Business: The Squeeze in Copper

The nation's copper industry last week was caught in the tightest squeeze of its history. Warning that inventories were depleted "almost to the vanishing point," three leading trade groups hammered on Washington's doors asking for a personal meeting with the President. They wanted him to release 100,000 tons of stockpiled Chilean copper, summon a special session of Congress, if necessary, to do so.

Since by law the President can release copper from strategic stockpiles only after declaring a national emergency (which legally requires either war or a threat of war), a special session would be needed to amend the law and free the copper. There seemed small chance of one. But there was no doubt that the industry was in deep trouble. Some 30,000 small manufacturing plants, employing 850,000 workers, faced the possibility of closing at the end of the month unless they could get more brass and copper mill products. A shortage of copper had already curtailed construction in Minneapolis, was threatening to pinch thousands of metal fabricators. The shortage, already acute, was made even tighter by last month's devastating floods in the Northeast, normally a heavy production center.

Grey Market. The U.S. has been using copper at the rate of 1,500,000 tons a year, importing about 20% of the total. But a 43-day strike last summer by the Communist-dominated Mine, Mill & Smelter Workers cut the national supply by 80,000 tons. Meanwhile, the West European boom had turned England, France and West Germany into high-bidding competitors for the international copper supply. The price of copper, which stood at 12¢ a Ib. at the end of World War II, shot up to 43¢ on the official market. Last week the unofficial grey-market price of copper in the U.S. was up to as much as 54¢ a Ib. However. U.S. producers, fearful of pricing their product out of the market and inviting a risk of substitute metals, e.g., aluminum, some 18¢ cheaper a Ib., were trying to hold the price at 43¢.

As a result, the U.S. has been losing its foreign sources of raw copper. Last month, as West European buyers offered prices 5¢ to io/ higher than the U.S., Chile, normally the U.S.'s biggest single foreign source, began sending most of its production to Europe, instead of to the U.S.

Silver Substitute. The copper shortage may soon start pinching many areas of the surging U.S. economy. The generation and distribution of each new kilowatt of electrical power requires 115 Ibs. of copper, and to date the only completely satisfactory substitute is silver, costing 90¢ an ounce. Copper is essential to automobile production; each new car takes an average 24 Ibs., or a total of 10% of all the copper used in the nation. U.S. builders are putting more copper than prewar into home construction, and the average $20,000 copper-wired, copper-piped house uses about $400 worth of the metal.