LONDON, Oct 29 (Reuters): Copper prices bounced on Tuesday after a Reuters report gave investors renewed hope that top metals consumer China will unleash a large fiscal stimulus package.
Three-month copper on the London Metal Exchange (LME) gained 0.8 per cent to $9,621 per metric ton by 1045 GMT.
LME copper was in the red and spiked higher after Reuters reported that China is considering approving next week the issuance of over 10 trillion yuan ($1.4 trillion) in extra debt in the next few years to revive its fragile economy.
"The market has been waiting for an announcement of the fiscal stimulus and it does look like a big number in the Reuters report," said Amelia Xiao Fu, head of commodity market strategy at Bank of China International.
"That raises hope and helps with market sentiment."
The Reuters report said the package includes 6 trillion yuan to address local government debt risks and 4 trillion for idle land and property purchases.
"I don't think anyone knows the specific numbers yet, but if they announce a large package, it's probably an indication of their determination to really underpin the economy," Fu said.
The most-traded December copper contract on the Shanghai Futures Exchange (SHFE) closed down 0.2 per cent at 76,500 yuan ($10,711.14) a ton before the Reuters report was published.
The report said the package is expected to be approved by China's top legislative body on the last day of a meeting to be held from Nov. 4-8.
Copper demand has been hurt by slowing growth globally, especially in China, although some consumption sectors have been strong, such as solar and wind energy.
Among other metals, LME aluminium gained 1 per cent to $2,673 a ton, zinc added 0.6 per cent at $3,157.50. Nickel was little changed at $16,020, lead eased 1.1 per cent to $2,009 and tin dipped 0.3 per cent to $31,335.
