METALS: Climbing Prices

In Park City, Utah last week, people were hustling about with a vigor not seen in two years. Old residents were returning because United Park City Mines Co. was reopening its big lead and zinc deposits. The mines were shut down in 1952 for lack of demand, and half the population of 4,000 had left town.

The decision to reopen the mines was the result of the Administration’s announcement last month of a sharply increased stockpiling program for both lead and zinc. There was hope that Government buying would raise the price of lead by 1¢ to 15¢ a lb., and of zinc a penny to 12¢. Western mining experts thought this would be enough to bring reasonable prosperity to their depressed industry, cause the opening of additional mines. Already the price of both metals was up ½¢.

The stockpiling was not the only reason for the price improvement. Increased demand from industries climbing out of their recession had boosted the price of lead from 12¢ last February to 14¢ before the stockpiling started. Other metals were moving up steadily, too. This week the Bureau of Labor Statistics announced that its nonferrous index was up to 125.1 last month, from 118 in January (1947-49: 100).

The biggest jump was in mercury, which has soared over 85% from the January low of $187 for a 76-lb. flask. Last week mercury rose another $4 to $6 a flask, causing one veteran trader to complain that “the market’s just plain crazy.” But there was a reason: producers were not running their mines full tilt to take care of big new demands for the metal (e.g., in the atomic field) for fear that the demand would disappear while they were spending a lot of money expanding. But when the Administration recently guaranteed the producers a fixed market over 3½ years for 200,000 flasks at $225, the mines began stepping up output in a hurry (e.g., New India Mining & Chemical, biggest U.S. producer, up 60% in a few months). As more mines start up, the Government thinks that the price will steady.