Benchmark copper on the London Metal Exchange gained 1.25 percent to trade at $8,550.75 a tonne at 1525 GMT, from $8,445 a tonne at the close on Monday, Earlier, the metal used in power and construction hit a session peak of $8,560.25, its highest since March 5. Copper has been largely range-bound since late February, but has gained 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, bolstering hopes that Europe's largest economy is back on a stable footing. US retail sales recorded their largest gain in five months in February as Americans snapped up motor vehicles and bought a range of goods even as they paid more for gasoline, government data showed. But copper could struggle to gain traction 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?" Investors awaited a US Federal Reserve meeting later in the day, which should provide more clues on the monetary policy of the world's largest economy. Economists polled by Reuters said the Fed would launch a stimulus programme despite recent signs of an improving labor market, but cautioned that the scale might be smaller than initially expected. IS CHINA COMING BACK? 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. China also posted its largest trade deficit in at least a decade in February, sparking concern over its growth prospects, though the country continued to import near record amounts of copper in that month. 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. Germany's Aurubis, Europe's biggest copper producer, also expressed some optimism on the European copper demand situation. In other metals, aluminium rose 0.72 percent to $2,244.50 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 was up 1.13 percent at $23,741 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 galvanizing, climbed up 0.91 percent at $2,110 a tonne from $2,091 at Monday's close, lead rose 1.08 percent at $2,161 a tonne from $2,138 and nickel climbed 0.95 percent to $19,443 from $19,260.