LONDON: Copper rose on Monday, adding to last week's double-digit percentage gains after infrastructure spending in China, the world's top metals consumer, came in ahead of expectations.
Fixed-asset investment quickened slightly in January-October as the Chinese government stepped up outlays to support growth, official data showed.
Benchmark copper rose 1.5 percent to $5,630 a tonne in official trading rings after recording its best week since 2011 last week with an 11.2 percent gain, buoyed also by promises of infrastructure spending by US President-elect Donald Trump.
"The data shows that infrastructure spending in China is not slowing down yet and I don't think there is any political appetite to reduce it," ETF Securities commodities strategist Nitesh Shah said.
Traders said the rise helped offset weaker Chinese industrial output and retail sales figures, reported by the National Bureau of Statistics. Fixed investment refers to spending on so-called "physical" assets such as machinery, land, vehicles and buildings. Hopes over Trump's plan to fix inner cities and rebuild highways have begun to fade as the market waits for more details on the policy and its impact on metals demand.
"There was a bit of a knee-jerk reaction last week after Trump won. It's rallied a bit too fast, too soon without the fundamentals changing," Shah said. He added that details remained vague on US spending for roads and other construction.
"Even if Trump's plan does happen, the impact on the physical side won't be that big," a trader said. Zinc was bid up 3.3 percent at $2,554 per tonne, near five-year highs hit on Friday. Zinc is a key rust retardant used in steel galvanising. The metal is up about 55 percent in 2016 as supply dwindles. Lead was untraded in official rings but bid up 2.1 percent at $2,156 per tonne after hitting its highest since September 2014.
Aluminum was bid at $1,743.50 after failing to trade in official rings, up 0.5 percent. Tin was bid down 0.7 percent at $21,225 a tonne and nickel was bid at $11,175, barely changed from Friday. Iron ore futures in China climbed to their highest in nearly three years, supported by stronger prices of steel and coking coal.
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