By Anna Stablum April 16 (Bloomberg) -- Copper may fall for a second day in London on concern about the outlook for demand in China, the world’s largest consumer, after the government announced measures to cool the real-estate market. China’s cabinet 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. Concern that the Chinese economy may be overheating increased yesterday as figures showed first-quarter gross domestic product rose 11.9 percent. “Over the past few days, we have seen very strong economic data from China,” Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, said by phone. A cooling Chinese market would imply weaker demand, he said, and “imports will probably decline as well, so last but not least, prices would come down more significantly.” Copper for delivery in three months was unchanged at $7,945 a metric ton at 10:09 a.m. on the London Metal Exchange after dropping as much as 0.5 percent. Prices are up 0.3 percent this week. May-delivery copper gained 0.2 cent to $3.6025 a pound on the Comex in New York. The Chinese government acted after a survey showed that residential and commercial real-estate prices in 70 cities climbed 11.7 percent last month from a year earlier, fanning concern that record lending may be creating asset bubbles. The construction industry uses 25 percent of all copper produced, according to the Copper Development Association. Housing Starts A separate report may show that U.S. consumer sentiment rose to the highest level in two years. The Reuters/University of Michigan preliminary consumer sentiment index may have risen to 75 this month, the highest level since January 2008, according to a Bloomberg survey. The figures are scheduled for release at 2:55 p.m. London time Copper futures outstanding, or open interest, rose to a 13- month high on April 14, gaining 0.9 percent to 437,949 contracts. That was the highest since March 5, 2009, the latest data show. Reviving Economies “There is still very high investment demand, with open interest rising significantly for copper,” Commerzbank’s Briesemann said. In addition, “economies around the world seem to be recovering,” he said. Copper fabricator KME Group expects to raise production as much as 18 percent this year after a record slump in 2009. Output will climb to between 510,000 and 516,000 tons of copper and copper-alloy products, Chief Financial Officer Italo Romano said yesterday by phone. Production fell 23 percent last year because of the world recession. “The industrial sector is really recovering in comparison to last year,” Romano said. Demand is improving from areas including cars, electronics, heavy industry and appliances, particularly in northern Europe, he said. Copper stockpiles tracked by the LME fell 0.2 percent to 509,400 tons today, rounding out an eighth successive week of declines. Bookings to remove metal from stockpiles jumped 18 percent, the most in six weeks, to 16,075 tons. Aluminum, Tin Inventories monitored by the Shanghai Futures Exchange rose for a second week, extending a climb to the highest since at least 2003. Stockpiles of the metal jumped 9.6 percent to 185,895 tons. LME aluminum and tin reached the highest intraday prices since September 2008, and nickel rose to a 23-month high. Aluminum for three-month delivery rose 0.4 percent to $2,482 a ton after reaching $2,488, the highest intraday price since Sept. 29, 2008. Tin climbed 0.9 percent to $19,149 a ton, after reaching $19,165, the highest since Sept. 18, 2008. Nickel advanced 0.2 percent to $27,278 a ton after touching $27,400, the highest intraday price since May 9, 2008. World consumption was 111,000 tons in February, exceeding primary nickel production of 107,700 tons, the International Nickel Study Group said yesterday. Lead gained 1.3 percent to $2,370 a ton and zinc rose 1.2 percent to $2,539.50 a ton. --With assistance by Claudia Carpenter in London, Li Xiaowei in Shanghai and Courtney Schlisserman in Washington. Editors: Dan Weeks, Stuart Wallace.

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