METALS-Copper climbs for 2nd day, but eyes worst month since May

* Antofagasta Q3 copper output up nearly 9 percent

* Asia traders see selling into copper rallies

* Metals market eyes China official PMI on Thursday

* Coming Up: Germany retail sales for Sep ; 0700 GMT

(Adds detail, updates prices) SINGAPORE, Oct 31 (Reuters) - London copper climbed for a second session on Wednesday, pushing further away from two-month lows as risk appetite picked up, but the industrial metal is heading for its weakest month since May as demand growth from top consumer China slows. The metal's near-term outlook has also been clouded by event risks that have deterred consumers from large-scale orders, such as the U.S. presidential election on Nov. 6 and China's leadership transition during a meeting that starts on Nov. 8. Uncertainty has also been heightened by the super storm Sandy's impact on the U.S. East Coast. ``China's rebalancing strategy isn't clear, that's holding investors back a bit and what is happening in the euro zone hasn't gone away,'' said Thomas Lam, chief economist at DMG & Partners Securities in Singapore. ``One of the key worries related to the U.S. elections is the link to all of the tax provisions that are set to expire at the end of the year ... We could see a fiscal drag of between 3.5 to 4 percent of U.S. GDP - that's huge,'' he added. Three-month copper on the London Metal Exchange climbed 0.94 percent to $7,792.25 a tonne by 0716 GMT, building on small gains from the previous session after prices plumbed two-month lows of $7,670 this week. LME copper is down more than 5 percent in October, its steepest drop since falling nearly 12 percent in May. The most-traded February copper contract on the Shanghai Futures Exchange rose 0.67 percent to close at 56,860 yuan ($9,100) a tonne. European stock index futures signalled a mixed open on Wednesday as disappointing earnings from ArcelorMittal ISPA.AS and Anheuser-Busch InBev ABI.BR rekindled worries over the outlook for corporate profits. Asian shares rose and the yen was pressured on Wednesday, as risk appetite recovered slightly after European equities and the euro firmed overnight while U.S. financial markets looked set to resume trading after the passage of the powerful storm.

ArcelorMittal ISPA.AS, the world's largest steelmaker, said it would slash its annual dividend as it focused on cutting debt after slipping into a net loss in the third quarter. Its South African unit posted a third-quarter headline loss on Wednesday and expects an even worse fourth quarter due to lower domestic demand and production losses.

In the United States, millions of people were left reeling in the aftermath of Hurricane Sandy. In Europe, euro zone finance ministers will hold a conference call on Wednesday to discuss progress in negotiations of the revised Greek bailout but are not expected to make any decisions yet, two euro zone officials said on Tuesday. ``Market sentiment seem(s) to have stabilized tentatively with oil and industrial metals prices consolidating,'' Credit Suisse said in a note. ``The next few days will be important as leading economic indicators are due in China, the United States and Europe. Further signs of stabilizing economic activity could help commodity prices to regain some lost ground.'' China's official manufacturing gauge is due for release on Thursday, while a monthly US jobs report for October is scheduled for release on Friday.

LIGHT APPETITE Traders in Asia said copper was stuck in a range, day trading on technical levels between the 90- (7804) and 100- (7768) day moving averages, with rallies likely to be lightly sold in Asia. ``There is not much conviction in China with the discount from paper to physical (prices) remaining large. Still, Chinese are reluctant to sell aggressively for now,'' said one trader based in Shanghai. China's appetite for copper imports may fall next year as domestic production of refined copper rises, an analyst at state-backed research firm Antaike said this week.

China accounted for about 40 percent of refined copper demand last year, or about 8 million tonnes, and imports about 3 million tonnes of copper a year. Consumption of refined copper in China will rise 5.5 percent to about 8.1 million tonnes next year as the economy picks up in the world's top consumer of the metal, the analyst said. Meanwhile, supply outside China is also set to rise. Chilean miner Antofagasta < ANTO.L> said third-quarter copper output rose almost 9 percent year-on-year, boosted by improved production at its trouble-hit flagship mine Esperanza and steadier volumes elsewhere.


Base metals prices at 0716 GMT

Metal Last Change Pct Move YTD pct chg LME Cu 7792.25 72.25 +0.94 2.53 SHFE CU FUT FEB3 56860 380 +0.67 2.71 HG COPPER DEC2 353.55 2.95 +0.84 2.90 LME Alum 1922.75 13.75 +0.72 -4.81 SHFE AL FUT JAN3 15340 55 +0.36 -3.19 LME Zinc 1868.00 13.00 +0.70 1.25 SHFE ZN FUT JAN3 14815 135 +0.92 0.14 LME Nickel 16199.00 149.00 +0.93 -13.42 LME Lead 2063.75 21.75 +1.07 1.41 SHFE PB FUT 15290.00 110.00 +0.72 0.03 LME Tin 20060.00 260.00 +1.31 4.48 LME/Shanghai arb^ 53

Shanghai and COMEX contracts show most active months

($1=6.2405 Chinese yuan)

(Reporting by Melanie Burton; Editing by Clarence Fernandez and Robert Birsel)