LONDON Copper prices surged to their strongest in 3-1/2 months on Thursday, propelled by hopes of firmer metals demand after China announced fiscal stimulus measures following an easing of monetary policy to boost its sluggish economy.

Three-month copper on the London Metal Exchange (LME) broke through the psychological $10,000 per metric ton level, touching the highest since June 12.

In official open-outcry trading, LME copper gained 1.8% to $9,990 a ton. Chinese leaders on Thursday vowed to deploy “necessary fiscal spending” to meet this year’s economic growth target of roughly 5%, after the country’s central bank on Tuesday unveiled its biggest stimulus since the pandemic, including cuts to key interest rates. Sources told Reuters the new plans included issuing special sovereign bonds worth about 2 trillion yuan ($284.43 billion) this year. Earlier in the session, before China’s latest announcements, copper fell on profit-taking.

“Yesterday some people were unsure whether fiscal stimulus would follow the monetary easing, but it did today so it’s all very positive in terms of supportive measures in China,” said Amelia Xiao Fu, head of commodity market strategy at Bank of China International in London.

“After the Fed rate cut, China has more room to unleash their supportive policies because the RMB (renminbi) has been quite strong.”

The positive sentiment is likely to push copper towards its record high of over $11,100 touched in May, but at that point investors may examine how much the stimulus measures have fed through to stronger physical demand, Fu said.

Nickel was the worst performing LME metal, edging up 0.1% to $16,820 after more arrivals into LME-registered warehouses, highlighting a global surplus. LME nickel stocks have doubled so far this year to 130,080 tons, the highest since November 2021.