By Millie Munshi Nov. 10 (Bloomberg) -- Copper jumped more than 5 percent after China, the world's largest user of industrial metals, announced a $586 billion plan to support its economy. China, the biggest contributor to global growth, pledged ``fast and heavy-handed investment'' in housing and infrastructure, easing concern that the world economy would sink into recession. Booming demand in China fueled a surge in copper prices for six straight years through 2007. ``The stimulus is really going to help the big-picture demand outlook,'' said Michael K. Smith, president of T&K Futures & Options in Port St. Lucie, Florida. ``The market is looking for anything that is going to help global growth.'' Copper futures for December delivery rose 8.8 cents, or 5.2 percent, to $1.785 a pound at 11:25 a.m. on the Comex division of the New York Mercantile Exchange, after earlier jumping as much as 11 percent to $1.89. The Chinese plan will support base metals more than other commodities because spending on roads, railways and other infrastructure will boost demand, Smith said. Copper is used to make pipe and wire. The plan ``may improve the ability of the global economy to start to perform and pick up a little bit more momentum,'' Sean Mulhearn, the global head of commodities and sales at Standard Chartered Bank in Singapore, said today in an interview on Bloomberg Television. ``This is very supportive for commodity markets.'' The Standard & Poor's GSCI Index of 24 raw materials rose 1.7 percent to 427.455, after earlier climbing as much as 6.1 percent. Gains were led by energy and metals prices. `Short-Lived' Today's gains may be ``short-lived'' because the stimulus plan won't be enough to revive global economic growth and boost commodity demand, said Gijsbert Groenewegen, a fund manager at Gold Arrow Capital Management in New York. ``Every country in the world right now is suffering,'' he said. ``I see this as an opportunity to sell if you are still in these markets. This strength today won't have a lasting effect.'' The International Monetary Fund last week lowered its forecast for global growth next year, projecting contractions in the U.S., Japan and Europe. The world economy will expand at a rate of 2.2 percent, the lender said. That's down from an October projection of 3 percent. Before today, copper had plunged 60 percent since reaching a record $4.2605 a pound on May 5. On the London Metal Exchange, copper for delivery in three months advanced $205, or 5.5 percent, to $3,960 a metric ton ($1.80 a pound). To contact the reporter on this story: Millie Munshi in New York at mmunshi@bloomberg.net.

Source