Copper extends rally as China boosts spending on infrastructure

LONDON — Copper built on last week’s double-digit percentage gains on Monday after infrastructure spending in top metals consumer China came in ahead of expectations though some analysts said the rally looked overdone. Zinc and lead also climbed. Off icial Chinese data showed that fixed- asset investment quickened slightly in JanuaryOctober as the government stepped up spending to support growth.

Benchmark copper closed 0.4% higher at $5,569 a ton after recording its best week since 2011 with an 11.2% gain, a rally that was also buoyed by US Presidentelect Donald J. Trump’s promises of infrastructure spending.

The meteoric rise of copper last week, which was up 20% at one point, was not justified by fundamentals and the metal used mostly in power and construction was due to retreat, analysts said.

“The news out of China this morning was broadly positive but not strong enough to spark a renewed rally,” Capital Economics Senior Commodities Economist Caroline Bain said.

“A Trump-related rally in the price is not credible at all. We have to wait until he takes office and see how many of his plans will go through,” she said, adding that copper was due for a pullback as it had risen too fast.

Mr. Trump vowed to boost domestic spending to fix inner cities and rebuild highways and roads, pushing up industrial commodities markets.

“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,” ETF Securities commodities strategist Nitesh Shah said.

Traders said the rise in China’s fixed-asset investment had helped offset weaker industrial output and retail sales figures, reported by the National Bureau of Statistics.

Among other industrial metals, zinc rose by 5.5% to $2,607 per ton, near to a five-year high hit on Friday. Zinc is a key rust retardant used in steel galvanizing. The metal is up about 55% in 2016 as supply dwindles.

Lead rose 4% to finish at $2,195 per ton, its highest close since September 2014. Aluminum fell 0.6% to $ 1,735 per ton. Tin slipped 2.6% to $ 20,830 a ton and nickel edged down 0.4% to $11,260. —