By Nao Nakanishi
HONG KONG, Dec 23 (Reuters) - China's car boom is fanning hopes of a surge in the nation's appetite for metals and rubber, and some fear this could tighten global supplies of the commodities.
China's car sales topped one million units in the first 11 months of this year, posting a stunning 55.4 percent jump in sales compared with the same period in 2001.
As global car makers increasingly set up assembly plants in China, trade officials said China's demand for rubber, copper, aluminum, lead and zinc could increase.
"Chinese rubber demand is growing by at least 10 percent each year," said a Singapore rubber trader.
He said China consumed 1.2-1.3 million tonnes of rubber per year -- bought from main exporters Thailand, Indonesia and Malaysia -- while domestic output has stagnated at around 400,000 tonnes.
"It would be a horror if its annual demand exceeds two million tonnes by 2010. Possible drops in demand in countries like the United States or Japan would not make up for that," he added.
China's official data showed that November vehicle output reached 325,000 units, up 49 percent year-on-year, while car output soared 77 percent to 110,000 units. It also made 144.94 million tyres in the first 11 months of 2002, up 14.4 percent.
China's lead industry is also feeling the tremors from the car craze. They are predicting lower 2003 exports from China, the world's top exporter of the metal, in the wake of increased domestic consumption.
An official with the Battery Association of Japan said lead alloys accounted for about half the weight of batteries of about 10-13 kg for cars and 30-70 kg for trucks and buses.
SEMI-PRODUCT IMPORTS
"Another driver for (aluminium) demand growth is the car market," said UBS Warburg in a report on Aluminium Corporation of China Ltd , China's biggest aluminium producer.
If Chinese cars also used 140 kg of aluminium per unit, the global average in 2001, the automotive sector could raise the country's consumption of the light metal by four percent in 2002 alone, from 3.6 million tonnes last year, it calculated.
Industry officials said many car manufacturers were still importing large amounts of auto parts, such as galvanised steel sheets, as they were not yet available in China.
"Our local content in China is currently around 60 percent, similar to the level in the United States in 1982 when we began producing cars there," Tetsuya Ikeda, a spokesman from Japan's Honda Motor Co in Tokyo told Reuters.
"We are taking from Japan things they can't make there, such as (galvanised) steel sheets. It requires a special technology to make quality rust-resistant products," the official said.
About a half of the world's zinc consumption goes to galvanised steel sheets to protect it from corrosion for use in cars, electrical goods and roofing.
But as Honda's Ikeda said, things could change in the future.
And in one of the first signs pointing to that, Japanese steel giant Nippon Steel Corp said last month it was in talks with China's Baoshan Iron & Steel Co to build a plant in Shanghai to make steel sheets to meet the needs of China's car market.
On the copper front, an industry official in Tokyo said he expected a gradual shift in copper wire and cable production from Japan to China as it had happened in manufacturing of copper tubes for air-conditioners.
"Once copper tubes were the money maker. Japan exported them to China. Then they built plants for copper tubes. Now, we import copper tubes from China," the official said.