N.Z. copper price ‘unacceptable’

Press, 30 May 1981, Page 19

N.Z. copper price ‘unacceptable’

There is an unacceptable divergence between the price that can be obtained for copper-based scrap in New Sealand and the world ruling price for such materials, according to the New Zealand Metal Merchants and Processors Association. The association, which represents 77 companies and individuals trading in scrap metals, maintains that the unnatural limiting of the scrap price in New Zealand is unfair to all sections of the industry except the processor.

These comments have been made in the association’s submissions to the Commerce Commission, which is inquiring into the prices of copper and copperbased materials. The association said that without a satisfactory price, there was little or no incentive to purchase or collect the scrap for reprocessing. The unduly low price benefited the processor of the copper scrap. If New Zealand scrap was sold at the same price as in Australia or the United Kingdom the price would increase 21 per cent.

McKechnie Brothers (N.Z.). Ltd. which had a monopoly position in the New Zealand market, had been able arbitrarily to alter the price structure by immediate notice without reference to the

world price, it was subimited.

“McKechnie and other major scrap processors have a number of buying practices that treat scrap sellers selectively or are regarded by merchants as unfair.” As an alternative to the present unsatisfactory position where the market was dominated by a small number of processors and protected by the Government’s embargo on the export of copper and copperbased materials there should be either an open export market, or a price formula related to the world price.

Submissions to the commission by the Department of Trade and Industry stated that the export embargo on copper and copper-based materials was intended to conserve an essential industrial metal for which there were no indigenous supplies.

The embargo was reviewed by the Examiner of Commercial Practices in 1978.

The department said the Examiner found the purchasing of copper scrap to be restricted to a limited range of buyers. However, he was satisfied that these buyers were purchasing in competition to each other and no evidence of collusion or restriction on purchasing had been discovered.

“The Government has tended in the past to favour the status quo as being in the national interest ... a lower price for the trading of scrap is accepted to be advantageous to cash flow.

“However, the Government is concerned to see that no partv is unfairly disadvantaged by the system. This was the reason for the inquiry,” said the department.