METALS-Industrial metals rise as investor recover some risk appetite

(Updates throughout, adds LONDON dateline)

LONDON, Dec 21 (Reuters) – Industrial metals rose on Tuesday alongside oil prices and stock markets as investors weighing up the impact of the Omicron coronavirus variant on economic growth turned a little more bullish after two days of selling.

Benchmark copper on the London Metal Exchange (LME) was up 0.8% at $9,530 a tonne at 1148 GMT but below last month’s high of $9,920 and May’s all-time peak of $10,747.50.

The metal used in power and construction is still up around 20% in 2021, with low stockpiles and a positive long-term demand outlook likely to keep prices high, said independent analyst Robin Bhar.

“With inventories low, you don’t really have a cushion in case there are any supply problems,” he said, pointing to disruption in Peru and the potential impact of a new government in Chile.

OMICRON: Omicron is multiplying rapidly across Europe, the United States and Asia, raising the risk of economically damaging measures to contain it.

MARKETS: Equities and risk assets rose and the dollar weakened.

INVENTORIES: On-warrant copper stocks in LME-registered warehouses at 80,000 tonnes are up from a historic low of 14,150 tonnes in October but far below recent peaks. <MCUSTX-TOTAL>

Stocks in Shanghai Futures Exchange (ShFE) warehouses, at 34,580 tonnes, are the lowest since 2009, and inventories in Chinese bonded warehouses have plunged. <CU-STX-SGH> <SMM-CUR-BON>

PERU: The road from the Las Bambas copper mine in Peru has been blocked by protestors since Nov. 20.

CHILE: Miners are braced for tighter environmental rules after President-elect Gabriel Boric pledged to oppose a $2.5 billion iron-copper mine approved in August.

DEFICIT: The 24-million-tonne a year copper market saw a 57,000 tonne deficit in September, the International Copper Study Group (ICSG) said.

FORECAST: Japan’s Pan Pacific Copper (PPC) expects copper’s average price to drop to $8,600 a tonne in 2022 from $9,300 this year as additional supply flows from new mines.

FEES: The LME said it will not increase its main trading and clearing fees next year.

OTHER METALS: LME aluminium was up 1.5% at $2,711.50 a tonne, zinc rose 1.7% to $3,411.50, nickel added 1.1% to $19,545, lead gained 0.3% to $2,300.50 and tin was up 0.8% at $38,500.

(Reporting by Peter Hobson Additional reporting by Eileen Soreng in Bengaluru; Editing by Krishna Chandra Eluri)

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