LONDON, Nov 29 (Reuters) - Copper prices climbed on Monday
as fears about further damage to growth and demand from the
Omicron coronavirus variant were outweighed by low inventories
of the industrial metal.
Benchmark copper on the London Metal Exchange (LME)
was up 1.2% at $9,570 a tonne at 1706 GMT, having lost 3.5% on
"The bullish argument rests on historically low warehouse
inventories," said Neil Welsh, a broker at Britannia Global
Markets. "On the bearish side, we have inflation fears, dollar
strength and COVID concerns."
OMICRON: The new coronavirus variant is likely to spread
internationally, bringing "severe consequences" in some areas,
the World Health Organization (WHO) said.
INVENTORIES: Copper stocks <MCUSTX-TOTAL> in LME-registered
warehouse, at 80,075 tonnes, are about a third of levels
registered in late August.
Cancelled warrants - metal earmarked for delivery - at 19%
suggest another 15,350 tonnes is heading out.
Worries about copper supplies on the LME market and a
scramble for metal has often created a large premium for cash
copper over the three-month contract <CMCU0-3>.
DOLLAR: A stronger U.S. currency makes dollar-denominated
metals more expensive for holders of other currencies, which is
likely to subdue demand.
CHINA: Clues to demand prospects in top consumer China will
come from surveys of purchasing managers over the next few days.
A Reuters survey showed China's factory activity is likely
to have shrunk at a slower pace in November.
ZINC: Falling zinc stocks on the LME <MZNSTX-TOTAL>, down
20% to 161,450 tonnes since April, cancelled warrants at 22% and
large warrant holdings have fuelled a jump in the premium for
cash zinc over the three-month contract.
The premium was last at $128 a tonne while three-month zinc
rose 0.6% to $3,213.
OTHER METALS: Aluminium was up 0.8% at $2,637, lead
gained 0.1% to $2,271, tin advanced 1.6% to
$39,270 and nickel was up 1.3% at $20,165.
"Shipping disruption continues to frustrate efforts to
deliver metal to regions with acute shortages, most notably in
Europe and the U.S., which continue to see strong consumption
despite automotive sector slowdowns," said Tom Mulqueen, analyst
at Amalgamated Metal Trading.
(Reporting by Pratima Desai
Editing by David Goodman)