European Markets

Aluminium dips on Omicron fears, but low inventories cushion fall

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Dec 2 (Reuters) - Aluminium prices in London eased on Thursday, hit by worries over the potential economic impact of the Omicron coronavirus variant, but low inventories cushioned losses.

Three-month aluminium on the London Metal Exchange fell 0.9% to $2,640.50 a tonne by 0704 GMT, while the most-traded January aluminium contract on the Shanghai Futures Exchange closed down 1.2% at 18,765 yuan ($2,944.87) a tonne.

Heavily mutated Omicron is rapidly becoming the dominant variant of the coronavirus in South Africa less than four weeks after it was first detected there, while the United States on Wednesday became the latest country to identify an Omicron case within its borders. read more

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The strain has been found in two dozen countries.

However, aluminium prices were supported by LME inventories of the metal dropping to 893,775 tonnes, the lowest since September 2007 and down 55% from March. Most metals recently left warehouses in Malaysia, exchange data showed.

"It (the LME drawdown) was driven by demand - some moved to China, some moved to the West. All (demand) sections (improved), maybe only except for real estate construction in China," said an aluminium trader.

The premium of LME cash aluminium over the three-month contract rose to $16.30 a tonne, indicating tightness in nearby supplies.

* Top copper producer Codelco's chief executive expects copper prices to fall up to 12% in a year as supply will outpace demand until 2024, when higher consumption from electric vehicles matches with output. read more

* China's Zhejiang Huayou Cobalt (603799.SS) said its Huayue nickel and cobalt high-pressure acid leach project in Indonesia has churned out its first batch of output for use in electric vehicles.

* LME copper eased 0.6% to $9,392 a tonne, nickel dipped 0.2% to $19,905 a tonne and lead fell 0.8% to $2,284 a tonne.

* ShFE copper declined 1.2% to 68,650 yuan a tonne, and nickel dropped 1.1% to 147,390 yuan a tonne.

* For the top stories in metals and other news, click

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Reporting by Mai Nguyen in Hanoi; Editing by Subhranshu Sahu and Devika Syamnath

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