China steel futures jumped and its stock market rallied by the most in eight months on the news.

Shanghai-listed Sany Heavy Industry, Shenzhen-listed Zoomlion and Taiyuan Heavy all surged 10 percent. Japanese construction equipment makers also got a boost, with shares of Komatsu Ltd rising 6.6 percent in Tokyo and Hitachi Construction Machinery Co Ltd up 4.7 percent.

In U.S. trading on Friday, shares of Caterpillar Inc , the world's largest heavy equipment maker, rose 4.1 percent, and shares of rivals Joy Global Inc and CNH Global NV were both up.

Otis Elevator Co, a subsidiary of United Technologies Corp , said it was pleased to hear about China's new infrastructure spending.

" We have a long history of providing our products and services to support China's infrastructure growth, and are sure this latest announcement will add to this," spokeswoman Michele Batty said.

U.S. steelmakers' shares surged, led by U.S. Steel and AK Steel and producers of metallurgical coal which is used in steelmaking, also got a boost.

" It's definitely China," analyst Michelle Applebaum of Steel Market Intelligence, said of the advance in steel stocks. " Any good global news matters, but especially in China."

Investment is a mainstay of China's economic prowess, accounting for 54.2 percent of the country's 9.3 percent expansion in its economy last year.

 

FAST-TRACK SPENDING

To avert a prolonged recession, Beijing launched a 4 trillion yuan ($630 billion) stimulus in 2008/09. But the experience saddled the world's No. 2 economy with a pile of bad debt, forcing China to proceed with care on spending this time.

China has not unveiled any large-scale new government stimulus this year, despite mounting evidence the economy needs more prodding to regather momentum, as policymakers fret that a surge in prices could stoke social unrest at a politically sensitive time.

Instead, most spending increases are a result of fast-tracking infrastructure projects that are already in the pipeline.

Analysts have also urged caution. Ratings agency Standard & Poor's said last month that China could afford to deliver fiscal stimulus, but risked making bad investments.

Still, pressure is building on Beijing to do more. Analysts say China must act soon if it wishes to cut interest rates as inflation looks set to rebound on soaring global grain prices. Indeed, local pork prices have started rising, too.

Gathering price pressures come even as China's economic downturn deepens, forcing Beijing into a policy quandary: hold its fire on monetary policy and risk a sharper cooldown, or lower rates and risk an inflation spike.

Concentrating policymakers' minds, Sunday's data is expected to show that annual factory output growth was the weakest in more then three years in August, according to a Reuters poll, while consumer inflation quickened.

Analysts have steadily cut their 2012 GDP growth forecasts to converge with Beijing's target of 7.5 percent, which would be the worst in at least 13 years. Predictions for a recovery have also been pushed out from the first quarter to the fourth.

For 2012, Goldman Sachs reduced its GDP forecast to 7.6 percent from 7.9 percent. Its forecast for 2013 GDP growth was also trimmed to 8 percent from 8.5 percent earlier.

 

CONSTRUCTION BOOST

The last time China stepped up project approvals was in May, when the Chinese media reported Beijing as saying it may bring forward 2013 investments to support the economy. The total size of investment brought forward in May was not available.

Although the latest approved projects were only announced Wednesday and Thursday, the commission's website showed approvals were made as early as May, and ran through to August. ()

The size and location of projects also mean they likely overlap with spending plans announced by local governments in recent months. At more than 1 trillion yuan, the total cost represents around 2.1 percent of China's economy.

Among projects approved is an expansion of a 172-km (107 miles) rail track across three provinces between Gantang and Wuwei, in western China, for 3.77 billion yuan. The project got the go-ahead in June.

Analysts at Nomura estimated the average construction time for projects at around four years.

Details about how projects would be paid for were sketchy.

There would be a combination of private and corporate investment and government funding, although Ting Lu, an analyst at Bank of America-Merrill Lynch in Hong Kong, said the bulk of financing would come from loans from state-owned banks or bond sales.

But regardless of the sources of funding, the construction work will give distressed businesses some much needed respite.

Foreign and local machinery makers in China, the world's largest construction market, are struggling as the slowdown saps investment growth to 10-year lows. Falling profits have spurred firms to cut production or seek new clients.

Global leader Caterpillar has started exporting Chinese-made machinery to the Middle East and Africa.

Hitachi Construction Machinery, which earns about 16 percent of global sales revenues in China, has slashed production at its excavator-making plant in eastern China.

Shares in China heavyweight Sany Heavy Industry, whose second-quarter profit skidded 28 percent, are still down more than 20 percent this year despite surging 10 percent on Friday.

" People had underestimated the impact of the slowdown on certain sectors, particularly construction machinery," said Arthur Kroeber, managing director of GK Dragonomics in Beijing.

" If you are investing there it has been really painful, the bottom has fallen out."

 

CLE AR $0.084 Resistance..........look set to test $0.089 0.09

Bid	Bid Vol	Ask Vol	Ask
0.083	2,113,000	331,000	0.084
0.082	1,151,000	962,000	0.085
0.081	1,436,000	225,000	0.086
0.080	2,666,000	130,000	0.087
0.079	1,020,000	688,000	0.088
0.078	1,000,000	major resistance1,848,000	0.089
0.077	15,000	major resistance2,201,000	0.090
0.072	60,000	236,000	0.091
0.070	150,000	180,000	0.092
0.062	200,000	20,000	0.094
0	--	308,000	0.095
0	--	133,000	0.100
0	--	60,000	0.104
0	--

 

looking set to test resistance $0.083 again

 

today is moving up higher        $0.083

 

$M of sharebuybck, HG METAL still stuck at record LOW...................i tink the time is ripe for a rebounces in HG METAL price since METAL is important in infrustructure spending as well as rebuilding Old commercial building.......$0.081/ $0.082