New Zambian Copper Price “Serious ”

Press, Volume CV, Issue 31043, 26 April 1966, Page 17

New Zambian Copper Price “Serious ”

(N.Z.P.A. Reuter—Copyright) LONDON, April 25. Higher prices for manufactured goods which use copper are forecast after price changes made in Zambia, one of the world’s major copper producers.

Cars, plumbing, heating, radio and television and electric cables are among goods particularly vulnerable. Sir Jules Thorn, president of the British Television and Radio Manufacturers’ Association, commented on the Zambian decision: “This is going to cost us many, many millions. This is going to be a very serious matter for the entire industry.” Sir Patrick Hennessy, president of the Society of Motor Manufacturers and Traders, said: “We use a large amount of copper in the industry. It will obviously affect our costs seriously.” A building industry spok' > man said that as much as £5O could be added to the cost of a new home. Reduction Expected A reduced demand for copper leading to a fall in the free market rate is expected by trade sources when the London metal exchange opens today. Trade circles believe that this will be the initial reaction to Saturday’s announcement by Zambian producers that they are scrapping their

fixed producer price of £336 a ton and temporarily basing prices on the London future rate which on Friday was £627 a ton. An announcement yester-

day by the Zambian Government of a 40 per cent tax on copper export sales exceeding £3OO a ton was not expected to add to the selling price of Zambian copper on the free market. Based on recent statistics

of copper output in Zambia and the, anticipated free market price in the future, the revenue from the new tax could amount to £som or more a year.

demand for copper will be watched very closely by the British trade and finance ministries. If the demand is maintained at its present rate, increased prices paid to overseas producers would add millions to Britain’s import bill at a time when the Government is striving to reduce overseas trade deficits.

The largest customer for Zambian copper is Britain which takes about 45 per cent of the output. For a year, the world copper market has been under pressure, mainly because persistent labour troubles in Zambia and Chile have ’•egularly halted production. Big copper users have in the past bought about 90 per cent of their supplies direct from the producers—mostly in Zambia, Chile and the Congo—at the special contract rate of £336 a ton. Drop Forecast Experts here are forecasting an immediate drop in the free market price to about £5OO a ton which would align it to the new Chilean rate—increased 10 days ago from its basic £336 to £496. Even at this price, however, users will be faced with the prospect of having to increase prices of manufactured goods which include copper. To what extent—and how quickly—substitution of other substances like plastic or aluminium will reduce the