Evening star., 1940-09-30
Manufacturers Plan
Larger inventories
In Coming Months
Fear Of Higher Prices
And Delivery Delays
To Force Action
By PAUL ID, GESNER.

TALLY to holdings of raw materials
in their supply bins during the next
few months, trade circles said today.
Desire for bigger inventories is
said to stem from Cd fear OF higher
prices for materials later on, and 90
possibility of delivery delays if fast
industrial activity this winter and
next spring brings increased demand
for staples and a scramble for spot
supplies.
While Washington has warned
that runaway prices on strategic
ingredients going into armament
manufacture will not be tolerated,
most leaders assume that if the
Government steps in and fixes maxi
mum prices on copper, lead. zinc
and other items, the Government
controlled levels may be substan.
TALLY above those presently prevail
ing in commodity markets.
Prudence, therefore, warrants
some inventory building now, many
think.
Uncertain Over Prices.
That there is great deal Of un-
certainty over price trends in exec
utives' minds, however. is revealed
in the course of the copper business
the last few weeks. A gradual in
crease in stocking of copper supplies
was reported developing around
midsummer. and domestic buying
gradually expanded until the brisk
purchases in early September were
proceeding at rate far in excess of
consumption. During the last few
weeks copper was advanced only
around l cent pound. The second
of the two half cent rises. however,
caused buying to subside sharply.
On September 5 copper was
marked up to llia cents a pound
from II cents. This increase had
little effect on the gradually rising
swell of buying
On Tuesday of last week came an
advance to u cents pound from
ILL., cents.
Copper at u cents pound is still
we'll under the l7-cent level touched
in the 1887 inventory buying scram-
BILE. However. near the end of last
week Washington hung out the red
warning flag to metal men that
copper. lead and zinc prices would
be fixed by the Government if quo
tations were marked up too much.
Other Staples Affected.
Announcement the Government
would not tolerate runaway nom
ferrous metal prices brought a sharp
break in number of other indus
trial commodity futures markets
Easing on the announcement be-
sides copper. lead and zinc futures
were hide and wool forward con-
tracts. Cotton futures declined, too,
but in its case there were other
contributing depressing factors. in
cluding fear the Japanese German
Italian l0-year military economic
pact might curb export shipments
of the staple to Japan. substantial
cotton taker
In most trade circles the feeling
was general that if the Government
fixed metal prices to assure steady
flow of such materials to industry
at reasonable cost, it would be as
quick to fix prices of other staples,
too, if they got out of hand.
Fear Of delivery delays later on
as industrial operations expand.
however, ranks along with the price
element as factor in inventory
stocking plans. Steel mills, for in
stance, are running in excess of 80
per cent of capacity. and if much
more business is put on backlog
order books, forward delivery dates
on future business may be substan-
TALLY heightened. Today it is ex-
ceedingly difficult to order steel.
specifying delivery within 80 60 or
80 days. as was possible in some
constructions last spring And the
shipping situation, executives pre-
dict. is likely to become increasingly
tighter if delivery priority is de-
manded by the Government on giant
defense orders to come
Imports Available.
In the case of copper, domestic
consumption Of around 95 900 tons
a month is anticipated during the
next three months, contrasted with
an expected domestic output of be-
tween $4,000 and $1,000 tons
monthly. No acute copper shortage
is anticipated. however, for any de-
ficiency can be made up through
imports of foreign metal.
Manufacturers inventories of
raw materials. through recent ad-
dltions. now have risen to the high
est levels since January, 1898. ac-
cording to the National Industrial
Conference Board. They are, how
ever. considerably below the high
est level reached in the 1887 rough
and-tumble race to fill supply bins.
With many experts predicting that
industrial activity this fall may be
the fastest in history. demand for
raw materials is expected to be
much keener than in the short
lived 1887 factory sprint. Hence.
they pointed out. at present levels
factory inventories generally are
quite modest
Tending to curb forward buying
to some degree, of course, are the
uncertainties in the war situation
abroad. Throughout the summer
the view was almost universally
held that a sudden end of the war
might bring a collapse of British
buying here. and also a temporary
decline in industrial operations un-
til sufficient United States defense