(Recasts with updated prices)
LONDON, March 12 (Reuters) - Copper prices gained on Friday as investors were cheered by buoyant U.S. economic data and hoped that planned spending on infrastructure would boost metals demand.
Three-month copper on the London Metal Exchange was up 0.8% to $9,126 a tonne by 1800 GMT, erasing earlier losses.
The contract has surged 47% since the beginning of 2020, hitting a 9-1/2-year high of $9,617 a tonne in February.
Data on Friday showed U.S. producer prices increased strongly in February, while consumer confidence in the economy rose to a one-year high.
And following the passage of sweeping U.S. pandemic relief this week, the administration will next turn to legislation on massive infrastructure investments.
“The stimulus has been cooked into the books already but the next phase is looking for (U.S. President Joe) Biden’s infrastructure plans, and when we get some momentum, that’s another bullish catalyst for the industrial metals,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
“The bullish narrative has not gone away.”
Prices slipped earlier as Chinese anti-pollution measures fuelled worries about reduced demand, while a further rise in bond yields spurred renewed risk-off sentiment.
* Concern about rising copper mine production had also helped to dampen prices. Fitch Solutions said in a note: “We see large, new supply coming online in 2021 and expect minimal disruption from COVID-19 in 2021.”
* The Yangshan copper premium SMM-CUYP-CN fell to $68 a tonne, its lowest since Jan. 15, indicating weaker demand from top consumer China, while inventories have been rising in both LME and ShFE warehouses. MCUSTX-TOTALCU-STX-SGH
* LME three-month aluminium fell 0.2% to $2,173.50 a tonne after LME inventories MALSTX-TOTAL surged by 50% over the past two days to 1.92 million tonnes, the highest since March 2017.
* LME zinc dropped 0.5% to $2,809 a tonne, lead advanced 1.5% to $1,971.50, nickel fell 1.6% to $15,975 and tin shed 1.9% to $25,400.
* For the top stories in metals and other news, click or (Additional reporting by Mai Nguyen; Editing by David Evans and Mark Potter)