ECONOMIC DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00457R007400610009-8
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 21
• Document Creation Date: December 19, 2016
• Document Release Date: March 10, 2006
• Sequence Number: 9
• Publication Date: February 15, 1951
• Content Type: PERRPT

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..ebruary 15, 1951.
METROPOLITAN COMMERCIAL CO. LTD.,
HON KONG.
I ;UUidO.iIC ~x a+`~.~; & ki01V6XUa(r "z'~:ttilE
With GOMPli""O
Trend in the Western world will be toward co-ordination in the fields
of production flow, use and price of materials,
Defence Production Board is to,be set up by the (Forth Atlantic count-
ries i,aw Materials board, now on the way, will coordinate buyin and shar-
ins; of strategic materials among `Western industrial countries.
Price controls, to spread out of the Ja, will have to be meshed to-
gether. Britain, for d$cample, won't be allowed to pay more for wool than
the US.
lb- cport and import controls will become a tangled mess unless they are
combed out by an allied authority..
Joint shippint; controls are likely
4lestern haw a7iaterial Allocations
too (US i'ews, 5/1/'51)
The UK, France and the US as the three sponsors of the plan have now,
it s~7.eins, sent invitations to more than 20 countries to form the first six
of the individual commodity groups. It is hoped that some of the graoups
will be in session by the end of this month and that all six will have come
into being, by the be inning of April. ".the first three groups will *be con-
cerned with cotton, wool, and sulphur respectively. A fourth group will
deal with non-ferrous metals _ o r, leaa, and zinc, and the last two
tungsten and
t,ro ups one with ~r- molybdenum and the other with manganese, me-
kel and elwi .
The number. of questions which this information leaves sill unanswered
can doubtless be attributed to the uncertainty still existing; re ;ard.in ; the
attitude of some major producers and possibly to uncertainty about the ac-
tual powers and duties of the groups.
The whole subject of the Powers and-method of operation of the central
group is still unknown and everts the appointment of an American representa-
tive on this group has not yet been announced. (La. 8/2/151)
H!: Br q; ;lo-American Consultations
The US is seeking; an assurance from Britain that American exports to HK
will not reach China. Government consulations are in progress, and British
experts, cooperation with the Co-operation of the Colonial Office, are draw-
in,, up requested safe-guards.
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Officials here said Britain will endeavour to merit the US request 'tut
cautioned that it would be extremely difficult to devise control which would
be 100 percent effective.
exports to China from Britain are well scrutinised and no export li-
censer are given for strategic raw materials and machinery which might
strengthen China'' war potential. But it was unofficially admitted that
trade channels from lit cannot be sufficiently controlled to :prevent the
flow of goods intoo China. Goode are also 1eakinr,; to China, throes near-
by Ida ca o.
Unofficial estimates claim that 25 to 33 percent of IlK's overall fore-
ign trade ultimately finds its into China. - .uritain s trade with TIE I in '19-
~0-'iincluc ed imports from 449 worth .11,19O.U00while exports reached #24 -
1(~, C5 5 `i'his is substantial trade which .i ritin does of went to lose.
S.C.n~.P"~"
ilK Guarantees
US Ready to helax Pmbargo in Return or
Washington, Y b, 15. The US is willinj; to ease tree restrictions on
exports to i:K in return for a guarantee that no American goods will be re-
shipped from HK to China, an authoritative source told'.,euter today.
The difference of opinion on what is We minimum essential require-
ment is apparently one. reason for the extremely slow progress which offi-
cials admit has been made of A p lo-Nrnerican consultations.
American officbls said that additional goods which misht be sent be-
cause. of an agreement reached here could be used in ;:ft.'s normal export .
trade with :southeast Asia - out not with China. (i.T. 15/2/'51)
UK Pressure on Indian Tyre Industry
A state Department spokesman said that he had no knowledge of any core
templated move ta.restriet .merican supplies of strategic material to the
Indian rubber tyre industry..
The spokesman said that if India. were , in fact,. son i~rjx lar~,e ship-
ments to China. he was sure that the Uri would not hesitate to restrict ma-
terial necessary for NW Tndian tyre iaxiustr ( . d.P.13/2~/'S1) . --
Australia, ke striding lxworts of Materials in Short Sup ,3
The Minister of `t'rade and Custom' told the I today that the Austra-
lian Government is restricting exports'of materials in short supply..
