France’s choice of pro-EU candidate lifts copper

LONDON — Copper rose on Monday as centrist candidate Emmanuel Macron’s strong performance in the first round of the French presidential election boosted appetite for cyclical assets, sending stock markets sharply higher.

Sunday’s vote, which could pave the way for pro-European Union Macron to beat far-right rival Marine Le Pen in a deciding vote next month, delivered the outcome broadly favored 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,” said Commerzbank analyst Daniel Briesemann.

Nonetheless, copper remains vulnerable to a further correction, he said, after an unwinding of the post-US election reflation trade pulled it back from firstquarter 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.”

Three-month copper on the London Metal Exchange (LME) closed at $5,656 a ton, up 0.60%.

The euro hit five-month highs and European shares rallied 2% after Mr. Macron won through in the first round of the French election, reducing the risk of a Brexit-like shock.

Mining company Anglo American reported a 9% rise in overall production for the first quarter of 2017 compared with 2016, but copper output fell 3% because of poorer grades and a temporary suspension at the El Soldado mine in Chile.

North Korea said on Sunday that 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 J. Trump prepared to call the leaders of China and Japan.

The global refined copper market had a 51,000 ton surplus in January, up from 44,000 tons in January last year, the International Copper Study Group said.

LME copper could fall to $ 5,592 a ton after its failure to break resistance at $5,689, while LME aluminum could test support at $1,931, Reuters technical analyst Wang Tao said.

Among other industrial metals, LME aluminum closed with a 0.70% gain at $1,946 a ton, while zinc finished 0.80% up at $2,604 and lead 0.90% higher at $2,162. Tin closed 1.10% down at $19,650, with nickel retreating by 0.90% to $9,260. —