Reuters reported that Shanghai copper and zinc hit their highest levels in 4 months as hopes that the United States and China will roll out more stimulus measures offset a slight decline in China's August copper imports.

The Shanghai contracts were also catching up with gains in London on Friday when base metals rallied on news of USD 150 billion infrastructure building program by Beijing and on hopes of easing by the Federal Reserve after disappointing US jobs numbers.
The most active December copper contract on the Shanghai Futures Exchange shot up 2.6% to a session high of CNY 58,130 per tonne the highest since early May before edging down to 58,050 by 0407 GMT.

This was despite 2.9% fall in Chinese copper imports in August from July which Great Wall Futures analyst Mr Li Rong attributed to China's still sluggish downstream order books and lower financing demand due to easing credit conditions.

Market players said that base metals were mostly bolstered in the session by expectations of the Fed embarking on another round of bond purchases, also known as QEIII, next week. The chances of this have jumped after disappointing August US employment numbers released on Friday.

A Shanghai based trader with an international firm said that "We are mostly looking forward to the Federal Reserve meeting for announcement of QEIII, which we think will boost commodities more than infrastructure-building programs in China and more policy details from the euro zone. But if the Fed doesn't roll out a QEIII soon, base metals prices are expected to fall."

All eyes are also on Europe this week, where key events include a September 12 ruling by Germany's constitutional court on the new euro zone bailout fund.

Madrid intends to discuss conditions attached to the ECB's bond-buying plan with euro zone finance ministers this week while global lenders will return to Athens to assess Greece's austerity reforms before granting a bailout crucial to keeping the country afloat. A European Union finance ministers meeting is set for September 14th and 15th 2012.

Three month copper on the London Metal Exchange, which already hit a near 4 month high in the prior session, extended gains on Monday by 0.4% to USD 7,998 per tonne. It had earlier hit a session high of USD 8,026 the first time it broke above USD 8,000 since May 14.

Shanghai zinc hit a session high of CNY 15,460 the highest since early May. Shanghai lead rose to a high of CNY 15,910 the loftiest since March. Shanghai aluminum touched CNY 15,785 the highest since mid June.

Also helping to spur stimulus hopes was a media report on Sunday that China would provide subsidies worth USD 2.2 billion to buyers of energy efficient computers and air conditioners in the latest effort to encourage the use of environmentally friendly technology and to stimulate domestic demand, especially after recent weak economic data.

A longer term plan by Beijing to order its dominant electricity distributors to source up to 15% of their power from renewable energy including wind may also boost the construction of more energy facilities and boost metals demand.