LONDON, Dec 8 (Reuters) - Copper prices ran out of steam on Wednesday after two days of gains as concern 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 U.S. dollar since 2018, making dollar-priced metals cheaper for Chinese buyers.
But U.S. and European markets and oil prices stalled after two days of gains.
Benchmark copper on the London Metal Exchange (LME) was down 0.4% at $9,560 a tonne in official trading.
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".
CENTRAL BANKS: Investors are wary that major cental banks will signal tighter policy in meetings this month.
OMICRON: A study in South Africa suggested the Pfizer vaccine may only partly protect against the Omicron variant, but Pfizer said a three-shot course was able to neutralise it in a laboratory test and they could deliver an upgraded vaccine in March 2022 if needed.
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 1.1% at $3,262, nickel gained 0.3% to $20,250, lead rose 1.8% to $2,225 and tin was up 0.3% at $39,050.
Reporting by Peter Hobson Additional reporting by Eileen Soreng Editing by David Evans and Edmund Blair
Source: Reuters