Show the copper metal situation y 0 low price cuts production pro according to the engineering and mining journal of october copper metal has yielded to the long stran strain under t which it has been laboring month f after month in fact ever since last wini heavy buying there has been anxious p anticipation of a buying movement which un unfortunate fortunat unfortunately ely has not matured glancing over the average prices of electrolytic copper for tile the first nine months of the year it is surprising to note the small fluctuation in the price of the metal the lowest average price in june and the highest in january show a difference of only this stability of copper prices emphasizes the comparative dullness of tile the market for practically the entire period contrasted with a similar period of 1919 we have a range from a low in march of to a high in august of indicating di by this wide variation the intense speculative trading that occurred last year when large quantities of american copper were purchased by tile the japanese only to ruin the market subsequently in this country electrolytic average prices new york 1919 1920 1900 january Jant iary IS F e breary 16 IS 18 march 0 14 IS april 15 IS ISAGO talty 15 IS june 17 IS oga july 0 21 IS august 0 22 IS september 21 IS 18 october 21 1534 noa november eilber 0 19 december IS year no market in the middle of september copper was sold at about delivered the price then gradually declined but sharply of late so that copper can now be obtained for delivered a decline of ac in a little over a month the copper companies are producing copper to sell and not to hold and the consequent lowering of their price to make a market accounts for tile the sharp decline the policy of most producers has been to hold their output from the market at the absurdly low prices for the metal with the thought that not only was there a great and potential demand for copper all over the world but that domestic production was going on at an unprecedented rate and a buying movement would start of t its own accord at any rate they felt that a further concession in price would ot lot result in increased purchases finally the financial strain of carrying so 80 much unsold copper became acute certain producers no longer found themselves able to follow the policy they had mapped out ut and gossip had it that they underbid their competitors in order to sell their copper during the period of market dullness the largest business recorded was by the smaller producers and always at prices below that of the major operators this trade inequality has begun to disappear practically all the larger copper interests are participating in the market and are furnishing keen competition to those interests which formerly consummated the greater share of business As a result the price of copper reflects the keener competition for trade among tile the copper sellers at copper is decidedly below a prewar pre war price basis the average price of new york electrolytic for the years inclusive was and is undoubtedly below the cost of production of all but the lowest cost producers the cost of pr producing 0 copper as given by representative copper companies in their annual reports for last year follows utah copper r oren open cut porphyry 12 copper range deep lake jake mine ala 02 inspiration deep mine porphyry ala ray cons con deep m mine ne porphyry bla 94 nevada consolidated bla 14 tennessee copper lode cla 72 calumet recia hecla deep lake mine 1977 19 77 chino porphyry 19 shattuck arizona lode 2240 22 40 chile copper porphyry IS 35 a exclusive of depreciation and depletion charges b exclusive of federal taxes c exclusive of new york charges the list is selected from both large and small producers porphyry and lode copper mines and although the method of cost accounting in many cases is different the table furnishes an indication of what copper means to the industry of course business moves in cycles there are periods of depressions and periods of prosperity losses must be taken with the gains tile the copper industry is passing through one of these depressed periods after having experienced a period of unprecedented prosperity when copper prices ruled abnormally high that is the one comforting feature of the situa situation tion and were it not for tile the financial surpluses which most copper companies accumulated during tile the war the industry would indeed be jn in dire straits but there is a limit to which these financial reservoirs can be drained and for many months they have been called upon to tide the companies over the present trying period it if copper cannot be produced at a profit copper does not represent a profit mines will shut down production is already being curtailed A preliminary estimate of copper production for september places it at pounds which is a decided decrease from the preceding months figure of pounds and the smallest output of the year there is one striking feature of the activity of the copper mines during the postwar post war period although they have not operated to capacity they have been operating above the prewar pre war rate of production the following table is intended to illustrate this point from 1909 to 1913 smelter sni elter production in the united states averaged pounds in 1919 production was about but in 1920 a preliminary estimate should production continue at the present rate is pounds this is about IS 18 per cent above the prewar pre war average given and would indicate that there is much room for healthy contraction in the copper copper supply production and prices 1906 1920 smelter prodoc av price tion in lbs electrolytic N Y 1906 19 1906 1907 1908 94 9 1909 1 12 1910 1 12 1911 1912 1913 1914 13 1915 1916 27 1917 27 ISO 1918 24 1919 1920 how great a curtailment of production may take place it is hazardous to predict but that producers are becoming tired of the present state of affairs and are determined to force an issue seems clear europe is in no position to purchase the copper it needs under und erthe the present foreign ex exchange change situation and is content to utilize the large amounts of scrap material still available on the continent this attitude alone of our greatest copper customer should be sufficient to compel the industry to contract its output and coupled with the smaller domestic demand would seem to insure it despite the serious predicament of the copper producers no one doubts for a moment that the industry will emerge successfully cess fully from its ordeal and that after economic laws have again become balanced a period of unexampled prosperity may confidently fi be expected the market is seeking out its bottom with a determination to reach a level from which confidence on the part of the consumer in a stable market will be restored to do this it is necessary for the market to not only reach the bottom but also to get under it so that prices will be raised or the market supported this state of affairs is progressing at the present time and low levels for the year are being recorded |