Zinc snapped three days of gains on the London Metal Exchange as inventories at almost a three-year high revived speculation of falling demand for the metal used to galvanize steel in cars. Aluminum erased an earlier decline. The LME index of industrial metals climbed 7.1 percent this week through yesterday on speculation government spending on infrastructure such as bridges will spur demand for metals. Zinc inventories in LME warehouses jumped 2,350 metric tons to 348,975 tons today, the most since Feb. 16, 2006. “The car industry has just shut off completely,” said Randy North, a trader at RBC Capital Markets in London. “Once infrastructure projects get underway, both in China and the U.S. that will take a lot of zinc away very quickly.” Zinc for delivery in three months fell $3, or 0.3 percent, to $1,177 a metric ton by 10:40 a.m. local time, after rising 7.6 percent for the first three days this week. The price on Dec. 12 dropped to $1,038 a ton, the lowest since Nov. 2, 2004. Korea Zinc Co., the second-largest smelter, forecast sales may drop as much as 38 percent this year. The metal has fallen 2.6 percent this year, joining aluminum and nickel as decliners on the London Metal Exchange. Copper slid $15 to $3,400 a ton and aluminum rose $2 to $1,441 a ton, after earlier falling $19. Copper had gained 8.2 percent in the past three days and aluminum jumped 6.7 percent. Copper is “still range bound between $3,100 and $3,600 a ton,” North said. “Until it solidly breaks out, it’s hard for me to get terribly excited.”

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