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EVs may add spark to base metals

EVs may add spark to base metals
base metals

needed for making electric vehicles (

EVs

) and their batteries and in construction are expected to move up on some tax incentives proposed in the

budget

that are seen giving a boost to affordable housing and electric mobility.

Analysts said the budget announcements are likely to increase demand for copper, lead, zinc and aluminium and Indian producers could take advantage of this.

“Base metal demand will increase subject to EVs manufacturing picking up in India. Also, if the government drive on affordable houses picks up, the demand will increase,” said Shreegopal Kabra, former president of the Indian Electrical & Electronics Manufacturers’ Association.

Real estate is a big consumer of copper apart from electric vehicles, which will also require aluminium, lithium, cobalt, nickel and lead. “We expect both global and domestic economy to revive, and in a year, we can see prices of copper and aluminium see a big jump,” said Kabra.

Anuj Gupta, deputy VP-research, commodities, at Angel Broking, said the fast pace of growth in the global electric vehicles market is set to push down the demand for crude oil but increase that of base metals.


metal-graph

Lithium and cobalt are critical elements in the batteries that power EVs and their demand will increase by over 50 per cent to 550,000 tonnes per year in the next four to five 4-5 months, said Gupta. “With supplies limited we expect the prices of cobalt and lithium to increase,” he said, adding that demand for lead, aluminium and nickel could also increase in the next 2-3 months, pushing up their prices. “Currently, lead is trading at Rs 151 per kg in Mumbai which we expect at 10-15 per cent appreciation,” said Gupta. He added that aluminium, which is trading at around Rs 141 per kg, is likely to see an upward movement at 15 per cent, similar to nickel, which is largely imported and is being traded at about Rs 873 per kg.

Sohinder Gill, DG, Society of Manufacturers of Electric Vehicles, said that cobalt prices crashed recently, but are sure to firm up in the medium to long term due to its scarcity and availability in very few places. “India doesn’t have known deposits of lithium and cobalt and, hence, these metals are subjected to international demand and supply, including that of India. Although lithium prices have been volatile due to companies scrambling to secure the rights, internationally lithium prices are sure to decline,” he said.

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