| OCR Text |
Show COPPER SURPLUS DIES FAST Unexpected Sales During Second Quarter Causes Advance in Price, Present Domestic Consumption Consump-tion Is 25 Per Cent in Excess Ex-cess of Peace Times. Facta full of Hlgnif lcar.ee to thoso in-j in-j tere.'iU-d in the future of copper are contained con-tained in a Htal ernent madti for the Boston Bos-ton Ni'wh Bun-ail on the future of t lie ! rii ntotal. 'J'IiIh Htatement, made by Charles Haydou, who w;is loritf Identified , witli tho porphyries, which should add to i tho optimism of those interested in tho 1 future of copper, ia ad follows: "In estimating the so-called surplus wtock of copper, it has been customary for tho press to take as a basis of figuring figur-ing this surplus the monthly statistics of mi no production. ! "The.ro is ;m interval of three to four j months between tho time that the copper is mined und is ready tor market, namely, name-ly, tho period consumed in concentrating, smelting und refining tho same. This cupper thus tied up is called the permanent perma-nent 'sfock in trade.' What may bo ealled the actual surplus of copper is only tho marketable, shapes over and above r he usual cany of the refineries in the ordinary conduct of their business. I "All of tho marketable copper produced down to the mlddlo of December laat was sold and delivered before the end of the year, except a special stock that was sold In this country fur the account of some of our allien. "Tho unsold stock of copper on hand on January 1 , I y Hi, consisted of: "1. (,'opper beloiiKlng to the allies. "i!. Copper that was refined during the second hall' of December. ' "3. t'opper carried over for the account i of consumers. "4. Tho usual stock In transit and process. "It should be recalled that the mine production at the solicitation of the United States government was continued at full scale to tho end of the year. It was not until late in February that tho refinery production began to show a substantial sub-stantial decrease, buL has continued that decrease ever since then until it has reached a partly with the present 50 per cent ii 1 1 n o output. "In the meantime- tho accumulated tUoek of raw material at the refineries has been cleaned up. "Til the first quarter of the year production pro-duction considerably exceeded deliveries because of practically no demand, and with this there was a consequent depression depres-sion in tho price. This condition, however, how-ever, was completely reversed in the second sec-ond quarter because of reduced produc-tlon. produc-tlon. Unexpectedly a large and urgent demand came in, which caused a natural udvancu in tho price. The sales for the months of May, Juno and July were 637, - 00(1,000 pounds. Frequently an erroneous impression of the picture prows, due to confusion of the terms 'sales' and 'delivery.' 'de-livery.' While the sales for the last few months have substantially exceeded the production, t hat is not necessarily the case with deliveries, so that a stock of copper on hand might, in the relative importance of the same, be very different differ-ent us to whether it was a stock of copper cop-per on hand not sold or a stock of copper cop-per on hand sold but undelivered. "Present' domest ie consumption is about 25 per cent In excesse of pre-war times, w ith the mills booked ahead in certain of their lines to their capacity for the next t three or four months. Some of these ! mills are ah ead v c:i Him? for immediate j shipment of copper, although it was l originally bought for delivery in Septem-; Septem-; ber. "The eastern mills have an ample sup- i ply of labor and working conditions have j been satisfactorily adjusted, indicating i full capacity output. This is In striking j contrast with the continuous scarcity of i labor at the western smelters with their ! 60 per cent output. "The mills are booking lareelv for export ex-port as well as home trade. The reduced j value of sterling and francs has naturally advanced the export price In par it v of currency price in this eounlrv and much i beyond the prices current in England and Franco. The buyers there are drawing on government stocks, which, it is well, known, are steadily going down. "The total stock in transit, in process and In marketable shape is not available, but is probably larger as of Julv 1 than as of .January 1. Ji so. it is a fortunate situation for the industry as a whole in that January i there was a total absence ! of business and for almost three months thereafter, whereas July 1 the largest buying movement in the historv of the j Industry was In full swing, with 'a record I tonnage for peace times sold for delivery spread over the third quarter. "Whilst the stock of July 1 in this country may be and probably is larger than January i 1, there is no doubt the stock of the ' world is much - less, with a greatly reduced re-duced production here, as well as in Aus-' Aus-' tralia, Japan, South America and wher- ever copper has been produced, due to the same underlying conditions everywhere, every-where, viz., the withdrawal of pressure for war supply, the reduced price and the labor shortage. The world is de-1 pending on this country for SO per cent or more of its copper requirements, and a continuance of demand of the past three months will rapidly deplete the present surplus stock concentrated in this country, with little prospect of increase in production, now oU per cent to 60 per cent of last year. "Most of the copper bought in the last three months was to supply the home demand, de-mand, as the consumers in England. Franco and Italy have drawn against government owned stocks in those countries. coun-tries. "Looking forward, there seems to be more occasion for concern as to prospective pros-pective supply to meet the world's need than as to the present stock. "During the current calendar year the r.tock of copper held in this country for t':e allies and belonging to them has'been reduced by shipments abroad from approximately ap-proximately I'O.mOO.uO.i pounds, January 1. to 30.000.000 pounds. August 1. "While due to the causes above mentioned, men-tioned, the stock of copper on hand has increased substantially from what it was January 1, because of the large reiinerv output the first of the year, and a lack n' sales and consequent del.veries during the early months of the year, the 1-as'c f.ici wlr.ch accounts for ihe strength of tho copper metal market at the present time over and above what it was at the beginning of the year is due to the fact that with no increase in mine output there has been an enormous increase in sa'es bo tli here and abroad, although the deliveries for such sales have not appeared ap-peared in any. of the statistics given for either the first six months or the second quarter of 1?H'." |
