WELLINGTON NEWS
INDUSTRIAL METALS
(Special Correspondent. 1
WELLINGTON, May 12. The fall in. the price of the industrial metals since the beginning of the year has been sensational. The base metals constitute a very good barometer of the state of trade, for the metals go into the manufacture of a hundred and one things, and
> when trade is active there is natur- ’ ally a good demand for industrial ■ metals and prices tend upwards. And the converse, is true, and who can doubt but that the disastrous fall in prices of metals is due to the very depressed state of world trade. Early in January the price for standard copper was £69 15s 7d per ton a-njd last week it was £49 12s 6d a drop of over £2O equal to about 28 per cent. Electrolytic copper has dropped from £B3 5s to £59 a fall of over £24, equal to nearly 29 per cent. Tin has declined from £176 6s 3d per ton to £142 8s 9d, a fall of £33 7s 6d, equal to about 9 per cent; lead has declined from £2l 11s 3d to £l7, a fall of £4 11s 3d, equal to 19 per cent, and spelter has receded from £l9 10s to £l6 ss, a fall of £3 ss, equal to nearly 16 per cent. These are spectacular declines and the downward movement of prices is checking (business and driving values down further than the conditions actually arrant. With respect to tin it is estimated that out of a vorld’s yearly production of 185,000 tons, 67,500 tons are now being produced at a cost much higher than the present market price. At the end of February the Tin Producers’ Association officially estimated that curtailment of production then in force represented 24,000 tons a year, and that other companies were expected to join in the scheme of curtailment which would bring the total curtailments to 30,000 tons annually. If the scheme were effective then the statistical position should be a strong one now. The estimates and prospects have been upset through hidden stocks being brought to light. There is said to be no .confidence in tin values either in. Europe or America. To hold up tin or to restrict output means heavy finanoing and that is against the metal. .For some time
the controlled price of American copper was T 8 cents a lb, it was subsequently reduced to 14 cents and a day or two ago there was a further reduction to 13 cents, and it remains to be seen if the low quotation will stimulate consumption. With the price of copper low interest attaches to information about cartels, collected by the London “Mining Journal.’’ In Germany there is a law against the improper economic use of a cartel, and in the U.S ! . cartels are illegal, but there is no restriction in the U.S. regarding sales abroad.
But this does not allow the American consumer to escape the effect of high prices of copper abroad because home prices must approximate to them. The U.S. is the principal copper producer and was able to maintain the high price of 18 cents per lb by curtailment of production and some of the largest mines were restricting their output Iby 40 per cent. Nearly 20 per cent of the world’s output of lead excluding the U.S. production is produced at a cost of £2O a ton.
The U.S. is excluded owing to the tariff on lead which enables its producers to sell at about £9 a ton over the world’s price. It is claimed that to some extent the weakness of metals is due to the recent Naval Conference in London, and the pact between Great Britain, the United States and Japan to reduce Naval tonnage, but the depression in world trade is the most potent factor in the situation. The price of silver has fallen also and while at one time it was selling at 24 to 30d per fine ounce it is now realising 21d and this appears to be due to the fact that that most countries have demonitised silver, and as the Irving Trust Coy. of New York points out this is a factor which complicates the problem of trade depression. China has been on the silver standard for several thousand years and it would seeTn highly improbable that her immense population can be put upon a gold or gold exchange standard by mere degree. Even in India where such a programme was undertaken three years ago, the currency question offers latent complexities, the full economic effect of which is only beginning to be discerned. Although several million ounces of silver have been solid by riio Indian Government since 1926, visible stocks there have actually increased as a result of hidden hoards coining into the market.
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Hokitika Guardian, 14 May 1930, Page 7
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802WELLINGTON NEWS Hokitika Guardian, 14 May 1930, Page 7
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