The Minister made his statement following a report that Australia had
be ; u r i r e s t a c t i n g the e x p o r t of stratte c materials to UK. - -~ -
Contacted yesterday the A ustralian 't'rade Commissioner, Mr. Wrigley,
said that he had no official knowledge of any restriction of Australian
exports to K. There were, of course, generally restricted exports to
all countries of materials which were in short supply in Australia but
these had existed since the last war. (.Grill'. 15/2/'51)
Australia n exports to HK were limited to a few items of essential indus-
trial the micals and foodstuffs for consumption in 4K41d.)
Sh are Bans he-lit _ports of Textiles & Other lmpartant teriala t~HS
`,the Singapore government has banned the re-export of textiles to HK.
The action was t0 ten to halt activities of some merchants who had imported
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large. qua-tit as of textiles - some of *hich had come from HK - and ship-
ping them back to HK because of much higher-prices.
Singapore authorities also want to be in a position to maintain tex-
tiles re-export trade with Indonesia and neighbouring territories. This
business runs into millions of Straits dollars.annua 11y.
The Singapore government, on Dec. 6, 1950, banned re-export to HK of
iron and steel, including; scrap,. brake fluid and hydraulic oils, and auto
spare parts. It was pointed. out that iron and steel are urgently needed
in Singapore to carr out important government and private building pro-
sects. (H.S. 1572/151)
No Export 13an on Malpyan Rubber to Soviet Union &New-Democracies
The Minister of Colonial Affairs, ivir. Duddel, announced in the House
of Commons that the British vovernment does not intend to impose export
ban on Malayan rubber against Soviet Union and the New Deocracies. The
reason is that it is on this trade that the normal trade ne.Lati.ons between
the British Commonwealth on one hand, and Soviet Union sir.' the New Demo-"
cracies on the. other, depend. He said that the Malayan sxports of rub-
ber to the Soviet Union, China. and Czechoslovakia, consisted only 14p of
the total Malayan exports of rubber. He further remarked that if exports
of rubber to the said countries entered an abnormal stage, there would be
the necessity to study the case; but if the trade develops normally, it
is right to leave it to private enterprises. (W.K.Y.P. 15/2/51)
Rubber for China; Singapore Ban humours Discredited
There were rumours around HK yesterday that Singapore might soon ban
rubber shipments to China, but latest telephonic advices from Singapore
during the afternoon said that a BBC broadcast beamed. to Malaya indicated
that there was no intention to impose such a ban unless the international
situation further deteridrated. (The rumours were spread in the hope
that they might boost. the price for Rubber. - Ed.)
Responsible opinion in dK did not believe that such a prohibition
would be introduced in view of the diffiouJ.ties inAetti.nn all rubber-
sup p to toe the same line in the ina :r- particularly the
Meanwhile, prices were firmer again in Singapore yesterday, quotations
received here during the afternoon for F GB February rubber being 542.26
for Firsts; 5.2.1.0 for Secondq; and Sw2.01 for Thirds. Due to US influ-
ences - the US Likes to buy Firsts - there has been an increase in the
spread between Eirst and Thirds.
Shippos are finding it difficult to get cargo space from Singapore
at the moment in view of the increasing world shortage of shipping; against
present requirements. .($.C.M.P. 14/2/151) (For.detailed information
about export control on rubber, see below, Rubber - Ed.)
US NPA Recommends .Buying; Chinese Bristle
The NPA announced that it will soon make a suggestion to the highest
authorities that the US should buy bristles from Communist China to be used
for defence and other purposes. The ivPA also pointed out that the brushes
made of bristles are essential to maritime equipment, and that China supplid
9(% of American imports of iristles, 01.K.Y.P. 15/2/'51)
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helease of seized US Shipments for HK Rallies Commodity Mart
The market's firm and steady tone was given fresh impetus on reports
of the release of seized American goods originally destined for HK. Op-
timism was evident in the market and dealers were encouraged that the parti-
al release of these shipments would soon be. followed by the eventual clea-
rance of whole shipments, ti?.S. 13/2/151)
HK's Hides Stock low: .i?oreign Demand Heavy ilize to Defence Expansion
Sind'e.the turning of the year the. tanned hides ;kart has been extremely
firm Trade circles indicating that the sharp rise in the hides mart was
due to the following factors: 1)the world's armament expansion; 2) the
market situations existing; now in West :ermany and Japan worth noting.
There huge amount of skins and hides are needed, and the tendency of de-
mand exceeding supply will become even more intensified. 3)The cost
price of raw hides have greatly raised. 4) The low stock in HK. 5)
)foreign enquiries and orders have been daily on the increase. HK deal-
ers have recently received purchasing; orders from Japan, Holland, and
the U$, and there. have been enquird.a.. from the UK, (v/. .Y.P. 14/2'51
China Produce Gen(Ira"11y `t'urn ~l right
Since the new lunar year, nearly all Chinese products have enjoyed
a bright market. twin, to abundant fresh supply, transactions in tung-
oil were active, There was no transaction in teaseed oil due to ex-
ceedingly shortage of supply. European demand for gallnuts and ramie
continued to be strong.
