Copper has built on last week’s double-digit percentage gains after infrastructure spending in top metals consumer China came in ahead of expectations though some analysts say the rally looks overdone.
Zinc and lead have also climbed.
Official Chinese data showed that fixed-asset investment quickened slightly in January-October as the government stepped up spending to support growth.
Benchmark London Metal Exchange copper closed 0.4 per cent higher at $US5,569 a tonne after recording its best week since 2011 with an 11.2 per cent gain, a rally that was also buoyed by US President-elect Donald Trump’s promises of infrastructure spending.
The meteoric rise of copper last week, which was up 20 per cent 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.
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.
Zinc rose 5.5 per cent to $US2,607 per tonne, near to a five-year high hit on Friday. Zinc is a key rust retardant used in steel galvanising.
The metal is up about 55 per cent in 2016 as supply dwindles.
Lead rose four per cent to finish at $US2,195 per tonne, its highest close since September 2014.
Aluminum fell 0.6 per cent to $US1,735 per tonne. Tin slipped 2.6 per cent to $US20,830 a tonne and nickel edged down 0.4 per cent to $US11,260.