Commerce, Mining, & Finance

Evening Star, Issue 22620, 12 April 1937, Page 6

Commerce, Mining, & Finance

SHARE MARKET

DEARER STEEL ADVANCE LIKELY IN JUNE WARNING TO LARGE USERS A. substantial rise in steel prices on and after June 1 is almost certain, according to a correspondent of the ‘Financial News,’ London. It is understood that the railways and other big users have been advised by makers of a prospective rise, to take effect after May .31, three months’ notice having been given under a special clause inserted in contracts some nine months ago. The advance will apply on material supplied after the specified date, even if covered at existing prices under the present contracts. It will apply to all consumers, and, though the amount is not certain, it will be at least 10s a ton. INCREASES IN COSTS. Heavy steel prices were advanced by amounts up to 12s 6d a ton on May 29 last. This was the first official scaling up since 1929. It was understood, at the time, that the associated steel makers obtained permission to raise prices rather more than they had requested. The extra margin was granted on condition that prices would not be altered for at least a year. This was to assist in carrying out the Government policy of maintaining a stable price level. Since then, prices of scrap and pigiron, the two main raw materials, have been subject to heavy advances. The wages burden has slightly advanced, and the operation of equipment on the efficiency margin to meet the tremendous demand has also added to costs of production. The prospect of a substantial rise in steel prices has, therefore, been expected for some time. FALL IN SCRAP IMPORTS. Pressure for delivery of all kinds of steel products is running at a very high level, and the announcement of the defence programme gave an increased impetus. There is a developing shortage of melting material. Net scrap imports in January were only 2,000 tons, compared with an average of about 90,000 tons a month in 1936. There is little or no prospect of bringing scrap from America, the source of most of the imports last year. The United States price at 21dol a I>on is far above the British price level. Apart from price barriers, there is the fact that United States steel mills are drawing away all available supplies. rig-iron production is proving difficult to increase owing to ore and coke scarcity, added to a lack of a margin of useful plant capable of being put in order. The whole situation is causing a condition of strain in iron and steel markets, and large consumers, like the railways and the shipbuilding yards, are meeting difficulties in getting enough material to cover their needs.

IRON FROM SAND Commenting on an announcement recently made by the Japanese Minister for Commerce, Mr Godoh, that in order to ensure stabilisation of Japan’s iron manufacturing policy arrangements have been made to purchase from Germany the rights to_ manufacture iron directly from iron sand through a modernised process which is under experiment at Krupps, the Calcutta ‘Capital’ says: “This shows that Japan is fully alive to her dependence upon other countries for her metallic requirements. Commercially great in many respects, Japan is nevertheless almost a pauper in basic metals, and she is periodically made to realise this if and when, as now, a shortage of basic metals threatens. There is not only the purely commercial aspect of the matter, but with the military party in almost undisputed control in Japan armaments are apt to overshadow the legitimate requirements of industry. It is claimed that the new German process results in a product containing 98.5 per cent, of pure steel. The rest of the world, and India especially, who is at the moment not a little interested in steel, will watch this experiment with great interest.”

RUBBER CONSUMPTION EXPANSION LAST YEAS Consumption of rubber in the past year has been stimulated by the rearmament programmes being carried through by almost every country, says Messrs George White, Yuille, and Co., in its rubber market review for 1936. They add, however, that improving conditions, combined with, or perhaps as a result of, international financial agreements, have undoubtedly led to a much larger use of rubber for normal purposes. This is particularly the case in the United States.

The reduction in stocks in the latter part of the year led to a shortage of actual rubber for early use, which affected the relationship between the price of spot and forward rubber. Forward rubber usually commands a premium over the nearer positions, but lately the forward positions have not only lost the premium, but they have been at a discount. Such a development is normal in a commodity market when supplies in the future are expected to be on a more liberal scale. FACTS FOR INVESTORS INTEREST RATES In his address to shareholders of the National Mutual Life Assurance Society at its annual meeting in London on February 24, the chairman (Mr J. M. Keynes) discussed the market rate of interest. An immediate consequence for the society of the low rates which have Jong prevailed was a decision to strengthen the valuation basis by reducing the assumed rate for the present valuation from 3J per cent, to 3£ per cent. Mr Keynes agrees that the sums which the Government proposes to borrow for the purpose of rearmament are well within the capacity of the country, particularly, he thinks, if as much of the expenditure as possible is directed to bringing into employment the unused resources of the special areas, and he also sees no justification in the years to come for a lung-term rate of interest higher than 3 per cent., and he thinks indeed that it should be lower.

