* Trade held back ahead of Dec options expiry
* Coming up: Germany industrial output Oct at 0700 GMT (Adds comment, detail; updates prices)
By Melanie Burton
MELBOURNE, Dec 7 (Reuters) - London copper rose on Wednesday, buoyed by signs that global manufacturing activity will return to a firmer footing next year and as metals attracted fresh interest from investors.
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 and as demand signals from China also improve.
Commodities have also found support from expectations the dollar will weaken under Donald Trump’s upcoming U.S. presidency, 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 reversed early losses to trade up 0.9 percent at $5,939 a tonne by 0701 GMT. Prices have traded in a $5,600-$6,045 range since late November, peaking last week at $6,045.50, the highest since mid-2015. Copper prices surged 20 percent last month.
Shanghai Futures Exchange copper climbed 0.8 percent to 48,350 yuan ($7,018) a tonne.
A trader in Shanghai said he did not expect year-end liquidation from local retail investors, who drove up copper prices last month.
China’s retail investors have flocked to metals, given a cooling property market and because many were burned in China’s stockmarket meltdown last year.
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, a Reuters poll showed.
The copper market will go into deficit by 2020, just when Rio Tinto’s 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, the bourse’s Commitments of Traders Report (COTR) showed on Tuesday.
Elsewhere, Indonesia exported 4,892 tonnes of refined tin in November, trade ministry data showed, up 86 percent from the same period last year.
Tin prices have jumped 45 percent so far this year, encouraging Indonesian producers to ramp up output. Tin traded up 0.2 percent at $21,160 a tonne.
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Most active ShFE nickel
Three month LME tin
Most active ShFE tin
$1 = 6.8893 Chinese yuan Reporting by Melanie Burton; Editing by Tom Hogue and Joseph Radford