Strong Copper

Copper, ancient of metals (its tin-alloy, bronze, having given its name to the prehistoric Bronze Age), opened the year 1929 in a flourishing, a prosperous condition.

The price of copper last week reached its highest point in the last nine years. Copper for export was quoted at 18 1/4-c- per pound, domestic copper at 18-c-. Copper had been steady at around 15-c- since October.

Coincident with copper's rise came a 5% wage increase for workers in Anaconda, Phelps-Dodge and other copper companies in Arizona, Utah. Also, Anaconda raised its dividend rate from $6 to $7--Anaconda's third dividend rise in the past year.

Supply & Demand. The pleasing posi-tion of copper may well be contrasted with the less pleasing position of oil. Oil has notably suffered from overproduction. Copper has neatly adjusted its supply to its demand.

In October, North and South American copper producers, who produce about 80% of the world's supply, had an output of 149,200 tons of refined metal. The domestic demand in October was 100,400 tons, and 54,992 tons were exported. In November the output was 155,448 tons while domestic plus export demand totaled approximately 149,000 tons. Consumption has so closely equalled production that on Dec. i, reserve stocks of refined copper were down to 52,153 tons-less than a two-week supply. Nearly every U. S. copper refinery is running at capacity, domestic demand shows no lessening, and though exports declined during the latter part of 1928 it is believed that the present year will see a considerable increase in foreign buying.

Earnings. The most tangible proof of copper's prosperity lies in the earnings of the copper companies, nearly all of which showed 1928 earning increases (first nine months) of 46% to 600% over the corresponding 1927 period. Anaconda paid a $3 dividend in 1927, $4 in 1928 (now on a $7 basis); Kennecott paid a $5 dividend in 1927, $8 in 1928; Andes, no dividend in 1927, $3 in 1928; Phelps-Dodge, $6 in 1927, $10 in 1928. Total copper earnings for 1928 increased approximately 80% over 1927.

Customers. Chief purchasers of copper have been makers of electrical equipment, public utility companies, and the automobile and building industries. The following table (1927 figures) shows leading copper customers (in tons):

Electrical manufactures 196,500

Light and power lines 103,000

Automobiles 99,000

Telephones, telegraphs 93,000

Wires, rods 49,000

Buildings 46,100

Bearings, bushings 41,500

Valves, pipe fittings 21,000

Three large and comparatively recent copper customers are the makers of radio sets, of washing machines, and especially of electric refrigerators. Total U. S. copper consumption in 1927 was 834,550 tons, or 14.15 pounds of copper per person. With the automobile industry planning to produce 3,000,000 cars and trucks during the first six months of 1929, with 1929 building expected to exceed 1928, and with various proposed railway electrification projects, copper demand should steadily increase.

Production. In 1927, U. S. copper refineries produced 1,257,445 tons of copper, about 70% of the world total. U. S. and South American (mostly Chile) refineries produced 1,477,332 tons and the world production was 1,748,932 tons (chief foreign refiners were Germany and Japan). In the first eleven months of 1928 the U. S. refineries turned out about 1,500,000 tons.

Companies. Leading U. S. copper producers are Kennecott and Anaconda. The Kennecott corporation is the largest copper producing organization in the world,* though the mines owned by the original Kennecott company produce less than 8% of the present production of Kennecott and its subsidiaries and associates. The two large children of the small Kennecott parent are Utah Copper Co. (Guggenheim) and Braden Copper Mines Co., located in the Province of O'Higgins, Chile. In 1927 these companies produced 235.358 tons of copper, about 13 1/2% of the world's total production. Other companies indirectly controlled produced an additional 179,636 tons. Selling agent for Kennecott is Guggenheim Bros. A Kennecott director and member of the finance and executive committees is Solomon R. Guggenheim. Kennecott's aggregate net income for 1925, 1926 and 1927 was $79,722,605.

Anaconda originated and centres in Montana, owning more than 3,300 acres of copper mines in and around Butte. It has recently received much publicity through litigation with W. A. Clark over title to various Montana copper properties (TIME, Sept. 3). Anaconda also has large foreign properties, notably the Chile Copper Co., acquired in 1923 from the Guggenheims and said to possess the largest copper deposit in the world; the Andes Copper Mining Co., also in Chile, and extensive zinc and lead holdings in Poland and Silesia. An extremely important Anaconda subsidiary is the American Brass Co., the world's largest manufacturer of brass products. In 1927, Anaconda and its Chile companies together produced 297,541 tons of copper.

*American Smelting & Refining Co. is the world's largest smelting and refining organization, but is interested in lead and silver as well as in copper, and smelts and refines much ore produced by Kennecott, Phelps-Dodge, Utah and other copper concerns.