - London copper edged up on Tuesday as the dollar weakened, but trading was quiet as China returned from a week-long holiday and as the U.S. fiscal standoff continued to cloud the outlook for demand. Copper prices have been trapped in a $7,000-$7,500 range since early August. Seasonal demand from copper product makers in China is heating up on pre-Christmas orders but the market is amply supplied. Risk aversion is also tainting investment demand for the metal, traders and analysts said. "There are concerns about the negative impact on the U.S. economy if things go pear-shaped, so people are pulling some risk off the table," said analyst Tim Radford at Sydney-based advisor Rivkin. "If we see any form of resolution to the partial government shutdown ... in the next week, then I think that will be a big upside catalyst for most markets - including metals," he added. Three-month copper on the London Metal Exchange was trading at $7,261 a tonne by 0723 GMT, up 0.2 percent from the previous session when it finished little changed. Prices are down more than 8 percent for the year. The most-traded January copper contract on the Shanghai Futures Exchange slipped 0.10 percent to close at 52,520 yuan ($8,600) a tonne. A few faint glimmers of hope surfaced on Monday in the U.S. fiscal standoff, both in Congress and at the White House, with President Barack Obama saying he would accept a short-term increase in the nation's borrowing authority to avoid a default. China and Japan, the United States' biggest creditors, are increasingly worried the U.S. government shutdown and standoff over the debt ceiling could wreak havoc on their trillions of dollars of investments in U.S. Treasury bonds. Growth in China's services industry slowed in September and optimism over the business outlook weakened, a private survey showed on Tuesday, indicating that the nascent recovery in the world's No.2 economy is likely to remain a slow one.
"There is an element of short-covering and the weaker dollar is helping," said one trader in Hong Kong. "But I'm struggling to see much upside. China has come back and no reaction," he added. The dollar eased off a fresh two-month low against the yen touched in early trade on Tuesday and remained not far from an eight-month low against a basket of major currencies. A weaker dollar makes commodities priced in the U.S. unit cheaper for holders of other currencies. Elsewhere, the annual metals industry week continues in London this week. Aurubis, Europe's biggest copper smelter, expects annual term treatment and refining charges for Europe in 2014 to be agreed at around $95 per tonne and 9.5 cents per pound, Aurubis Chief Executive Peter Willbrandt said on Monday. Copper products maker KME Group, a unit of Italy's Intek Group SpA, will insist on passing on rising copper premium costs when it negotiates 2014 supply deals with clients this quarter, it said on Monday.
Base metals prices at 0718 GMT
Metal Last Change Pct Move YTD pct chg LME Cu 7268.25 23.25 +0.32 -8.33 SHFE CU FUT DEC3 52520 -50 -0.10 -8.95 HG COPPER DEC3 3.31 0.01 +0.38 -99.09 LME Alum 1860.75 5.75 +0.31 -10.15 SHFE AL FUT JAN4 14320 70 +0.49 -6.68 LME Zinc 1884.00 7.00 +0.37 -8.70 SHFE ZN FUT JAN4 14765 -780 -5.02 -5.02 LME Nickel 13955.00 -5.00 -0.04 -18.65 LME Lead 2074.75 13.75 +0.67 -11.34 SHFE PB FUT 14055.00 -75.00 -0.53 -7.84 LME Tin 23760.00 110.00 +0.47 1.54 LME/Shanghai arb^ -486
Shanghai and COMEX contracts show most active months
PRICES Three month LME copper Most active ShFE copper Three month LME aluminium Most active ShFE aluminium Three month LME zinc Most active ShFE zinc Three month LME lead Most active ShFE lead Three month LME nickel Three month LME tin ($1 = 6.1220 Chinese yuan)
(Reporting by Melanie Burton; Editing by Joseph Radford)