By Chanyaporn Chanjaroen Nov. 24 (Bloomberg) -- Copper posted its biggest daily gain in two weeks in London, reversing an earlier drop, on anticipation a second Chinese stimulus package may help the world's largest consumer of all industrial metals sustain economic growth that boosted demand. The National Development and Reform Commission, the nation's top economic planning agency, is proposing income-tax cuts, salary increases and larger housing subsidies, Chinese media reported yesterday. The nation earlier this month said it would spend $586 billion through 2010 to support its economy. ``Any spending that comes through should support the economy,'' said Michael Widmer, a metals analyst at BNP Paribas SA in London. ``The market has been driven mostly by sentiment.'' Copper for delivery in three months gained as much as 7.6 percent to $3,810 a metric ton on the London Metal Exchange, the largest intraday gain since Nov. 10. The contract was at $3,753 a ton as of 12:50 p.m. and ended 7.3 percent lower last week. China accounts for about 24 percent of world copper demand and 30 percent of zinc, according to CommerzBank AG analyst Eugen Weinberg. Copper has lost 44 percent this year as imports into the Asian nation dropped 13 percent in the first 10 months from a year earlier, totaling 1.1 million tons, according to revised customs data. LME-traded metals also rallied as the MSCI World Index, an equity index, advanced 12.46 points, or 1.6 percent, to 807.30 as of 12:51 p.m. London time. The gains came after Citigroup Inc. received $306 billion of U.S. government guarantees for troubled mortgages and toxic assets, averting a breakup or sale. Gold and oil jumped. Main Driver The global financial crisis will extend into 2009, when China's metal demand may start to rebound, said Rio Tinto Group Chairman Paul Skinner. ``China will remain the main driver of mineral demand,'' Skinner said today at a presentation in Melbourne. ``I do not think that what we are seeing, in terms of this downturn, is the beginning of something very deep.'' Copper production exceeded demand by 26,800 tons this year through September, the World Bureau of Metal Statistics said Nov. 19. LME-monitored copper stockpiles added 1,275 tons, or 0.5 percent, to 284,400 tons, taking this year's increase to 44 percent and reflecting demand weakness. Sterlite Industries (India) Ltd. expects to lose 23,000 tons of copper production for a month after damage to a cooling tower shut its Tuticorin smelter, the nation's biggest, said a company executive. The plant has a capacity to produce 400,000 tons of copper annually. Lower Output Norddeutsche Affinerie AG and KGHM Polska Miedz SA, both top European copper producers, last week said they would reduce output as consumption weakens. ``The main thing for copper is to look for further cutbacks as we haven't seen much in the metal as in zinc and nickel,'' said Stephen Briggs, a metals analyst at RBS Global Banking and Markets in London. ``We are not going to see any meaningful improvement in demand soon.'' Aluminum's 25 percent loss this year, after a 14 percent drop in 2007, prompted Rio Tinto to cut output at its Lynemouth smelter in northeast England by a third. The plant produced 44,000 tons in the third quarter. Among other LME-traded metals, nickel increased $600, or 6 percent, to $10,600 a ton, lead added $48, or 4 percent to $1,230 a ton and zinc advanced $65, or 5.5 percent, to $1,240 a ton. Aluminum increased $76, or 4.3 percent, to $1,826 a ton and tin gained $495 to $12,000 a ton. To contact the reporter on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net

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