Recent Trends In Copper Production, Ore Reserves And Costs

IN the closing months of 1936 the copper industry gave every evidence that it was at last on the threshold of an improved era. At the beginning of the year prices stood at 9 1/4¢, which in itself was a great improvement over prices prevailing for the three previous years. Industry generally was showing signs of moving forward in this country, and business was definitely good in certain foreign quarters. The threat of war and prep-arations for rearmament in Europe and Asia acted as a further stimulus purchasing. By midsummer the situation had so improved and stocks to been so reduced that the cartel of foreign producers (including American producers with foreign mines) decided to increase the produc-tion quota to 75 per cent on Aug. 1. Large-scale buying gave continued strength to the price and by Oct. 1 the quota was increased to 80 per cent, and again on Oct. 15, to 85 per cent. Notwithstanding this the price of copper continued its advance and on Nov. 1, with stocks declining con-tinuously, the cartel increased operations to 95 per cent, then to 105 per cent on Nov. 5. In the meantime the domestic producers, because of the great increase in home consumption, had increased their production by nearly one-half. At the close of the year copper sold at 120 per pound, and since the turn of the present year has reached 170. This rapid increase has not been wholly justified. Much of the increase was due to the legitimate demands of recovering industry, but rearmament orders plus accumulation of reserve stocks in case of war, purchases in anticipation of labor strikes and purely speculative activities on the London Metal Exchange accounted for the balance. Certainly in view of the state of industry and the general world price level, it appears unnecessarily high. Talk of a copper shortage is sheer nonsense, the recent condition in the market being created by overbuying, leaving but a small volume for speculative supplies. It takes some months for an increase in mine output to reach the market, but production is again overtaking apparent consumption, stocks have begun to increase, and this, together with the reopening of many small