Copper hit its highest in a week on Tuesday ahead of a US Federal Reserve policy statement, supported by upbeat economic data from Germany and the United States, although gains were kept in check by uncertainty about demand in top consumer China.
Benchmark copper on the London Metal Exchange ended up 1.36 percent to trade at $8,560 a tonne from $8,445 a tonne at the close on Monday, Earlier, the metal used in power and construction hit a session peak of $8,608, its highest since March 5.
Copper has been largely range-bound since late February, but has gained about 12 percent this year amid relief that Europe's debt crisis was being contained, while central banks operated an accommodative monetary policy.
Helping copper earlier was news that the ZEW German economic sentiment index jumped to 22.3 in March, its highest in around 1-1/2 years, as well as news that Greece will receive a total 172.7 billion euros for its funding needs through to 2010.
US retail sales meanwhile recorded their largest gain in five months in February, the latest evidence of improvement in the US economy. But copper could struggle to gain much traction going forward given weak demand growth in China, which accounts for about 40 percent of global consumption.
"The news about Europe has been priced in, the fact that the US recovery is picking up steam has been priced in. I wouldn't be surprised if we get back to $8,000 a tonne in May or June," said INTL FC Stone analyst Ed Meir.
"If China is slowing down, who is going to pick up the slack?" Raising some concern about soft demand in China, inventories of the metal in warehouses monitored by the Shanghai Futures Exchange have steadily increased since the beginning of the year.
Its appetite for imports is evidenced in falling stocks of copper in LME-monitored warehouses, where latest data showed stocks fell by 925 tonnes in a day to 273,000 tonnes, a fresh 2-1/2-year low. The number of cancelled warrants, inventory already earmarked for delivery, at the LME was also a supportive factor, analysts said.
"Given the high level of cancelled warrants at the London Metals Exchange, we would argue that underlying demand is healthier than many market participants believe," Credit Suisse said in a note. In other metals, aluminium ended up 1.30 percent at $2,258 a tonne from $2,229.
Russian billionaire Viktor Vekselberg quit as chairman of the world's largest aluminium producer, UC RUSAL, saying the heavily indebted company was in deep crisis after a long battle with rival oligarch Oleg Deripaska. Tin closed up 3.30 percent at $24,250 a tonne from $23,475. Hundreds of protesters are blocking a 280 tonne shipment of tin ingot belonging to Indonesian producer Koba Tin from leaving the port, an official said on Tuesday, due to a dispute over payments to contractors.
Zinc, used in galvanising, closed up 0.91 percent at $2,110 a tonne from $2,091 at Monday's close, lead ended up 0.75 percent at $2,154 a tonne from $2,138 and nickel closed up 0.99 percent at $19,450 from $19,260.