BASE METAL PRICES FACTORS CAUSING ADVANCE SYMPATHETIC RISE IN Till “ How long will the rise in base metal prices continue?” This question is asked in the metal review issued by A. Strauss and Co. Ltd., London, last month, “ Statistical experts,” it says, “point out that the potential production of the base metals exceeds by a considerable margin the potential consumption. That mny„be true, but statistical experts cannot take account of the psychological aspects of the problem. Unfortunately the course of metal prices does not react mathematically to any rational principle. The major influence affecting the price of a metal over a short period is not its statistical position but the outlook of consumers. “If consumers are enjoying good trade, as they are at the moment, or, more particularly, if they have' actual or prospective orders on their books which will keep them_ busy for a year ahead, then irrespective of all statistical probabilities, they will enter the market and cover their requirements. And if they all do this together and purchase a year’s supply during a period of three months then the price will rise and maybe remain high during that period, regardless of the statistical position of the metal. “ This is what happened on the Metal Exchange in February. Tin, however, was indirectly, and not directly, affected, for except for one day in which there was substantial buying from America, consumers have not been prominent in the market. The price of tin rose by reason of that most irrational of all factors—sym-' pathy with the other base metals.”

THE SEARCH FDR GOLD MOSSY CREEK The Mossy Creek return was 270 z sdwt from 7,714 yards for 123 hours’ work. WAIPAPA BEACH Messrs W. A. Mitson and Co., secretaries of the Waipapa Beach Gold Dredging Company Ltd., report advice of a wash-up of 560 z Idwt for 132 hours’ dredging. NEMONA The following is the Nemona Gold Dredging Company’s return for the week ended April 9: —Yield, 71$oz; hours dredged, 127; yardage treated, 16,000, ARGO The return of the Argo Gold Dredging Company Ltd. for the week ended April 10 was 88oz for 136 hours’ dredging. The yardage treated was 13,000. BIG RIVER The (Big River Gold Mines Ltd.’s report for the week ended April 6 is as follows:

Repairs carried out in Nos. 1 and 4 levels. No. 5 intermediate north drive was advanced 12 feet through mixed stone and country rock. In the No. 5 level, south drive, three feet of stone was stripped off for nine feet on the footwall side, which was timbered up to the face, backing-up sets being placed so that a winze could be sunk on the hanging wall side. About four feet of stone was showing in the face. Twenty-five tons and a-half of stone were delivered to the surface bins.

MATAKI DREDGING YEAR DIFFICULTIES IN INDUSTRY. A net profit of £2,292, against £4,010 in the previous year, is shown in the accounts of Mataki Gold Dredging Limited for the year ended December 31. The company is operating an area near Murchison. Two interim dividends of one penny a share were paid during the year, absorbing £2,812. Income tax for 1935 required £55, and £1,968 is carried forward, against £2,543 brought into the accounts. The reserve fund, which now amounts to £3,375, was maintained at the normal rate of £2O a week. The directors state that the value of the ground at present being worked had resulted in poor returns since the beginning of the year, but they were hopeful that before long a distinct improvement would be shown. During the year the yardage showed a substantial reduction, being 416,548 yards, as compared with 695,934 yards in 1935. The gold won amounted to 1,7130 z (1,9720 z in 1935), whicli realised £13,808. During the first half of the year the weekly returns were satisfactory. Unfortunately, the latter half was marked by a succession of heavy floods, which caused silting and completely altered the outlook. The amount paid in gold tax was £1,060. The directors again make a protest against the retention of “ this iniquitous levy upon capital.” The tax paid by the company last year was equivalent to 7.6 per cent, of' the total gold produced, 41.2 per cent, of the dredge wages, and 46.2 per cent, of the net profit. After mentioning the effects of the materia] increase in wages and overtime as a result of recent legislation, the directors express fears that if a 40-hour week, now being sought by the employees, is imposed upon the industry the advisability of closing down will have to be considered.

