Copper under pressure on Omicron uncertainty
Copper prices came under pressure on Tuesday due to worries about the Omicron coronavirus variant and its impact on demand and growth, but above consensus manufacturing data from top consumer China and low stocks limited the losses.
Benchmark copper on the London Metal Exchange traded down 0.8% at $9,505 a tonne in official rings.
“While the severity of the new variant remains a big uncertainty, it casts a shadow over demand growth in the near future and further complicates the supply chain,” said ING analyst Wenyu Yao.
“For most LME metals, declining stocks continue to provide some support.”
Drugmaker Moderna’s chief executive set off alarm bells with a warning that existing Covid-19 vaccines would be less effective against the Omicron variant than they have been against the Delta variant.
China’s factory activity unexpectedly picked up in November, growing for the first time in three months as raw material prices fell and power rationing abated.
Copper stocks in LME-registered warehouses have been falling since late August and now stand at 76 450 t. Another 10 350 t are due to leave over coming days.
Worries about copper availability on the LME market have for some weeks now created a scramble for nearby delivery and a premium for the cash over the three-month contract.
Stocks of nickel at 114 360 tonnes in LME warehouses are less than half the level seen in late April. Cancelled warrants — metal earmarked for delivery — at 48% indicate a further 55 098 tonnes are due to leave.
The premium for the cash over the three-month at $178 a tonne is near two-year highs.
Three-month nickel was down 0.2% at $20 100 a tonne.
