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METALS-London metals recover as stock markets rally; options expiry looms

(Changes quote, updates prices) BEIJING, Feb 7 (Reuters) - London base metals on Wednesday recovered some of the ground lost in the previous session as global equities bounced back after days of sharp falls, although Shanghai metals fell across the board. Analysts said metal prices were holding up well given the recent share market volatility, with London copper holding above the $7,000 a tonne mark that has only been breached on three trading days so far this year. "The metals reacted by basically following the global equity markets and also trying to focus in on which strike price level they will settle at for today's declarations," Kingdom Futures CEO Malcolm Freeman wrote in a note. Traders of LME calls and puts, the right to buy or sell a contract at a fixed price later, have to decide whether to exercise their options on the first Wednesday of each month.

FUNDAMENTALS

* LME COPPER: Three-month copper on the LME was up 0.3 percent at $7,100 a tonne by 0702 GMT, partly recovering from a 1.3 percent drop in the previous session. It had gained as much as 1 percent in early trade on Wednesday.

* SHFE COPPER: The most-traded March copper contract on the Shanghai Futures Exchange closed down 0.8 percent at 52,710 yuan ($8,423.49) a tonne.

* OTHER METALS: LME zinc, nickel and aluminium gave up early gains of 1 percent to 2 percent to trade half a percent to 1 percent higher; lead was the laggard, declining 0.9 percent.

* FREEPORT: Freeport-McMoRan Inc reinstated its cash dividend on Tuesday, three years after suspending it, reflecting a stronger financial position, improved market conditions and a positive outlook for cash generation.

* ZIMBABWE: Zimbabwe has the potential to be a leading producer of lithium, which has so far attracted more interest than any other of its minerals, Zimbabwe's new Minister of Mines and Mining Development Winston Chitando said on Tuesday.

* MARUBENI: Japanese trading house Marubeni Corp on Tuesday posted a 53 percent jump in April-December net profit and lifted its full-year forecast by 18 percent, boosted by higher copper and coal price.

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MARKETS NEWS

* Asian share markets took back some of their earlier gains on Wednesday as investors were unnerved by a drop in U.S. stock futures, underscoring lingering anxiety following steep losses in global equities over the past few days. PRICES

BASE METALS PRICES 0701 GMT Three month LME copper 7108 Most active ShFE copper 52710 Three month LME aluminium 2190.5 Most active ShFE aluminium 14200 Three month LME zinc 3480 Most active ShFE zinc 26475 Three month LME lead 2597 Most active ShFE lead 19200 Three month LME nickel 13545 Most active ShFE nickel 102260 Three month LME tin 21810 Most active ShFE tin 151230

BASE METALS ARBITRAGE

LME/SHFE COPPER LMESHFCUc3 1037.6 LME/SHFE ALUMINIUM LMESHFALc3 -1632.97 LME/SHFE ZINC LMESHFZNc3 631.18 LME/SHFE LEAD LMESHFPBc3 -427.5 LME/SHFE NICKEL LMESHFNIc3 1683.85

($1 = 6.2575 Chinese yuan)

(Reporting by Tom Daly; Editing by Subhranshu Sahu and Richard Pullin)