SYDNEY STOCK EXCHANGE Press Association—By Telegraph—Copyrigl/ SYDNEY, April 10. Bonds: 4 per cent., 1938,, £lO2 ss--1941, £lO2 15s; 1947, £102: 1955’ £lOl 15s; 1961, £IOO ss. Shares: Commercial Bank of Sydney, £22 19s; Tooth’s, 56s Gd; Anthony Hordern, 20s 6d; Associated News, 23s Gd; Broken Hill Proprietary, 83s 3d; Electrolytic /inc, 60s (pref., 61s Gd); General Industries, 20s lOffd*

FOREIGN EXCHANGES ON NEW ZEALAND CURRENCY BASIS The Bank of New South Wales, Dunedin, quoted the following rates for purchase and sales of foreign exchanges (all rates subject to alteration without notice): — Buying. Selling. London—

DOLLAR RATES. The Associated Banks (other than the Bank of New South Wales) quoted the following dollar rates to-day on a New Zealand currency basis. They are subject to alteration without notice: — U.S.A. Canada. (Per £1 N.Z.) (Per £1 N.Z.) SELLING— T.T.. (dol) ... ... 3.92 J 5.921 O.D. (dol) ... ... 3.954 3.92$ BUYING T.T. (dol) 3.96$ 3.95 J O.D. (dol) ... ... 3.97| 3.97

AMERICAN WINTER WHEAT Press Association—By Telegraph—Copyright WASHINGTON, April 9. The Government Crop Reporting Board has predicted a winter wheat crop of 656,000,000 bushels, the largest since 1931. Although this is 33,000,000 bushels above the five-year average, it is offset by the fact that stocks on farms are 56,000,000 bushels below the average. TREASURY BILL TENDERS (British Official Wireless.) Press Association—By Telegraph—Copyright RUGBY, April 9. The total amount applied for in tenders for £40,000,000 Treasury bills was £75,320.000. The average rate per cent, for bills at three months was 10s 10.27 d against 10s 10.80 d last week.

COTTON, RUBBER, ETC. Press Association—By Telegraph—Copyright LONDON, April 10. Friday’s closing prices were: — Cotton, 7.87 d, 7.God. Rubber.—Para, not quoted ; plantation smoked, 12id. •lute.—April-May, £2l 10s. Copra.—April-May South Sea. 19d; smoked, lS:]d ; plantation, Kabaul, 20d. Linseed oil, £32 r«. Turpentine, 39s 9d.

DUNEDIN STOCK EXCHANGE The market was fairly active this morning, with business recorded in practically all sections. Bank of New Zealands had a transaction at £2 4s, sellers quoting £2 ss, as against buyers £2 3s 9d when the market closed. National Insurance had business at 18s, no quotations being recorded in this section. The Australian mining section was active, with a good demand for Mount Lyells and the ordinary issue of Electrolytic Zincs, Mount Morgans had a reported sale at 17s 6d, while North Broken Hill changed hands at £3 17s 9d. Local gold mining remained quiet, whlie there was a good inquiry for Government stocks. SALES REPORTED. P. and O. Stock (odd 1011, £2 12s 6d. Westport Coal, £1 3s 6d. Mount Morgan, 17s 6d. North Broken Hill. £3 17s 9d. Taranaki Oil, 4s lid. SALES ON ’CHANGE. National Insurance, 18s. New Zealand Refrigerating (paid), 19s 6d (two), AFTER CALL. Bank of New Zealand, £2 4s. North Broken Hill, £3 17s 9d.

WOOIWORJHS (W.A.) FINAL DIVIDEND DECLARED The Dunedin Stock Exchange has been advised that Woolworths (West Australia) has declared a final dividend for the year of 10 per cent.

