Base metals are trending higher today... Copper, Lead, Nickel, Zinc... all green. And each metal is showing signs of bottoming out after nine months of falling prices. In fact, most base metals have been trading range-bound (meaning practically flat) since the start of 2009. Copper is actually starting to trend higher. Copper is considered an economic canary... When prices fall, economies are in for a slump. When prices rise, economies tend to become stronger. Why? It all has to do with industrial growth. When economies are strong, they build things like factories, power plants, schools, and other infrastructure. That takes a lot of copper and other base metals. Which is why, when China announced it could provide another stimulus package - like the $586 billion it issued last year to sustain industrial growth, commodity prices and commodity companies climbed in value. But just yesterday, China announced it would not boost stimulus spending unless the economy showed it was necessary, and right now, China's economy seems to be recovering slightly. Exports are growing again, and China will continue to grow its GDP this year. Right now, markets are reacting negatively to this news, but here's the thing. I don't think they priced in the original stimulus package. Meaning, when China first announced its $586 billion plan, back on November 10, 2008, markets barely batted an eyelash. Brazil's Bovespa opened at 36,672 and closed at 36,776. By December 1, it had traded down to 34,771. Australia's All Ordinaries Index opened at 4,020.5 and closed at 4,060. By December 1, it had traded down to 3,619. Now, the other half of the equation is that China's stimulus has not been spent yet. Here's the breakdown of where China will put the money, as reported by the Associated Press:

The government will spend 370 billion yuan ($54 billion) on roads, power supplies and other rural infrastructure; 1.5 trillion yuan ($219 billion) on highways and railways and 150 billion yuan ($22 billion) on education, health and cultural facilities such as museums, according to Zhang. Some 1 trillion yuan ($145 billion) will go into reconstruction efforts for last year's devastating earthquake.

As you can see, most of this money will be spent on infrastructure, and that will boost demand for base metals like copper and nickel. Wenesday morning, when talk of more stimulus cash was still on the table, major mining companies were skyrocketing: Rio Tinto (RTP:NYSE) was up 11.47% Companhia Vale (RIO:NYSE) was up 11.08% BHP Billiton (BHP:NYSE) was up 9.07% Here's what these three are doing so far today, now that we know China will not add to the stimulus pot: Rio Tinto (RTP:NYSE) up 5.59% Companhia Vale (RIO:NYSE) down 0.53% BHP Billiton (BHP:NYSE) up 3.94% Hardly devastating news, eh?