Show I Mining Industry Looking Upward I Economist Declares In Discussing Securities and General Conditions Special Dispatch BABSON PARK Mass Nov 18 Roger er W W. Babson Batson Da on in his weekly weedy inter Inter- interview view today discussed mining securities cur cur- ties tics and the general mining situation Mr M Babson calls attention to the fact that mining securities are about the thc only class of securities that have not gone one up IMPORTANCE J OF MINING U When I was a a. young oung man mIlD working on Wall street mining securities were very erT active and a a. very popular invest Invest- ment The majority of buying on the Boston Baton Stock Exchange was on copper blocks alone while silver sliver zinc lead mid and other mining securities followed a close second Today mining securities are dead while even coal securities and oil securities arc comparatively inactive The entire industry Is U in inan Inan inan an unpopular era Because mining securities s however are not popular atthe at atthe atthe the present time Ume is no reason re on why they should be neglected Although I am amnot amnot amnot not bullish on any stocks at th mo mo- moment moment moment ment yet et If compelled to Invest I should take mining or oil stocks In preference to any others Because the mining Industry Ind try is tem ter- temporarily under a cloud we must not not- forget the magnitude of the mining Industry We think copper mining Is dead in the United States Stat and yet et last year er pounds to a total value alue of were pro pro- In addition to this lead to the value alue of zinc to the value ulue of and slaver silver and gold cold to the value of were produced In a a. normal year ear a total of f about In general metals Is produced In the United Stales States In addition to this we Wt might include iron to the value of or coal coil to the value of and oil to the value of If IC Mexico Alaska and Canada were included these thess figures would v. be bes swelled selled s considerably more Canada especially eca Is producing more mineral products every eHry year and without doubt the mining industry less has a very cry bright future In Canada COPPER COFFER IMPROVED ID The current statistical position of ol copper metal including production stocks on hand Imports total new supply shows an encouraging situa don tion Overproduction O has been the bane of the copper Industry for the past two o or three years ears cars Now it appears that production Is s under control to some extent at least Production in September 1927 Indicated a drop of about pounds compared with the same month last year pear Since the first of or the year there has been beena a reduction of monthly copper pro pro- production production amounting to around COO pounds The import situation Is not out of hand and while imports are still sUll relatively heavy they are not noticeably above last years year's levels le The demand for domestic consumption consumption tion Uon recently is somewhat smaller running at an are annual rate now of around pounds com mm- compared compared pared paled with a a. rate for 1926 of 1800 pounds The most encouraging part of this situation however howe Is the lower er sur sur- surplus surplus surplus plus supply Stocks on hand the first of October October including all descriptions of copper were around pounds which was a a. reduction of over o ov cr pounds from the high point in March of this year This situation coupled with the lower supply abroad is distinctly encouraging COAL COAT PRODUCTION HEAVIER nEA Official settlement of the coal strike In the middle west w st has increased in- in creased production so that it its Is s now nov running over tons weekly w Bituminous prices have weakened in accordance accord with larger output Be Before Bc- Bc fore the thc bituminous strike the oper oper- operators operators operators had piled up lip a ton supply About tons of is still available and with the resumption resumption tion Uon of production there is for the Uie time being a large luge supply over-supply of soft coal Many mines remain closed in view of the surplus coal which has been plied piled up The anthracite situa stua- situation don tion Is somewhat stronger strong although the Ue mild weather this fall has hS caused some hesitation in consumer con umer demand Production however Is not as great as II last year jear eu The outlook for lead and zinc Is affected arf considerably by b the large stocks of these metals abroad Con Con- Consequently Consequently domestic prices are low lov even en In the face of recent reduction In Inthe Inthe inthe the rate of output Profits In the lead and zinc mining Industry for 1927 are now showing up well but it Is dif dif- difficult difficult difficult to see sec how lead and zinc prices can decline very ery much further Rath Rath- Rather er I would look for the next broad swing to be toward some improvement Petroleum production which for fora a a. year or more mor has hS been far above normal has In the course of the past pasi pas two 1 months shown substantial decline This is Ie a very ery salutary development because use production over has been the bane of the oil Industry for some time Ume Stocks both of crude um and refined products are exceptionally exceptionally exceptionally heavy Y but if the decline in production continues It t augurs well ell for Cor the future of oil prices This great Industry also has been producing very heavily on a a. constantly narrowing margin of profit PRICE OUTLOOK Of course co e the price prim of copper and most metals is low at the present time Silver is Isery very tery low Coal Is being mined almost at cost while the overproduction over o lion tion of oU oil is keeping down do the price Almost all aU of these raw materials are arese selling se at a t abnormally low prices This probably ac accounts for the inactivity of the mining Industry because b cause the ac activity sc- sc of any Industry Is directly pro pro- proportional proportional proportional to the profits in the in in- in It however should be re remembered re- re remembered remembered that an abnormally low price for any product always increases the use of the product and decreases es esthe the production of the product Hence after a product has sold at an abnor abnor- abnormally abnormally abnormally mally low price for a a. long time the price always turns upward This Is Ison Ison ison on the principle that when hen a man Is flat on his back there Is s only one way he can look and that Is upward Hence it is always better to be op optimistic op- op optimistic tim on something which h Is ab abnormally ab- ab abnormally abnormally normally low than on something som which Is abnormally high I For the above reasons the mining industry is to a certain extent con con- connected connected reeled with general business condi condi- As general business Increases the demand for products of the mines also Increases while as general busi busl- business business ness decreases the demand for the products of the mines decreases e. e The standing now at 1 per percent percent percent cent above normal compared with about 10 per cent nt above e normal at this time Ume last year Indicates that at present business b Iness conditions are arc about II normal In the United States Stales Opinions OpInIons Opinions ions differ as to what the next move move- movement movement ment in general business conditions will ill be but it must have its affect on the mining Industry Even If It general business as a 3 whole is not as as good as this year ear the mining industry should suffer less than some other industries which are abnormally prosperous Copyright 1927 1917 Publishers Financial Bureau |