LONDON: Copper fell on Tuesday as risk aversion in wider markets related to tensions over North Korea hit base metals, with lead also sliding to a three-month low and zinc down more than 1 percent.
But aluminium rose as traders returned from a four-day Easter break to news of upcoming capacity cuts in China.
"There is still some uncertainty in the market about geopolitical issues, and there is some risk aversion at this stage," ABN Amro analyst Casper Burgering said.
"A small deficit (in copper) is expected this year, and demand is very good... but that hasn't benefited the metal."
Aluminium rose after Shanghai aluminium futures hit a near four-year high on Monday.
"There is still a lot of oversupply in aluminium, and a lot of stocks, and that oversupply has depressed prices for quite some time," Burgering said. "Now you see there are initiatives to cut capacity in China, and prices are moving (up)."
PRICES: London Metal Exchange copper was down 0.7 percent in official midday trading at $5,650 a tonne, as the LME resumed trading after the Easter weekend.
FINANCIAL MARKETS: European shares fell as tensions over North Korea and the coming weekend's French election kept investors on edge. UK stocks fell after British Prime Minister Theresa May surprised markets by calling an early parliamentary election for June 8.
NORTH KOREA: US Vice President Mike Pence reassured Japan of American commitment to reining in North Korea's nuclear and missile ambitions on Tuesday, after warning that US strikes in Syria and Afghanistan showed the strength of its resolve.
INDONESIA EXPORTS: Freeport McMoRan Inc has received a preliminary approval to resume copper concentrate exports from its Indonesian unit and is now in the process of obtaining an export permit, a company spokesman said.
ALUMINIUM CAPACITY: Three new aluminium projects with a capacity of 2 million tonnes have been halted in Xinjiang in western China for violating rules aimed at curbing capacity, state-owned China Securities Times reported on Sunday.
ALUMINIUM: LME aluminium was untraded in official rings, and was last bid up 0.9 percent at $1,928 a tonne.
TECHNICALS: LME aluminium may drop into a range of $1,914-$1,930 a tonne to fill a common gap forming on Tuesday, Reuters technical analyst Wang Tao said. LME copper may test support at $5,689 per tonne, a break below which could spark a retreat to the next support at $5,629.
SPEC POSITIONING: Hedge funds and other money managers increased their net long positions in COMEX copper, US Commodity Futures Trading Commission data showed Friday.
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