Copper slips as risk sentiment sours on Moderna warning

Nov 30 (Reuters) – London copper prices reversed course to fall on Tuesday, as fears that the Omicron coronavirus variant could prove vaccine-resistant knocked global risk sentiment.

Three-month copper on the London Metal Exchange fell 0.5% to $9,530 a tonne by 0800 GMT. The most-traded January copper contract on the Shanghai Futures Exchange dipped 0.6% to 69,450 yuan ($10,900.62) a tonne.

Risk sentiment worldwide weakened after drugmaker Moderna’s (MRNA.O) top boss said COVID-19 vaccines are unlikely to be as effective against the Omicron variant as they have been previously. read more

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“We do tend to see the market respond initially to a development like this because of the uncertainty and the additional risk that is associated with it,” said CRU analyst Craig Lang.

However, copper is likely to hold up unless there are signs of a dramatic escalation in cases that could lead to a slowdown in economic activity and, therefore, the demand for copper, he added.

Copper is often used as a gauge of global economic health due to its widespread application in many sectors.

While on-warrant copper inventories in LME warehouses stood at 64,725 tonnes – their highest since Oct. 11 – it is down nearly 73% from an August high.

The variant “casts a shadow over demand growth in the near future and further complicates the supply chain,” analysts at ING said in a note, adding, imports of blister/anode from Africa to China may experience further delays and could potentially lead to a supply gap of copper raw materials.


* Two Chinese border cities are halting some commodity imports by rail to reduce the risk of COVID-19 infections coming in from other countries. read more

* 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, taking some pressure off a manufacturing sector grappling with soft demand. read more

* LME aluminium was flat at $2,630.5 a tonne, nickel fell 0.7% to $19,985 a tonne and lead traded 0.9% higher at $2,290.

* LME zinc was up 0.1% at $3,202.5 but was headed for its biggest monthly drop since January.

* “The worst of power-related disruption to Chinese refined zinc supply seems to be behind us and fundamentals don’t look great in China at the moment,” JP Morgan said in a note.

* ShFE aluminium edged up 0.2% to 18,905 yuan a tonne, nickel was down 0.4% at 147,790 yuan a tonne, lead eased 0.3% to 15,340 yuan a tonne and zinc ticked 0.1% higher to 22,870 yuan a tonne.

* Tin rose 0.6% to 286260 yuan a tonne and was on track to record its best monthly performance in four.

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($1 = 6.3712 Chinese yuan)

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Reporting by Eileen Soreng in Bengaluru; Editing by Devika Syamnath and Uttaresh.V

Our Standards: The Thomson Reuters Trust Principles.