DIVIDENDS DUE Amalgamated Zinc (de Bavays)-Half-yearly, 2£ per cent. ... Apr. 13 David Jones, Sydney half-yearly, Ist pref., 6 per cent, per annum; 2nd pref., per cent, per annum; ord., 10 per cent, per annum Apr. 14 Ronpibon Tin—Pref., 2s a share Apr. 15 Yarra Falls Co. Ltd.—lnterim, 5 per cent Apr. 15 G. J. Coles —Interim quarterly, 9d a share Apr. 15 Woolworths (N.Z.) Ltd.—lnterim, 4i,por cent, on paid-up prefs. Apr. 15 South British Insurance—lnterim, Is 4d per share Apr. 22 Denton Hats Ltd.—lnterim, 3d a £1 share , Apr. 23 Drug Houses of Aust.—lnterim, 3 per cent ... ... ... Apr. 30 United Provisions —Interim preference at 8 per cent, per annum Apr. 30 North Kalgurli (1912) Ltd.—lnterim, 6d sterling a share ... Apr. 30 Associated Newspapers—lnterim, pref. and ord., 2 per cent. ... Apr. 30 E.S. and A. Bank—lnterim, 3J> per cent, (sterling) May

THE OVERSEAS MARKET ACTIVITIES DURING MARCH Reviewing the overseas market for last month,, the latest issue of the Official Record of the New Zealand Stock Exchange says, that o,n the London Stock Exchange interest in gilt-edged securities languished, while the frenzied activity in base metal shares lasted. Industrials also were quiet, and trading in irons and steels was discouraged by the removal of the duty on pig iron. The spurt in metals is attributable to the increase in American consumption and to rearmament. Rubber shares, which were receiving good! support at advanced prices, were in stronger demand following the announcement of the increase in the percentage of basic quotas. Russian and American buying was largely responsible for the price increase. American early re-entry into the market is not unexpected, as the stocks of her consumers are low. British Board of Trade returns show substantial increases in imports and exports for February, 1937, compared with February, 1936. The figures are as under; — 1937. 1936. Imparts ... £71,652,000 £62,316,900 Exports ... £38,572,000 £35,110,500 The principal increases compared with February of last year were:—lmports: Grain and flour, £3,881,000; nonferrous metals, £1,043,000; wood and timber, £811,000; wool, raw and waste, £813,000; and in exports—Beverages, £593,000; iron and steel and manufactures, £588,000. The main decreases are:—ln imports—Dairy produce, £746,000; and in exports—non-ferous metals, £IOB,000. LONDON METAL MARKET. Spectacular rises in base metal prices were, witnessed on the London Market, and it was reported that the total turn-over of the four base metals in. one day represented £1,500,000. The inevitable reactions from the highest points took place, but as we go to press before Easter prices for copper, spelter, and tin are well above opening rates. Copper reached its highest level since 1929 (£97 12s 6d); lead its highest since 1925 (£43 10s) ; spelter highest since 1926 (£39 3s 9d) ; and tin highest since 1927 (£319 12s 6d). Price movements were as set out hereunder : IVlcv March Price 26/2/37 Highest Lowest 22/3/37 Copper fist 9 4J 78 2 6 66 7 6 69 15 0 Lead ... 31 16 3 36 7 6 31 13 9 30 17 6 Spelter 29 16 3 37 0 0 29 7 6 30 5 0 Tin ; ... 347 0 0 311 5 0 243 15 0 383 5 0 Gold and silver fluctuated within narrow limits.

DAIRY PRODUCE THE LONDON MARKET [Per United Press Association.] WELLINGTON, April 10. The following information has been supplied regarding the London markets by the Primary Products Marketing Department, which has received a cablegram from London : \ Butter.—New Zealand salted, 100 s to 102 s, and up to 104 s; unsalted, 102 s to 104 s. Deliveries in New Zealand, 2,763 tons; in store New Zealand, 5,944 tons The butter market closed firm after heavy buying earlier in the week. Retail price Is. Cheese.—New Zealand white, 66s to 675; coloured, 66s to 675. Deliveries, New Zealand, 18,603 crates; in store, New Zealand, 90,035 tons (including 9,267 crates on board Napier Star.’

