Zinc Drops First Day in Three as China Cools Property Market

SHANGHAI, Apr. 16 -- Zinc fell for the first time in three days after China announced measures to cool the real- estate market, stoking concerns that demand may be curbed in the world's largest consumer.

The metal for three-month delivery on the London Metal Exchange declined as much as 1.2 percent to $2,480 a metric ton and traded at $2,490 a ton at 11:14 a.m. Shanghai time. Aluminum and copper also dropped.

China raised minimum mortgage rates and down payment ratios for second homes, saying "more forceful" steps are needed to cool speculation after property prices rose at a record pace in March. Zinc is used to galvanize steel.

The property market measures would "have a significant impact on demand for zinc as well as aluminum" as they are both used extensively in buildings, said Sun Zhiyin, an analyst at Shanghai Dalu Futures Co.

Still, zinc has gained 3.1 percent this week as China reported faster economic growth and the dollar weakened

China's gross domestic product rose 11.9 percent in the three months from a year earlier, the statistics bureau said yesterday, more than the median estimate of 11.7 percent from a Bloomberg News survey of economists.

The dollar has declined 0.6 percent against a basket of six major counterparts this week. A weaker U.S. currency can increase demand for dollar-denominated commodities.

Aluminum slumped 0.6 percent to $2,458 a ton, copper fell 0.3 percent to $7,925 a ton in London and lead dropped 0.4 percent to $2,330 a ton. Nickel climbed as much as 0.6 percent to $27,400 a ton, the highest level since May 9, 2008. Tin rose as much as 1 percent to $19,150 a ton, the highest price since Sept. 18, 2008.