Douglas daily dispatch., 1927-08-10
Weekly Copper ReUiew


per, lead and zinc during the past
week, continued strong market, ex-
cellent demand and a promise of fur
ther price advances. Copper now
stands at 132s, lead at CTS and zinc at
$40. There is not the same forcible
reason existing for the advance in lead
and zinc as with copper and these
metals are riding on q general advance.
The metal prices but three weeks ago
stood copper 1917, lead GAO and zinc
610
Mining dividends do not reflect any
depression in the industry in spite of
the fact that some companies have cut
or passed their payments. The total
dividends paid during July, 1927, was
$18,901 ,426 as against $16,765, 500 in
April, $18,960,995 in January and ST.
991,762 in July of 1926. Several semi
annual dividend payers account for
most Of the differences in July and
April, but there has been a substantial
increase over year ago. The months
given are corresponding quarterly Pc
riods.
The advance in lead prices caused a
buying movement of considerable pro-
portions and the total volume of sales
could have been very large, but the
selling agencies generally refused to
sell in large quantities and pared down
the orders. Even with This the sales
of lead have been we'll above the aver
age.
The action of the selling agencies in
refusing to sell in large quantities or
to take orders for advance delivery to
any extent indicates that they, too,
have the feeling that lead is going to
continue to rise. The method Of hand
ling the market by the selling agencies
prevented a rapid price rise which
would probably have been shortly fol-
lowed by another slump
Zinc is in a somewhat better position
than it has been although the curtail-
ment has been at the smelters and not
at the mines. Higher prices on zinc
are asked for October and November
deliveries. The output of slab zinc by
countries, which in 1926 furnished SO
per cent Of the worlds zinc amounted
to 116498 short tons in June, against
120,712 tons in May and 103, ,467 tons
in June, 1926.
Confidence on the part of the pro-
ducerS characteriZeS the copper mar
ket and there is no timidity about ask
ing the increase prices. The buyers
are naturally reluctant about placing
orders, but there is take-it-or-leave
it attitude that has caused the feeling
that the producers are anticipating
further advances.
OF course, the increased price is an
artificial one, created by the act of
curtailing production and the copper
market still has the weakness of
greater productive capacity than the
consumptive demand. Just as long as
the industry as whole sticks to the
present curtailment program, the price
will go up, stay up and remain strong,
but just as quickly as there is any
slipping to increase production and
have larger quantity of the metal to
sell at the increase price, the market
will fall to pieces like house Of cards
There is no strength to a market of
this nature as it's stability depends
upon too many different organizations
who, by virtue OF the Sherman act,
cannot be bound together. The pres
ent price advance and curtailment
program is but a temporary eXpedient
to bridge over the present period of
lessened consumption and the real and
listing strength of the market can only
come when the price is truly regulated
by supply and demand.
At 1914 cents the price was too low
and many mines were wasting assets.
Fourteen cents is about the price that
copper should be to assure fair and
reasonable profit to the majority of
the producers. 1t is generally felt that
the present price advance will bring
copper to the IA cent mark.
1t has been a general complaint
against the Copper Exporters, Inc,
that they force hand-to-mouth buying
in Europe, that they do not have
enough copper available etc. This is
probably true to some extent and it
has resulted in general cleaning up
of stocks that were not under the con-
troll of the combine. A stabilized Eu-
ropean market cannot come until Eu-
ropean copper is almost entierly under
the one agency.
Germany greatly profited industri-
ally by the British coal strike of last
year and the industrial activity of Ger
many today is a direct result of the
business start when England was in
dustrially paralyzed. The result has
been apparent in the metal consump-
ton particularly as to copper, lead and
zinc as the quantity which they are
now using is almost twice the amount
which they used during 1926. There
are almost no stocks reported from
Germany as the unsteady market has
caused a cautious buying policy.
There is a feeling that the producing
in the United States may well
stick to the present broad policy, but
that the difficulty lies in the African
and South American competition. The
South American competition is directly
controlled by United States copper in
terests while Katanga is tied in
through its marketing.
The real extent of the Katanga
competition of copper is shown some
what by the 1926 annual report of
Union : Miniere du Haut Katanga,
which has just been made public. Ka-
tanga produced last year $4,000 tons
of copper as against about 100000 tons
in 1925. The significant figure is, that
with the lower production and on a
lower average grade of ore, they were
able to reduce their costs from 12.42
cents per pound in 1925 to 11.08 cents
in 1926.