100 stg. N.Z . T.T. £124 £124 10/ O.D. £125 10/ £124 8/9 Australia— £A to £100 ' N.Z. ... O.D. £101 £100 10/ Fiji£F to £100 N.Z. ... ... O.D. £90 7/6 £89 New York— Dollars to £1 N.Z. ... ... ... T.T. 3.9542 3.9279 O.D. 3.9630 3.9529 Montreal — Dollars to £1 N.Z. ... T.T., 3.9600 3.9251 O.D. 3.9725 3.9301 Austria— Schillings to £1 N.Z T.T. 20.63 O.D. ; 20.65 Belgium— Belgas to £1 N.Z. ... T.T. 23.232 O.D. — 23.243 Czechoslovakia— Crowns to £1 N.Z ... T.T. 111.85 O.D. — 111.90 Denmark— Kroner to £1 N.Z ... T.T. 18.204 17.894 O.D. 18.264 17.904 France— Francs to £1 N.Z ... T.T. 87.55 O.D. — 87.59 Germany— Reichmarks to £1 N.Z ... T.T. ■ — 9.725 O.D. — 9.730 Holland— Florins to £1 N.Z.,, ... ... ... T.T, 7.294 7.144 O.D. 7.354 7.148 Italy— Lire to £1 N.Z. ... T.T. 74.63 O.D. — 74.68 JavaFlorins to £1 N.Z ... T.T. 7.261 7.101 O.D. 7.321 7.105 Norway— Kroner to £1 N.Z ... T.T. 16.182 15.892 O.D. 16.242 15.902 Sweden— Kroner to £1 N.Z ... T.T. 15,787 15.492 O.D. 15.847 15.502 Switzerland — Francs to £1 N.Z. ... .... ... T.T. 17.488 17.218 O.D. 17.593 17.223 Noumea — Francs to £1 N.Z ... T.T. 86.18 O.D. — 86.24 Papeete— Francs to £1 N.Z ... T.T. 86.33 O.D. — 86.39 Hongkong— N.Z. pence to 1 18 51-64 dollar ... . .. T.T. 18 19-64' O.D. 18 17-64 18 25-32 India and Ceylon— N.Z. pence to 1 rupee T.T. 22 3-8 22 21-32 O.D. 22 11-32 22 41-64 Japan— N.Z. pence to yen 1 .. T.T. 17 31-64 O.D. — 17 15-32 Shanghai— N.Z. pence to dollar ... . 1 .. T.T. 17 7-8 18 3-8 O.D. 17 27-32 18 23-64 Singapore— N.Z. pence to dollar ... . 1 .. T.T. 34 23-32 35 13-64 O.D. 34 5-8 35 3-16

