By Claudia Carpenter Nov. 26 (Bloomberg) -- Copper led gains in London after China, the biggest user of industrial metals, cut interest rates the most in 11 years to ward off an economic slump. The People's Bank of China slashed its one-year lending rate to 5.58 percent from 6.66 percent, less than three weeks after the government unveiled $586 billion in spending on housing and roads to help spur growth. China is the world's largest buyer of copper and aluminum. ``This should encourage lending so that should increase commerce,'' said Randy North, a trader at RBC Capital Markets in London. ``We'll see some of the measures beginning to have an impact in the second quarter.'' Copper for delivery in three months gained $105, or 2.8 percent, to $3,800 a metric ton as of 11:41 a.m. on the London Metal Exchange. Aluminum increased $5 to $1,815 a ton. Copper has tumbled 43 percent this year and aluminum is down 25 percent. China, the biggest contributor to global growth, will expand at the slowest pace in almost two decades next year, the World Bank forecast yesterday. Manufacturing contracted by the most on record in October as property prices fell and recessions in the U.S., Japan and Europe reduced demand for exports. Copper inventories fell 875 tons to 286,350 tons, the first drop since Oct. 21. Stockpiles slid in Italy, the Netherlands, Singapore and South Korea, according to figures from the London Metal Exchange. The stocks are still up 45 percent this year. Inventory Changes Lead inventories fell 125 tons to 40,950 tons, the lowest since Nov. 6, 2007. Stockpiles of lead have dropped 10 percent this year, while aluminum inventories are up 88 percent and zinc stockpiles have more than doubled. The three-month lead contract jumped $21 to $1,211 a ton. ``Lead is the most tightly supplied market on the LME,'' said Johan Gahm, an investor in Stockholm who follows industrial metals. Demand is being buoyed by demand for products such as electric bikes, while supplies are falling because of mine closures in the zinc market. Lead is a byproduct of zinc output. Lead production cuts and delays announced since October equal 4.7 percent of estimated 2008 lead mine output, Gahm said. Zinc gained $30 to $1,280 a ton, nickel added $200 to $10,700 a ton and tin jumped $300 to $13,200 a ton. To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net or ccarpenter2@bloomberg.net

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