Copper gained in Shanghai, heading for the best week in a month, on speculation that government spending plans in China, the world’s largest user, will revive the economy and boost demand for the industrial metal. The Asian nation started investing its second allocation of funds from its 4 trillion yuan ($580 billion) stimulus package to stoke growth, Xinhua News Agency reported Feb. 3. The government invested 130 billion yuan, its second injection after 100 billion yuan of funds in the fourth quarter of 2008, the agency said. “It’s mainly speculators re-establishing long positions after the Lunar New Year, supported by government measures to support the economy,” Li Jingyuan, an analyst at Haifu Futures Co. said today from Shanghai. Copper for April delivery on the Shanghai Futures Exchange rose as much as 1.8 percent to 27,820 yuan ($4,070) a ton, and traded at 27,770 yuan at 10:30 a.m. Singapore time. The contract is up 7.4 percent for the week, the most since Jan. 9. London Metal Exchange copper was 2.4 percent at $3,410 a ton at the same time, set for the first weekly gain in four weeks. “We’re seeing the return of physical buyers to the spot market, which is supporting sentiment in the futures market,” said Li. “While consumption still isn’t great, the market is gaining some confidence that it will recover by mid year.” Immediate-delivery copper in Changjiang, Shanghai’s biggest cash market, advanced to 32,440 yuan a ton this week, the highest since November 14. Among other LME-traded metals, zinc added 2.3 percent to $1,169 a ton, lead rose 0.9 percent to $1,155 a ton, and nickel gained 0.4 percent to $11,500 a ton. Aluminum was little changed at $1,430 a ton, while tin had not traded as of 10:42 a.m. in Singapore.

Source