CORRECTED-METALS-Copper supported by hopes for end to US government shutdown

By Pratima Desai

LONDON, Nov 12 (Reuters) - Copper prices edged higher on Wednesday, supported by optimism over an expected end to the U.S. government shutdown while the market awaited the release of loans data from top consumer China to gauge demand prospects.

Benchmark copper CMCU3 on the London Metal Exchange had gained 0.9% to $10,924 a metric ton by 1701 GMT. It hit a record high of $11,200 last month on mine supply shortages caused by disruptions including an accident in Indonesia.

The U.S. House of Representatives is due to vote on Wednesday on a compromise that would restore funding to government agencies and end a shutdown that started on October 1.

Traders said the expected return of U.S. economic data, which should help investors and the Federal Reserve to judge the state of the U.S. economy, had supported prices this week.

Fed decisions on interest rates would determine the direction of the U.S. dollar, a weakening of which makes dollar-priced metals cheaper for holders of other currencies.

However, expectations of weak bank lending in China was weighing on sentiment, as were forecasts of a drop in total social financing, which analysts study to assess metals demand.

Elsewhere, zinc stocks in LME-registered warehouses are near their lowest since February 2023 at 35,875 tons. MZNSTX-TOTAL.

Low stocks have created a hefty premium for the cash zinc contract over the three-month forward CMZN0-3, which would normally attract metal to the exchange. That has failed to materialise this time because of shortages on the physical market.

Zinc stocks in warehouses monitored by the Shanghai Futures Exchange ZN-STX-SGH have also started to slide. At 100,208 tons, they have dropped 8% over the past couple of weeks.

Three-month zinc CMZN3 was up 0.3% at $3,076 a ton.

Analysts say China's rising zinc concentrate imports and metal production should help to ease the tight market but note that this will take time because so much global capacity has been suspended because of high power costs.

Aluminium CMAL3 rose 0.6% to $2,892 a ton, tin CMSN3 added 2.2% to $37,415 and nickel CMNI3 was flat at $15,055.

Lead CMPB3 rose 1.5% to $2,095 a ton, having earlier touched an eight-month high of $2,097. LME data shows a large long holding of lead futures due to be settled or rolled over 0#LME-FBR next week.