Elusive Shortage

The worried forecasts of a copper shortage began appearing soon after 37,000 workers went on strike in mid-July at companies producing 90% of the nation's domestic supply. Just before Labor Day, no less an authority than Commerce Secretary Alexander Trowbridge gloomily predicted that it would be only "three to five weeks until we reach rock bottom of our supply." As the walkout dragged through its 14th week, the shortage remained as elusive as a settlement.

Hidden Stockpiles. Government and industry alike profess astonishment at the size of stockpiles in the hands of warehouses and fabricators. "Every time we try to get a fix on supplies, the mills seem to have bigger inventories than before," says one Commerce Department copper expert. "Everybody thought people would run out of copper at least three weeks ago," adds Executive Vice President Charles Moore of the International Copper Research Institute, "but no one has."

So far, the walkout has cost the U.S. an estimated 450,000 tons, or 20% of last year's refinery output. As a result, many American buyers have turned to the London market and mopped up the 140,000-ton world surplus that had been anticipated this year. By last week, U.S. buying had driven copper prices on the London Metal Exchange up from 44 1/2-c- a Ib. to 50 1/8-c- a Ib. Most producers are surprised that the price has stayed that low; London copper prices normally gyrate on the flimsiest sort of news and early in 1966 they briefly hit a peak of 98 3/4-c- a Ib. In the U.S., where the prestrike price of copper from domestic mines was only 38-c- a Ib., users are shifting to metal from commercial channels at prices close to those in London. Citing that increased cost, Revere Copper & Brass, the major U.S. fabricator of nonferrous metals, lifted prices of most copper products by 2-c- a Ib.

Sooner or later, if the walkout continues, the pinch will get worse. Although the U.S. produces a third of the world's copper, it consumes a bit more than that. The Government's 259,000-ton strategic stockpile, so far untouched despite the strike, equals less than a year's copper needs for defense.

Spreading Impact. In Utah, where Governor Calvin L. Rampton has twice intervened in the deadlocked negotiations between Kennecott Copper Corp., the nation's No. 1 producer, and the United Steelworkers union, the impact of the strike is spreading. Some equipment and chemical firms have laid off help, and state welfare officials are paying an estimated $4,000 a day to idled workers, including some strikers. Sales have fallen among railroads and truckers, and banks report a substantial drop in the clearings and debits that reflect the pace of the state's economy.

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