Copper rebounds as coronavirus variant concerns fade

LONDON: Copper prices bounced on Wednesday as worries diminished that the spread of the Omicron coronavirus variant would hit demand for industrial metals.

Three-month copper on the London Metal Exchange had gained 0.7% to $9,511 a tonne by 1520 GMT, having lost 0.6% in November.

A green transformation to electric vehicles and wind turbines plus new infrastructure projects will require more copper even if a spreading COVID-19 pandemic spurs tighter restrictions, said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

“These projects are not going to go away even though we see a dip in growth again or a period of lower mobility,” he said.

“Adding to that, inventory levels are still very low and it does seem like copper is being consumed and leaving these major exchange warehouses, which is another layer of support.”

Metals benefited from investors’ increased risk appetite, which sent stock markets surging, using a dip in prices to bet that the latest COVID-19 variant would not derail the economic recovery, while oil also rallied.

Arbitrage activity with China was supporting LME nickel, Al Munro at broker Marex said in a note. Nickel advanced 0.5% to $20,000 a tonne. Chile’s Senate pushed forward discussion over a controversial bill to increase royalty payments from mining companies that operate in the world’s largest copper producer. The proposed legislation is backed by opposition lawmakers.

The Philippines’ Berong nickel mine, operated by DMCI Holdings Inc’s mining unit, is expected to be fully depleted by the end of this year and will be decommissioned and rehabilitated, the company said.

LME cash aluminium traded at a $14.25-a-tonne premium over the three-month contract, indicating tight nearby supplies, as LME aluminium stocks fell to a 14-year low of 893,775 tonnes.

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LME aluminium rose 0.8% to $2,647 a tonne, zinc gained 1.3% to $3,241, lead added 0.5% to $2,286 and tin edged up 0.3% to $39,150.