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 Friday.
"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
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
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
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)
