Show t a aI BUSINESS I Tm TIIE COPPER cOlm INDUSTRY This past summer the copper industry began a downhill slide that has continued up to now Most of the problems are the result of increased shipments of foreign copper to the US U.S. bringing about a tremendous surplus of the red metal This in turn has created a weakening price structure with all the outstanding producers cutting prices drastically most recently to 60 cents a pound from the previous 65 cents Adding further to the industry's industry's industry's in in- problems consumer demand for copper has been very slow a costly new labor pact was signed by the foremost companies following a week six-week midsummer strike copper production schedules have been substantially reduced by some of the leading companies and cash flow problems continue COPPER COPIER STOCKS UNDER PRESSURE In view of the current unfavorable unfavorable unfavorable un un- favorable conditions in the copper industry the stocks of the foremost companies are at present in the investment doghouse Over the years however copper issues have always been volatile reflecting the cyclical nature of the industry in in- They are currently in a down clown phase but they may not remain depressed for long After all copper is still an extremely important met metal J i ithe in iii the construction electrical transportation and industrial machinery industries Next year therefore the beginning of turnaround a a in the industry could well occur When this does happen copper stocks are likely to rebound quickly r LOOKING AHEAD OPTIMISTICALLY Right Hight now conditions in the copper field appear to be about as pessimistic as they could be but we ve feel there is hope for some notable improvement in inthe inthe inthe the future For instance earl earlier r ar many large copper coppet Users had had a buildup p si sizable able fu- fu il in inventories vent rles in expectation ot of a lengthy industry As it turned out however the the walkout was of relatively short duration for most firms So as soon as the customer inventories are whittled down normal buying should be resumed This factor along with the cutbacks cutbacks' in production by most of the leading companies companies com corn ponies should help greatly to improve improve the supply-demand supply rel relationship As a matter matter of fact one leading producer feels that during the early 1 Os there will vill be a global copper shor shor- shortage tage tage- There is still a wide spread between the US U.S. copper price and that on the London Metal Exchange although the recent drop in the domestic price to 60 cents helped to narrow the gap somewhat Also some industry experts feel that foreign producers may soon begin to realize that continued output at atlow atlow atlow low prices is a losing proposition There are other possible developments that could improve improve im im- prove the copper picture One would be a decision by the U US U.S. S Government to stockpile copper Some copper company executives have proposed that the government purchase tons The chances of this happening however are rather remote Another possibility ty would be a government decision to institute institute in institute in- in tariffs tariffs possibly possibly 15 cents per pound or some other restrictive measures against US U.S. U S imports of the red metas melas As for prospects for the latter a bill was recently proposed that would add copper and copper-containing copper products to alist a alist alist list of sensitive import-sensitive articles which arc are ineligible for rate cut-rate duties or no duties at all Representative Morris Morns Udall Chairman of the House blouse Interior Committee is strongly supporting supporting supporting sup sup- porting this bill Hearings on it are like likely after Congress reconvenes in January |