OCR Text |
Show OPEN COPPER MARKET SOON, IS PREDICTION Editor of Boston News Bureau Discusses Situation Situa-tion in Light of Recent Developments Develop-ments in Steel. The de-ion tu e.t.'iii'.; an open n;ar-ket n;ar-ket for steel products en and after Jan-e.'u-y 1. woulvl e-jin to po.iu to a similar c(j'irso of action with respect to copper, :-:;iys t'.:c editor of i.c Boston Ncv:a Du-le.-.u. liarr-.i as it may prove, the sooner aiaifieial s'.'jjporta arc removed and natural nat-ural iiin.i allowed fui. p!:'.y the sooner wil! solid foundations once again be built up under Ihl.-; i; eat indu.tiy. The average rrl':i of eup;er for the ton-year ton-year r'iod prior to the war 'as sll?ji:t-ly sll?ji:t-ly over 1.",'. cent?. On t lie basis of pres-eut-da'- operutiiur cosu and taxes, our ..'.nu.oOO.O'JO pounds of annua! refinery ou!juc could not bt: pi'odueed profitably at less tiutn L'O ceul.s a pound, and if when the i ne'.'i table, r vice reduction dees take place, the quotation is dropped below this figure, it will mean that t lie Industry &h a whole Is face to face with profitless conditions. There are exceptionally rich properties which can make their product today and :et out whole with 20-eent copper, but even they would be confronted with drastic' dras-tic' dividend reductions if Indeed they were not compelled to pass I hem entirely until costs showed something like a eoi tespondiiik' decrease. In considering present-day costs, how-ecr, how-ecr, it i.s but fair to state that they contain "overload" not present in prewar pre-war accounting. For instance, tho pub-li.-Cied costs of producing copper-today are before any credits are allowed, as formerly, for-merly, for precious metal recoveries. A sain, libera! charges for "depreciation and depletion" are today made a conspicuous con-spicuous pai t of Die operating expense, which did not a few years ago appear on the, cost -sheets. . These- items ar re- sponsible for br'o:-ti;i t'..e "norma l" pei'-pound-Gf -copper cost from :) to 0 cents. f!ut even with this "bookkeeping" in mind, the extraord inary ad vances in real items of outgo wages, coal, powder, materials ma-terials of all kinds, smelting and refining have .jumped costs to an alarniim? degree, de-gree, in consequence too savage a cut in price would jeopardize the volume of output. Mining companies, of course, would -not operate their properties at. a lots. As it is. Borne high-cost mines must be reconciled to take a shrinkage in inventory, inven-tory, that i.-i, unsold metal now accumulating, accumu-lating, unless, of course, they have had the foresight to carry on their books their unsold metal at a nominal figure. The danger from the standpoint of the Investor is that with an open market for copper and a rapidly accumulating surplus there wlU be a stampede. to sell with resultant re-sultant crash in metal quotations. There is this to be said, if there is such a stampede stam-pede it will- not be laid at the doors of the big produo-ers. They can staud pat and carry their surplus copper until the world's reconstruction and peace demand is again built up to sizeable proportions. There Is also a community of interest among the big factors in copper production produc-tion which should save the industry from any destructive measures. Anaconda. American Smelting & Refining, Phelps. Uodge and Calumet & IJecla, directly and indirectly represent at least 7.) per cent of the country's refinery output and they can be relied upon to use their great influence in-fluence to the conservation of our natural resources. The action to be taken January 1 in respect re-spect to copper prices Is awaited with intense in-tense concern. More and more it looks as if reduced ontput, incidentally reduced earnings must correct the present over-supply. |