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 of decelerating

(Adds shares suspension, background)

By Samuel Shen and Kazunori Takada

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

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

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

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

China Molybdenum, whose stock rose as high as 9.48 yuan on Tuesday, had earlier raised less funds than expected because of the slack demand for resource-related firms in a slowing economy.

"This is the result of excessive pessimistic mood when the IPO price was set," said Zhang Fang, an analyst at Dongxing Securities. "There is now renewed speculative interest in relatively small IPOs."

The Chinese securities markets regulator CSRC had even forced China Molybdenum to cut the number of shares in the offer by 63 percent to ease the glut of the new issues hitting the market, IFR reported last month.

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

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

Chinese steel-related firms have been struggling to post profits this year as slowing economic growth erodes demand from key downstream sectors like real estate and automobiles. They are also struggling with long-term structural issues including chronic over capacity.

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

Essence Securities led the China Molybdenum deal, with BOC International (China) and China Merchants Securities also acting as joint bookrunners, IFR reported.

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

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