The price of copper jumped on Wednesday after upbeat industrial activity data from China, consumer of half the world’s industrial metals, provided evidence that Beijing’s stimulus program is finally filtering through to the real economy.

Copper for delivery in May added more than 2% to touch a high of $2.9955 per pound ($6,604 per tonne) on the Comex market in New York. It's the highest level since early July last year.

China's GDP grew at a 6.4% clip in the first quarter compared to last year, handily beating expectations of continued slack in the economy which is growing close to the slowest pace in nearly three decades.

Copper price jumps to 9-month high on red-hot China data

Source: Capital Economics, CEIC

But it was a surge in industrial production that really lit a fire under copper. Official figures showed growth in industrial value-added jumped from 5.3% year-on-year in February to 8.5% in March. Fixed investment, a key driver of commodities demand, accelerated to 6.3% while new construction starts came in 18% higher than March last year.

Lending by the country’s banks hit an all-time record of $870 billion during the first quarter. Capital Economics said in a note that with “credit growth now accelerating and sentiment improving, China’s economy will bottom out before long, if it hasn’t already.”

The research firm HQed in London has developed its own industrial output index for China based on production volumes of key industrial goods (official figures sometimes fall victim to manipulation) and its measure jumped to a five-year high in March.

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