By Millie Munshi
Nov. 10 (Bloomberg) -- Copper jumped more than 11 percent, leading a rally in commodity prices, after China unveiled a $586 billion plan to sustain 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, the world's biggest metals buyer, 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 14.3 cents, or 8.4 percent, to $1.84 a pound at 9:22 a.m. on the Comex division of the New York Mercantile Exchange, after earlier jumping as high as $1.89.
The Chinese plan will be supportive for 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 in an interview on Bloomberg Television today. ``This is very supportive for commodity markets.''
The Standard & Poor's GSCI Index of 24 raw materials rose as much as 6.1 percent today. Gains were led by energy and metals prices.
On the London Metal Exchange, copper for delivery in three months advanced $300, or 8 percent, to $4,055 a metric ton ($1.84 a pound).
To contact the reporter on this story: Millie Munshi in New York at mmunshi@bloomberg.net.
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