Alma record. (Alma, Mich.) 1878-1928, 1922-11-23
COPPER'S A BUY
Says BABs0N
SHOW TENDENCY TO ACT INDE'
PENDENT OF BALANCE OF
MARKET HE SAYS

Copper stocks have been showing
more life of late and evidence a ten
doncy to act quite independent Of the
rest of the market. Roger w. Bah
son accounts for this change by call
ing attention to a shift in the con
ditions which control the copper in
dUstry.
"The copper stocks, says Mr.
Babson, 'like any others are govern
cd by a combination Of the conditions
in the security market and the fact
ors taat control the production and
consumption Of copper.
"The industry" continues Mr..
Babson, els now in 4 better position
than it has been for the past four
years. In other words, it has taken
the industry practically this length
Of time to recover from the abnormal
=, odacing conditions and heavy
stocks built up during the war years.
Due TO the continuance Of heavy
Gtncka which, at the high points in
1919, amounted to over one billion
pounds, production has been radical
~ curtailcd. Prices have slumped
from the wartime price of 3Sc for
e'ec;rolytic copper 70 a low point Of
re reached about q year ago. The
industry has suffered in the prescAt
period Of REIMBURSEMENT to a greater
extent than probably any other III
Iortant industry.
"The fact thai copper in It's manu-
e. Of g.. A. "a
qualities has worked to the disadvan-
tage Of the industry during the past
two or three years. For example, in
the ease Of ammunition abroad, all
Of the shell was destroyed except
Tie copper cartridges. This, as you
remember, was used again and
again ard a. the end of hostilities,
large stocks Of unused brass and cop
per cartridges went for Industrial
purposes. Reclaimed supplies are
now greatly diminished 80 that the
demand for new copper will gradual
~ increase from now on.
production has been gradually in
Creasing since the first of the year
Production during the war years
averaged we'll over $50 million
pounds monthly. Compare this with
IN output during 1927 averaging I'M
der % million pounds monthly. In
fact, even exports last year were ma
terially heavier than the total United
States production. Production at the
present time is averaging about 85
million pounds monthly. Exports
have tended - increase and are
around 65 million pounds each
month. Domestic presumption is al
so Increasing so that the statistical
position Of the Industry is relatively
strong This does not promise any
radical comeback, but rather that
the worst is over ard that the long
pull outlook is much better than it
has been for a number Of years.
This change will bring about better
profits for the larger, low-cost cop
per companies.
THE producing capacity Of the in
0ustry is still large so that any in
crease in price tends 20 stimulate
production. This, in turn. causes the
market TO weaken. The reason for
the slump in most copper stocks
around the first Of November was
clear enough. The rate of importa-
ton from South America for a mat
ter CT months has been increasing.
Our southern neighbor can produce
at low cost, much lower than domes-
tic companies fact that has been
holding the domestic price down.
Their producing capacity, however,
is distinctly limited and as demand
increases they will no longer set the
market. The price of electrolytic
copper has been fluctuating around
14c for a number of months. De-
mard during 1923 should tend to
strengthen the market. altho produc-
tom will be sufficiently large to sup
ply this demand. In the event Of a
good building year in 1923, the de-
mand for copper will improve. II
should total at least as much as this
year, and considerably better than in
1921. The European demand will al
so be slightly better. Altho there
are still various bearish factors in
the situation, the bullish features
are Of dominant Importance. Hence
am distinctly optimistic for grad
ual recovery in profits.
81 am distinctly bullish" concludes
Mr.. Babson" on the stocks Of tho
large low-cost producing companies
General business continues its
sidewise movement in spite of the
recent election. The index of The
Babson chart shows activity 5fc be
low normal. Figures Indicate tina
car shortage is the largest in his
CRY.