LONDON: Copper prices tumbled on Thursday as worries about demand in top consumer China resurfaced after the country's housing minister suggested moves were afoot to stabilise the property market, while the firm dollar reinforced negative sentiment.
Benchmark copper on the London Metal Exchange was down 0.8 percent to $5,993 a tonne at 1159 GMT. Earlier it touched $5,960.50, a drop of nearly four percent since hitting a 21-month high at $6,204 on Feb 13.
Traders say a generally higher US currency due to mounting speculation the Federal Reserve would raise US rates at its March meeting was weighing on industrial metals because they are priced in dollars and cost more for holders of other currencies.
"The dollar is one element," a copper trader said. "The other part is China, if they are going to try and cool the property market, it's not good news for demand."
China's Vice Housing Minister Lu Kehua said preparatory work was being done for a nationwide property tax, but did not give details.
In the shorter term however, supply disruptions in Chile and Escondida are expected to support prices, as is stronger manufacturing growth around the world.
"Demand looks like it's going to accelerate over the next three months, the PMIs suggest solid growth and seasonally, metals markets normally see deficits in the second quarter," said Goldman Sachs analyst Max Layton.
"Medium- and long-term loans for corporates, the government and households, so across the spectrum, improved dramatically."
Chinese banks extended 2.03 trillion in net new yuan loans in January, the second-highest monthly tally on record and nearly double the December number.
Aluminium fell 0.1 percent to $1,883 a tonne and zinc slid 1.3 percent to $2,825 a tonne.
Zinc prices are nearly double the levels seen in January 2016 due to deficits arising from mine closures and shutdowns including at major producer Glencore
"The market is tighter. There's definitely a shortage of concentrate," Glencore Chief Executive Ivan Glasenberg said at a briefing.
Glencore has said it would only restart capacity when the time was right. "It's something we're monitoring. There is no particular price target. We will make the decision at the appropriate time."
Lead fell 0.4 percent to $2,267, tin ceded ceded one percent to $19,130 and nickel lost 1.5 percent to $10,650 a tonne.
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