LONDON: Copper prices fell on Wednesday after two days of gains as worries over the impact of the Omicron coronavirus variant blunted the effect of economic stimulus in top consumer China.
Chinese equities rose sharply after a cut in reserve requirements for banks released 1.2 trillion yuan ($188 billion) in long-term liquidity to support the economy.
The yuan, meanwhile, shot to its strongest against the US dollar since 2018, making dollar-priced metals cheaper for Chinese buyers.
But European markets and oil prices trod water.
Benchmark copper on the London Metal Exchange (LME) was down 0.4% at $9,561.50 a tonne at 1220 GMT.
The metal used in power and construction is up more than 20% this year but has traded between around $9,000 and $10,000 since reaching a record high of $10,747.50 in May.
Omicron triggered a sharp reduction in speculative bets on higher prices and with the market lacking direction, investors are cautious, said Saxo Bank strategist Ole Hansen.
But he said low stockpiles, strong Chinese imports and a positive demand outlook meant the market was "skewed to the upside".
Omicron: British drugmaker GSK said its antibody-based COVID-19 therapy was effective against all mutations of Omicron, but a study in South Africa suggested the Pfizer vaccine may only partly protect against the variant.
Positioning: Speculators slashed their net long position in copper on the Comex exchange to the lowest in more than a year.
China: China's copper imports in November rose 24.3% from the October to their highest since March.
Copper Stocks: Inventories in Shanghai Futures Exchange warehouses and Chinese bonded warehouses have fallen rapidly since the summer, pointing to a tight market.
However, copper stocks in LME-registered warehouses have risen from historic lows and premiums for quickly deliverable metal have tumbled, suggesting good availability.
Supply: Peruvian government officials failed to broker a deal to unblock a key distribution corridor used by MMG Ltd's Las Bambas copper mine.
Prices: LME aluminium was down 0.1% at $2,625 a tonne, zinc was up 0.8% at $3,253.50, nickel gained 0.4% to $20,260, lead rose 1.7% to $2,223 and tin was up 0.8% at $39,255.