Rising automobile sales to drive base metals prices - Commodity Online

CHINA (Commodity Online): Automobile sales have increased significantly over the period in the emerging markets, which even went on to capture 51 percent of the total automobile sales during the year 2010. The resultant demand for base metals as raw materials for automobile manufacturing makes the case even more appealing.

Almost 8 percent of total copper produced is used in automobile industry. 80 percent of lead is used in batteries, out of which majority is used in automobiles and zinc, used primarily for galvanising, is also a major raw material in automobile manufacturing.

China was among the forerunners that helped achieve this feat, with the country responsible for the sales of more than 17 million units last year. China had clocked 48 percent and 33 percent growth rates during 2008 and 2009 respectively.

Even though automobile sales have declined in the first quarter of 2011, the growth is expected to sustain above 30 percent, said an official of the state owned auto parts maker China Auto Parts & Accessories Corporation (CAPAC).

India has also played an indispensible role and emerged as the fastest growing car market. Car sales were observed to have grown by 30 percent during year 2010-2011.

A report from the research firm JD Power Associates says that by 2015 the growth of light vehicles sales in the emerging markets will reach 60 percent. The report also foresees Brazil, Russia, China and India to produce 55.7 million, or 46 percent, of the total global sales by 2020.

However, more immediate and pressing concerns need to be addressed in emerging economies of inflation and sustaining growth levels for the expected result to pan out.