LONDON: Copper rose on Monday in line with most other base metals, responding to centrist candidate Emmanuel Macron's victory in the first round of the French elections which boosted appetite for cyclical assets across financial markets.
Sunday's vote, which could pave the way for pro-EU Macron to beat right-wing rival Marine Le Pen in a deciding vote next month, delivered the outcome broadly favoured by investors. The euro also leapt.
"There's a bit of a risk-on mood after the outcome of the first round of the presidential election in France, which has lent some buoyancy to the prices," Commerzbank analyst Daniel Briesemann said.
Nonetheless, copper remains vulnerable to a further correction, he said, after an unwinding of the post-US election reflation trade pulled it back from its first-quarter peaks.
"Prices went too high, and there was and still is correction potential," he said. "To me, this is nothing more than a short plateau in the downtrend. I'm convinced that we'll see copper below $5,500 in a relatively short period of time."
PRICES: Three-month copper on the London Metal Exchange was up 0.5 percent at $5,653 a tonne by 0955 GMT.
FINANCIAL MARKETS: The euro hit five-month highs and European shares rallied 2 pct after centrist Macron won through in the first round of the French election, reducing the risk of a Brexit-like shock.
ANGLO AMERICAN: Anglo American reported a 9 percent rise in overall production for the first quarter of 2017 compared with 2016, but copper output fell 3 percent due to poorer grades and a temporary suspension at the El Soldado mine in Chile.
KOREA: North Korea said on Sunday it was ready to sink a US aircraft carrier to demonstrate its military might, in the latest sign of rising tension as US President Donald Trump prepared to call the leaders of China and Japan.
MARKET SURPLUS: The global refined copper market had a 51,000 tonne surplus in January, up from a 44,000 tonne surplus in January last year, the International Copper Study Group (ICSG) said.
TECHNICALS: LME copper may fall to $5,592 a tonne following its failure to break resistance at $5,689, Reuters technical analyst Wang Tao said. LME aluminium may test support at $1,931 per tonne, he said.
ALUMINIUM STOCKS: Aluminium stocks in LME-registered warehouses fell another 9,625 tonnes on Friday, exchange data showed, taking them to their lowest since Nov. 2008.
OTHER METALS: LME aluminium was up 0.3 percent at $1,938.50 a tonne. Zinc was up 1.1 percent at $2,611.50 a tonne, while lead was 0.2 percent higher at $2,146. Tin was down 0.2 percent at $19,720 a tonne, and nickel was up 0.2 percent at $9,360.
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