US copper under $2/lb as demand worries resurface

NEW YORK, Oct 30 (Reuters) - U.S. copper futures fell back below the $2.00 a lb mark early Thursday as a surge in overnight inventory levels rekindled demand concerns and helped put the brakes on this week's short-covering rally,

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* Copper for December delivery HGZ8 traded 10.40 cents, or 5 percent, lower at $1.9840 a lb by 10:00 a.m. EDT (1400 GMT) on the New York Mercantile Exchange's COMEX division.

* The morning range from $1.9675 to $2.1720.

* Since hitting a three-year low at $1.6265 on Monday, the benchmark December contract has rallied 33.5 percent.

* COMEX estimated futures volume at 4,343 lots by 9 a.m.

* Copper losses buck weaker tone in the U.S. dollar and strength in global equity markets, one day after the U.S. Federal Reserve cut the benchmark Fed funds rate by 1/2 point, to 1 percent. [nTRT000340]

* The dollar fell for a second straight session on Thursday as risk aversion moderated among investors, giving a boost to equities worldwide.

* In early New York trading, the the euro EUR= was up around 0.6 percent at $1.3030 in volatile trade, pulling further away from a 2-1/2-year low of $1.2329 hit this week on electronic trading platform EBS.

* European shares .FTEU3 rose 2.5 percent, taking a cue from dramatic gains in shares in Asia, where Japan's Nikkei stocks average .N225 surged nearly 10 percent.

* Copper's bearish momentum gathers steam after data showed the U.S. economy shrank 0.3 percent in the third quarter -- its sharpest contraction in seven years. [ID:nN30534111]

* Copper market "unnerved" by hefty build in London warehouse stocks - MF Global analyst Edward Meir.

* London Metal Exchange copper stockpiles surged 6,575 tonnes to 223,875 tonnes on Thursday, bringing a two-day build to nearly 8,500 tonnes.

* Copper's losses seen limited amid growing signs of supply tightness - analysts.

* Chile's copper output tumbled 10.3 percent in September as the world's biggest copper producer churned out 429,309 tonnes of the red metal - the National Statistics Institute (INE).

* Chile's Escondida, the world's largest copper mine, produced 997,000 tonnes of copper in concentrates and cathodes in the first nine months of the year, 10.4 percent less than in the year-ago period. [ID:nN29284018]

* Kazakh copper producer Kazakhmys (KAZ.L) may cut 2009 copper output slightly. [ID:nLU479707]

* LME copper for three month delivery MCU3=LX jumped to a one-week high at $4,820 a tonne in early business. It was last at $4,405, down $250 from Wednesday's closing level. (Reporting by Chris Kelly; Editing by Christian Wiessner)