Commodities: Steady

Wars and rumors of wars usually cause commodity prices to rise. In the first 60 days of the Korean war, commodities went from 146.53 to 179.54 on the Dow-Jones commodity futures index. The current Mideast crisis has brought no such rise. In the two weeks since the Iraqi coup, the index actually eased down from 156.64 to 156.63. Said R. G. Patterson, director of Lamson & Sessions Co., a Cleveland metal fabricator: "We see no signs of scare buying. Nobody is excited."

Businessmen realize that the U.S. industrial scene has changed radically since 1950. At that time the shortages of World War II had yet to be made up, capacity was straining to keep up with civilian consumption, and there were no stockpiles. Today there is excess capacity in every basic industry, and the Government, whose stockpiles are brimming, is retiring as a customer for most strategic materials. Items:

P: Copper, now being produced at 950,000 tons annually, has an excess capacity of about 350,000 tons; moreover, producers hold high inventories of refined copper. Government guarantees for 120,000 tons have a ceiling price of 28-c- per lb., which will probably act as a barrier to any major price rise.

P: Aluminum production is being cut back because of excess capacity of 600,000 tons. Government "put" orders, which take about 200,000 tons a year from the market, are about to expire, releasing even more capacity.

P: Nickel surpluses already total 180 million lbs., and current demand could double without a production increase. International Nickel, which dominates the industry, is holding prices stable at 74-c- per lb.

P: Lead production has been cut back from 350,000 tons to 270,000 tons a year. Excess stocks, exclusive of Government stockpiles, are currently 100,000 tons. Price increases will not be great because uses for lead are declining.

P: Zinc production is down from 600,000 tons a year to 450,000 tons. The Government is now out of the market; excess stocks of 150,000 tons would permit a rise in demand of 25% without strain.

In sum, U.S. businessmen expect competitive pressures and excess capacity to keep price rises small. The U.S. economy can take the flurries of a foreign crisis in stride.

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