Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-01-02
OUTLOOK FOR COPPER
INDUSTRY is BRIGHT
Expert Declares Companies Are in
Strong Position Pending
Next Buying Wave.
BY CHARLES HAYDEN
HAYDEN, Stone A. Co.

The three questions that we are con-
stantly hearing are: From the pro-
ducer, should the price of copper be
maintained at Is cents; from the manu-
facturer, will the price be maintained
at IL cents; from the investor or Specu-
lator in copper stocks, can the price be
maintained at IL cents?
The last year has been one of extra
ordinary contrast with former times
throughout the copper industry in re-
Spect to production, consumption and
market development. Production in
creased lit per cent and consumption
5 per cent over 1928. Since 1922 con-
sumption in this country has increased
100 per cent. Before the World War
this country used 40 per cent of Ameri-
can refinery production and is now using
so per cent.
Answering the original three ques-
tons:
Cd President Hoover has stated that
he hopes there would be no reduction
in wages in industries in general. All
mining companies pay their employees
on a sliding scale and a reduction in
the price Of metal would automatically
reduce the wage scale. Naturally, there
should be produced all the copper that
Is actually needed for consumption, but
the producer is doing nothing wrong II
he does not OF his own volition produce
any more than he, by careful analysis,
finds the consumer wants.
CD The manufacturer says he does
not complain of the l8-cent price pro-
vlded that II he buys, he does not find
his competitors a few weeks hence buy
ing 1t at lesser price. A study among
the manufacturers and consumers who
use copper shows that consumption, in
our Judgment, would be no larger at
10 cents than 1t is at 18 cents; In fact,
temporarily 1t would be smaller because
OF the uncertainty such an act would
produce, and the best evidence that the
prevailing price is fair is that the great
est consumption In history was secured
at about the prevailing price.
CD II the 18-cent level for the metal
Is maintained, then good copper securi-
ties are selling in the stock market at a
price which, based upon earnings, show
very attractive return.
Copper is not bought daily, but the
buying comes in waves and it is only
natural that at the year end there
should be a slack period of buying, par
t1cularly in view Of the quite recent
stock market break.
Never have the mining companies
been so strong financially as they are
now, and they are in perfect condition
to carry any inventory that might ac-
cumulate pending the next buying
wave. At no time since the war has
there been such a cleaning up of sup
plies Of copper throughout the world
as now exists. What copper is being
carried is all being carried at the re-
flnerieS, and that amounts to less than
a months supply. Were It not for this
abnormal cleanup of manufacturers.
even this accumulation by refineries
would not be existent, and it should be
quickly absorbed as the usual conduct
Of business is restored. There cannot
be very short periodical delay in the
use OF such stable commodity as cop
per-
The public service corporations and
utilities generally are the backbone of
the copper industry, being its largest
consumers. We already have authori-
tative information of very substantial
orders being placed for delivery through
1880 by this Industry.