The base metals were all in positive territory on Friday. Copper started up in the pre-dawn hours and never quit, only just coming off its intraday high late and finishing at $1.5998/lb., up more than 11 cents.

Nickel rose in the pre-dawn hours but then traded flat through the day, closing at $5.2277/lb., up nearly 16 cents. Zinc declined until mid-morning, but caught fire from there, ending near its intraday high at $0.5244/lb., up 2 cents. Aluminum was another steady daylong gainer, adding more than a penny and three-quarters, to $0.6428/lb., while lead joined the party, also tacking on a penny and three-quarters, to $0.5298/lb.

Copper led the sector higher yesterday, soaring as traders shrugged off the abysmal jobs data and glommed instead onto the hope that the $900 billion stimulus package, which seemed assured of Senate passage, will help revive manufacturing, and thus demand for the metal.

COMEX copper also tracked the fourth straight day of gains in Shanghai copper, as investors have turned optimistic that China, the world’s biggest consumer, could soon see an economic recovery. Shanghai copper traded limit up.

“Metals may be discounting an imminent passage of the stimulus bill by the Senate,” wrote Edward Meir, of MF Global (NYSE:MF). “Perceptions are jelling that copper imports will remain strong” this month in China as government spending there ramps up.

China’s economic plan will boost copper demand 6.2% this year, according to a BNP Paribas forecast.

Nevertheless, none of this translated into diminishing stockpiles. Copper inventories monitored by the LME were up again yesterday, adding 2,025 metric tons, to 504,625 tons.

But as one market watcher put it: “For six months last year, no matter how bullish something was, investors read it in a pessimistic way … Since the start of the year, it’s turned the other way, and now people are seeing the glass half full rather than half empty.”

And in Mongolia, the Minister of Minerals and Energy reaffirmed that the government and the developers of the long-delayed Oyu Tolgoi project are firm on an agreement giving the government only a 34% stake in the massive copper-gold find.

Opposition party leaders have in the past sought a 50% or higher percentage of ownership in the project, but the new Mongolian government is standing by the 34% number negotiated by the previous government.

Source: Base Metals Rally