News: RIO METALS-London copper drifts as U.S. manufacturing data provides buoyancy

• Coming Up: Germany Industrial output Oct at 0700 GMT

(Adds comment, detail, updates prices)

London copper was treading water on Wednesday, buoyed by signs that global manufacturing activity will return to a healthier footing next year.

New orders for U.S. factory goods recorded their biggest increase in nearly 1-1/2 years in October, further evidence that the manufacturing sector is gradually recovering after a prolonged downturn.

Commodities have also found support from expectations that the dollar will weaken under President Trump, said Jonathan Barrett, chief investment officer at Sydney's Ayers Alliance.

"It's about how the Trump factor will affect dollar policy. It does come down to, how do we make America great? The best way is to enable us to export to every corner of the world, and you can't do that with the dollar at historic highs," he said.

On copper fundamentals, Barrett noted that a few reports are showing a supply deficit emerging in 2020, making current prices still look cheap.

Three-month copper on the London Metal Exchange CMCU3 edged down by 0.4 percent to $5,864.50 a tonne by 0322 GMT. Prices have traded in a $5600-$6045 range since late November, peaking last week at $6045.50 a tonne, highest since mid-2015. Copper prices surged 20 percent in November.

Shanghai Futures Exchange copper SCFcv1 also eased by 0.6 percent to 47,680 yuan ($6,921) a tonne.

A flood of data from China in coming weeks is expected to show the economy growing at a steady pace in November, with inflation quickening and credit expanding at a faster pace despite concerns about rising debt, a Reuters poll showed.

The copper market will go into deficit by 2020, just when Rio Tinto's (RIO) extension to the Oyu Tolgoi mine in Mongolia comes onstream, the company said on Tuesday.

Reflecting a pick up in copper demand, LME stocks have fallen to around 230,000 tonnes, the lowest since August, and down around 40 percent since late September. MCUSTX-TOTAL

Meanwhile, investor bets that copper will outperform next year have grown. The total net long position of funds trading copper on the LME rose 6.2 percent to a record high of 78,054 lots last Friday from a net long position of 73,520 lots the previous week, the exchange's Commitments of Traders Report (COTR) showed on Tuesday.

PRICES

	Three month LME copper		  CMCU3  
	Most active ShFE copper		 SCFcv1  
	Three month LME aluminium	   CMAL3  
	Most active ShFE aluminium	  SAFcv1  
	Three month LME zinc			CMZN3  
	Most active ShFE zinc		   SZNcv1  
	Three month LME lead			CMPB3  
	Most active ShFE lead		   SPBcv1  
	Three month LME nickel		  CMNI3 
	Most active ShFE nickel		 SNIcv1   
	Three month LME tin			 CMSN3  
	Most active ShFE tin			SSNcv1		  
	 
	($1 = 6.8893 Chinese yuan)