Copper hit a week high on Tuesday as risk appetite continued to strengthen following centrist Emmanuel Macron's victory in the first round of the French presidential election on Sunday, though gains were capped by worries over demand in China. With opinion polls showing Macron as strong favourite to beat far-right, Eurosceptic candidate Marine Le Pen in the final run-off, investors have pretty much priced out the risk of a Brexit-like political shock.
Also helping copper, the dollar languished near five-month lows versus the euro, making dollar-priced copper cheaper for non-US investors. "Positive sentiment is impacting copper this morning, but we are still bearish, we don't buy into the shortage story. Also, the Chinese economy looks like its reached a cyclical peak ... look at the imports data published by customs," said Julius Baer analyst Carsten Menke.
Three-month copper on the London Metal Exchange ended up 0.9 percent at $5,706 a tonne, having earlier hit its highest in a week at $5,722. China's refined copper imports fell 36.2 percent in March versus a year ago, customs data showed. China consumes about 40 percent of the world's copper. LME copper is biased to fall to $5,592 per tonne, after its failure to break a resistance at $5,689.
Freeport-McMoRan Inc, which resumed copper concentrate exports from Indonesia on Friday, said it will immediately begin negotiations with Jakarta on a long-term license for Grasberg, the world's second-biggest copper mine. World stocks hit record highs amid relief at Macron's victory and as investors turned their attention to US President Donald Trump's promise to announce "a big tax reform and tax reduction" on Wednesday.
Aluminium producer Alcoa Corp raised its forecast for aluminium demand growth in 2017 to 4.5-5 percent, up from 4 percent projected in January. It also sees a "modest" market surplus of 300,000-700,000 tonnes. Riots paralysed a major bauxite mining hub in Guinea, Africa's top producer of the aluminium-making raw material, as residents erected barricades and burned tyres to protest against high pollution and power cuts.
Aluminium closed up 0.9 percent at $1,963 a tonne. Tin ended down 0.1 percent at $19,625, lead closed up 0.4 percent at $2,170, zinc ended up 0.1 percent at $2,605.50 while nickel closed up 0.7 percent at $9,320, having earlier hit its lowest since last June at $9,230.
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