Shanghai, zinc and lead surged as much as 7 percent while ShFE copper erased some of its earlier gains to trade over 2 percent higher at 49,380 yuan ($7,154)a tonne in volatile trade on Monday as a searing rally in metals gained steam on a softer dollar and inflation expectations.
Investors have ploughed into metals on signs of a global recovery, improving the demand outlook for metals, as well as expectations of higher interest rates. Hard assets are an attractive hedge against inflation because they tend to hold their value as rates rise, cooling gains in other asset classes. Traders said zinc, which is used in steel production, was given a boost by news of a Chinese clampdown on illegal expansions by steel mills and further environmental probes.
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