Aluminium, the only base metal that was showing a comparative resilience among all the base metals in last three months, has seemed to come under severe selling pressure in last two months as troubles in global auto sector rise. International benchmark prices on London Metals Exchange lost more than 10 percent in last five days while till October, when the rest of the metals had lost nearly 60-80 percent from their peak, aluminium had declined about 43 percent from its high. Domestic prices reflected by the December future on MCX, have also lost more than 20 percent in last two months, where prices are currently trading near Rs 75 per kg. The decline in last two months is largely contributed to a contracting global auto sector while Chinese demand is expected to shrink considerably in 2009. A rising inventory on LME continues to reflect a tame demand outlook for the metal that is largely used in manufacturing of cars and airplanes. The following table shows, a comparison of the % fall in prices from their peaks vis a vis the same in last two months. While Aluminium showed some resilience till October this year, when all base metals were correcting severely from their peaks, it led its counterparts in last two months in terms of % decline. % change in LME price Peak till October November December Nickel -82.9 9.8 -6.1 Zinc -76.5 0.1 4.3 Lead -70.6 -6.0 -9.6 Copper -59.8 -5.9 -4.4 Aluminium -43.0 -9.4 -9.9 Automobile sales in US, world’s biggest consumer of cars, declined to its lowest level in 26 years in November. While domestic car makers are experiencing a severe cash crunch that raised speculation of a possible government bail out of General Motors as well as Chrysler, the % share in total car sales of Asian brands like Toyota as well as Honda also showed a more than 30 percent decline. According to Aluminium Association, Aluminium became the second-most used material in U.S. cars since 2006. While a contraction in global automobile sales is a key factor contributing in the price fall, rising inventories on LME also reflect a slowing demand. Inventories of aluminum stand at above 1.85 million tons, their highest since November 1994. Prices have experienced sever pressure in last three days after Antaike, a state-owned research group in China predicted that consumption of primary aluminum in China, the world's top consumer, may rise 8.5 percent this year and just 3 percent next year due to the global financial crisis. The expected growth rates would be the lowest in years and mark a sharp fall from a more than 30 percent rise in 2007. Antaike sees China's aluminum consumption rising to 13 million tons this year and 13.4 million tons in 2009.

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