Rusty cars to sustain rally for top metal
China's drivers will increasingly demand rust-proof cars. That's good news for the price of zinc, the anti-corrosion fighter that's already this year's top performer among base metals.
Annual passenger vehicle sales in China will rise to 24 million units in 2020, from 19 million last year, McKinsey & Co forecasts. Only about a third of locally-manufactured autos use galvanized panels to prevent corrosion and rusting, according to Heron Resources Ltd, a developer that's joining rivals who are building or reopening zinc mines.
"You have got the largest growth market in the world for vehicles and people will continue to push for higher product quality," according to Wayne Taylor, chief executive officer of Sydney-based Heron, which is planning to reopen a zinc operation in Australia that was shuttered in 1998 on low prices. "It's difficult to see, without a collapse in general commodities consumption, that zinc is going to back off."
