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Growing car sales to boost lead boom

Demand for lead is expected to jump by more than 100,000 tonnes over the next 4 yrs to feed booming automakers.

autos Updated: Jan 04, 2006 17:56 IST
Reuters
Reuters
PTI

Demand for lead in India, which imports a fifth of the metal it consumes annually, is expected to jump by more than 100,000 tonnes over the next four years to feed booming automakers, an industry official said on Wednesday.

Automobile batteries account for about two-thirds of the lead sales in India. Passenger vehicle sales are expected to remain robust this year after topping one million units for the second year in a row in 2005.

"The demand for lead is outstripping supply. The way the automobile sector is performing in India, it is sure to keep rising," L Pugazhenthy, executive director of the India Lead Zinc Development Association, said in an interview.

He forecast lead consumption would grow to 280,000 tonnes in 2006 from about 250,000 tonnes last year.

Pugazhenthy said with domestic availability of lead at about 200,000 tonnes, India had imported about 50,000 tonnes from Australia, China and Iran last year to bridge the shortfall.

He said while 16,000 tonnes were supplied by Hindustan Zinc Ltd, India's sole primary producer of lead, 80,000 tonnes came from secondary producers and nearly 100,000 tonnes were provided by small units.

Hindustan Zinc, which has an annual capacity for about 35,000 tonnes, consumes the remainder of the output. It is set to start a new smelter this year with a fresh capacity to produce about 50,000 tonnes annually.

Strong sales of computers were also boosting demand for lead, Pugazhenthy said.

"Both China and India have emerged as leading markets for consumer goods like cars and computers, which all need batteries," he said. "I think in three to four years, the demand for lead should go up to 350,000 to 400,000 tonnes."

Personal computer sales were set to grow by about 30 per cent and top six million units in 2006, the Manufacturers Association of Information Technology said last week.

Pugazhenthy said demand for lead batteries was expanding 15 per cent annually and most private battery makers were poised to expand capacity.

Lead is also consumed in alloys, pigments and cable sheathing apart from their primary use in batteries.