Quotations as under:Buyers. Sellers. £ S. d. £ S. d. BANKING— New Zealand ... .. . 2 3 9 2 5 0 Commercial ... 0 19 6 0 19 7 Commercial (pref.) ... S 4 0 — E.S. and A 6 9 0 6 12 C National of New Zealand — 3 8 0 National of Australasia (cont.) 7 140 — Union of Australia Ltd 11 5 0 11 7 0 SHIPPINGHuddart Parker (ord.) — 2 0 0 P. and 0. Deferred Stock 2 3 0 . U.S.S. Co. (pref.) ... 1 6 3 1 7 0 MEAT PRESERVING— N.Z. Refrigerating (cont.) 0 8 10 — Southland Frozen. (paid) 3 13 6 3 16 0 Southland Frozen (pref.) 3 13 6 — LOAN AND AGENCY— Dalgety — 11 3 0 Mortgage Corporation 3j| p.c. Stock ... — 98 10 0 National"Mortgage ... — 2 15 0 National Mortgage (“ B ” Issue) . ... 1 10 0 — N.Z. Loan and Mcrcantile (ord.) 48 0 0 ■ —. N.Z. Guarantee Corporation ... ... ... — 0 5 3 N.Z. Guarantee Corporation (rights) ... 0 1 7 — Perpetual Trustees ... — 3 4 0 Wright, Stephenson (pref.) ... — X 0 s GOAL— Westport. 1 3 0 1 4 0 W estport-Stockton (ord.) ... ... ... 0 1 10 — WOOLLEN COMPANIESRruco (ord.) 0 13 0 Kaiapoi (ord.) 0 14 2 — Kaiapoi (cont.) 0 5 0 — Mosgiel 10 0 0 — MISCELLANEOUS— Anthony Hordern ... — 1 1 0 Associated News (pref.) —- X '3 9 Australian Iron and Steel ... — X 7 6 British Tobacco ■ 2 12 0 Broken Hill Proprietary — 4 3 0 Broken Hill Proprietary (cont.) 3 5 0 3 7 0 Brown, Ewing (ord.) 1 0 0 — Brown, Ewing (pref.) 1 2 6 — Consolidated Bnck ... — 0 9 6 D.I.C. (ord.) 0 16 6 — D.I.C. (pref.) *1 3 9 — Dominion Fertiliser 1 3 9 1 4 3 Dominion Rubber ... 1 13 0 — Dunlop Perdriau Rubber ... 1 0 9 G. J. Coles 5 0 0 5 1 0 Hume Pipe 1 0 2 1 0 4 Milburn Lime and Cement 1 17 0 2 0 0 National Electric 0 13 0 0 14 6 N.Z. Drug Co — 3 16 0 N.Z. Farmers’ Fertiliser ... ... ... 0 19 0 ‘ Otago Daily Times ’ — 2 7 6 Regent Theatre — 0 1 0 6 Shillings Ltd. 0 15 0 17 0 Wilson’s N.Z. Cement — 1 16 0 Woolworths (ord.) ... 7 7 0 — Taranaki Oil 0 3 8 — BREWERIES— Now Zealand 2 19 3 2 19 9 Staples’ — 1 16 0 UNLISTED STOCKS— MTntosh, Caley, 9 Phoenix ... 0 5 0 0 0 Woolworths (Sydney, ord.) 7 4 6 Woolworth (Sydney, rights) 4.11 6 — OVERSEAS MINING— Broken Hill South (5s) ...' 2 12 0 Electro; Zjinc (pref., .1 £1) 6 6 Electro. Zinc (ord., 9 £1) 2 18 9 2 19 Mount Lyell (£11 ... 2 5 9 2 6 0 Mount Morgan (2s 9 6d) — 0 17 North Broken Hill (5s) 3 17 0 — Placer Development — 5 7 0 Rawang Tin (10s) ... — 9 0 12 5 Austral-N.Z. Mining 0 10 — GOLD MINING— Big River (Is) — 0 2 1 Clutha River (2s) ,., 0 2 3 — 8 Gillespie's (Is) 0 1 6 0 1 King Solomon (Is) ... — 0 0 9 Molvneux River (2s) 0 2 3 — Nokomai (5s) 0 2 3 0 2 6 Okarito (Ss) 0 3 4 — Paddy's Point (5s) ... — 0 2 3 Skippers (Is) . ... 0 — 0 0 4 Waipapa Beach (Is) 0 7 0 1 0 Waitahu (5s) — 0 2 6 N.Z. GOVERNMENT LOANS— 34- p.c. Stock, Nov., 1938-52 101 10 0 — 34- p.c. Stock, March 193943 — 100 10 0 3V p.c. Stock, March, 1941-43 100 10 0 — 34 p.c. Stock, Sept., 1941-43 100 10 0 _ 34 p.c. Stock, May, 1941-52 101 10 0 5* p.c. Stock, Nov., ‘1941-52 101 10 0 — 4 p.c. Bonds, 1943-46 102 0 0 — 4 p.c. Stock, 1943-46 102 0 0 — 4 p.c. Bonds. 1946-49 102 10 0 4 p.c. Stock. 194649 102 10 0 4 p.c. Bonds, 1952-55 102 10 0 4- p.c. Stock, 1952-55 102 15 0 3 p.c. Bonds, 193941 96 0 0 — 34 p.c. Stock, 1953-57 99 0 0 *Cura div.