Wires

UPDATE 2-China Molybdenum triples in Shanghai debut, shares halted on volume surge

* Strong debut due to renewed speculative demand

* Trading halted after turnover breached regulatory limits

* China's economic slowdown shows little sign ofdecelerating

(Adds shares suspension, background)

By Samuel Shen and Kazunori Takada

SHANGHAI, Oct 9 (Reuters) - China Molybdenum Co Ltd, backed by Chinese billionaire Yu Yong, nearlytripled on its Shanghai debut after the company sold stock waybelow the indicative range - triggering a surge in bids andprompting a trading halt.

The market enthusiasm contrasts sharply to the dull responseto the company's public offering late last month that raised aless-than-expected 600 million yuan ($95 million). The Chineseproducer of tungsten and molybdenum sold shares at 3 yuan each,compared with a pre-marketing range of 6.49-8.48 yuan, accordingto Thomson Reuters publication IFR.

Shares in China Molybdenum, already listed in Hong Kong, opened at 8.70 yuan on Tuesday. Trading of the stockwas halted less than an hour-and-a-half into the session asturnover reached 80 percent of the number of shares offered inthe Shanghai offering.

The stock is also underpinned by investor expectations thegovernment would take steps to keep the market stable ahead ofthe Communist Party Congress. At the congress next month,President Hu Jintao will step down as party chief, almostcertainly making way for Vice President Xi Jinping to emerge astop leader.

China Molybdenum, whose stock rose as high as 9.48 yuan onTuesday, had earlier raised less funds than expected because ofthe slack demand for resource-related firms in a slowingeconomy.

"This is the result of excessive pessimistic mood when theIPO price was set," said Zhang Fang, an analyst at DongxingSecurities. "There is now renewed speculative interest inrelatively small IPOs."

The Chinese securities markets regulator CSRC had evenforced China Molybdenum to cut the number of shares in the offerby 63 percent to ease the glut of the new issues hitting themarket, IFR reported last month.

The Shanghai Composite Index is down 3.8 percent sofar this year, after falling about 22 percent last year. Theindex rose 2 percent as of noon trading.

Dongxing Securities expects China Molybdenum, partly ownedby private equity firm Cathay Fortune Corp (CFC) founded bybillionaire Yu, to report a 2 percent net profit drop this yeardue to feeble demand for the metal.

Chinese steel-related firms have been struggling to postprofits this year as slowing economic growth erodes demand fromkey downstream sectors like real estate and automobiles. Theyare also struggling with long-term structural issues includingchronic over capacity.

Executives at Baoshan Iron and Steel , China'sbiggest listed steelmaker, speaking after posting a 53 percentdrop in first-half profit last month, said the firm expected thethird quarter to be the "most difficult" of the year.

Essence Securities led the China Molybdenum deal, with BOCInternational (China) and China Merchants Securities also actingas joint bookrunners, IFR reported.

(Reporting by Lu Jianxin and Samuel Shen; Additional reportingby Elzio Barreto in HONG KONG; Editing by Ryan Woo)

((jianxin.lu@thomsonreuters.com)(86 21 6104 1792)(ReutersMessaging: jianxin.lu.thomsonreuters.com@reuters.net))

Keywords: CHINA MOLYBDENUM/IPO