METALS-London copper slips as U.S. deadlock drains risk appetite
* Warehouse regulation in focus at LME week
* Volumes improve as China back in market after holiday
* Coming Up; German August Industrial Output at 1000 GMT
(Adds detail; updates prices) SINGAPORE, Oct 9 (Reuters) - London copper fell on Wednesday to its weakest level in three sessions as a lack of progress on the U.S. fiscal deadlock eroded appetite for risk assets, while Chinese consumers were content to wait for lower prices. Copper is drifting back to the bottom end of the $7,000-$7,500 range it has held for the past two months, with swelling supply also dousing investor interest and quelling any urgency for consumers to stock up. "Everyone seems to be waiting to see what happens in the U.S. ... we are already seeing markets being a bit shaky," said economist Alexandra Knight of National Australia Bank in Melbourne. "Our central forecast is that it will be resolved. Given we don't see it having a material impact on GDP growth, any shift in commodity prices as a result of the shutdown are likely to be short lived." President Barack Obama refused to give ground in a fiscal confrontation with Republicans on Tuesday, saying he would negotiate on budget issues only if they agree to re-open the federal government and raise the debt limit with no conditions. Three-month copper on the London Metal Exchange eased to $7,170.75 a tonne by 0711 GMT, down 0.9 percent from the previous session when it finished little changed, and having earlier plumbed its lowest level at $7,165 a tonne since Oct. 4. The most-traded January copper contract on the Shanghai Futures Exchange fell 1.1 percent to close at 51,840 yuan ($8,500) a tonne. China markets were back for a second day after a week of holidays with volumes picking up to more than 6,000 lots, a touch above typical levels, as copper prices fell. A downward revision to global growth by the International Monetary Fund was also fanning negative sentiment, Knight added. The IMF expects global output to expand 2.9 percent this year, down from its July estimate of 3.1 percent, making it the slowest year of growth since 2009. LME week in London continues on Wednesday, with regulation of its backlogged warehousing network a hot topic. Global aluminium premiums have fallen due to "confusion" over the London Metal Exchange's proposal announced on July 1 to overhaul its warehousing policy, Alcoa Inc Chief Financial Officer and Vice President William Oplinger said on Tuesday. Britain's financial watchdog focused on the LME's warehousing crisis, stressing the importance of its global storage network to maintain the integrity of the market.
Chinese authorities have arrested and charged the chairman of the world's largest producer of refined tin, Yunnan Tin Co , for accepting bribes, a provincial government said, in the latest example of the country's crackdown on graft.
Base metals prices at 0711 GMT
Metal Last Change Pct Move YTD pct chg LME Cu 7170.75 -68.25 -0.94 -9.56 SHFE CU FUT DEC3 51840 -600 -1.14 -10.12 HG COPPER DEC3 3.26 -0.03 -0.93 -99.11 LME Alum 1860.50 -4.50 -0.24 -10.16 SHFE AL FUT JAN4 14325 10 +0.07 -6.65 LME Zinc 1884.50 -0.50 -0.03 -8.67 SHFE ZN FUT JAN4 14785 -760 -4.89 -4.89 LME Nickel 13840.00 -60.00 -0.43 -19.32 LME Lead 2086.00 -7.00 -0.33 -10.85 SHFE PB FUT 14095.00 50.00 +0.36 -7.57 LME Tin 23450.00 -100.00 -0.42 0.21 LME/Shanghai arb^ -498
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 = 6.1211 Chinese yuan)
($1 = 6.1211 Chinese yuan)
(Reporting by Melanie Burton; Editing by Richard Pullin)