As for groundnuts, price has been continuously rising; due to the
facts that the stocks here are exceptionally low and that foreign firms
actively searched for both spots and forwards. Besides, Siam ourreflt
groundnuts crops have no;fg tnot yet been offered for sale on the market
('r/.-.P. 15/2/i 51)
HK Commodity Market in the h/eek Hnded February 11
China Produce. The local vegetable oil market wis stimulated by
improved 'offers on-the London market; buying offers for woodoil have ri-
sen to #285 per long ton for wood oil,in drums and to #273 per ton for
woodoil in bulk. On the local market unprocessed woodoil climbed to
$248 per picul, while the export quality remained at $255 per net picul.
The price ofteaseed oil was raised to correspond with an increase on the
Canton market the cost
price of fresh supplies gain; 4270 per picul and
local exporters counter-offered #285 per picul, with no transactions tak-
ing place. Aniseed oil advanced to 01350 per picul.. Cassia oil was
quoted at 403100- per picul on a dull market..
Cassia li,gmea continued high in price but with little trading;,
Arrivals from China have been in greater quantities of late, but as
the greater, part were for tranahipaent the market was unaffected, fr.
E.L.R. 1/'51)
Metals. Mild steel round bars, being in demand by dealers from China,
were the st popular feature on the metals market. Trading .in industrial
chemicals was. particularly slow, only a few transactions being noted. Fer-
tilizers rose further on doubts as to future supplies of sutphate ammonia,
Cement. Despite the arrival of fresh supplies from Japan, the market remain:
ed (F.L.E.R. 15/2/'51)
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Tl. COivlaLODITfl S
World Demand & Supply
American's Influence on Commodities
The American price freeze announced last week-end has upset commodity
markets, not so much by what it intends to do as by its vagueness. The
'coon mie Stabilization Administration, was the first to admit that the
order would apply only a brake to rising prices and will not kilt them
immediately. Prices of primary materials are apparently to be controlled
by the' ceiling prices on endir. products. But many American manufactur-
ers have bought large from these materials could not possibly be marketed
at current American retail except at a loss. Wool is a case in point.
American buying, in Australia in January helped to push prices up by anoth-
er 30Y. And this further increase in the cost of raw material has yet to
be reflected in the price of cloth sold to the American public.
The US has become such a large importer of raw materials both since
the war and more especially since the Korean war that any. riJi. price Con-
system would have a damping effect on world commodity prices. The
crucial question is whether 'the 3resent order will be ri dly a2plied.
st experience srgests that as manufacturers' costs rise and the elamour,
for price adjustments increase the Administration will give way. In that
case the price "freeze" might do no more than take the edge off American
civilian demand and reduce private hoarding.
If the American Government intends to be more ruthless this time and
saddle American manufacturers with losses (which is unlikely), the rest
of the world will at least have a chance to but ua materials now in short
su 1 and price rises are likel to be much more modest.~ It.woulc also
give a ahanoe to the American stockpiling authorities to increase their
expenditure at a proportionately higher rate,. Until the operation of the
-new regulation is better understood, American buyers might act cautiously.
In that case there might be an opportunity for this gaunt (Britain) to
restore some part of its depleted stooks. (Economist, 3/2/'21)
.US ity Index at A Record Farm Products Lead Increase
Average primary markets prices advanced 0.3`% in the week ended Jan.
30, according to the Bureau of Labour statistics. The all commodity in-
dex reached a rF.cord hi?= of 180.511. of the 1926 average, 2. `o about four
weeks ago and I above a year ago. The increases over the week were
in farm products (0.')r food (0.70), and metal and metal pro ducts.(O,2%)
The daily index of'prices on spot markets and organized exchanges
.showed nit decline. Grainswere generally hither. Tin advanced 208% to
41.83 a The Burlap, cotton and wool top declined 1.44 1.3 and 4.7 per
cent, respectively; printcloth advanced 2.6%. Bilk was unchanged.
Cotton seed oil prices declined 4% and Sugar 1.7%. Rubber prices
dropped to 72 cents a lb, a decline of 1.4%.
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Wholesale Prices Indices for the.Week ended Jan.30 (1926:.100)
Commodity Group Jan. 30'51 Jan.23'51
Jan,2'51
Jan. 30 '51.
All oamr*iodities 180.5
180.0
176.8
151.8
Paxn Products 197.7
196.4
189.3
156.2
grains 189.6
186.2
185.6
160.7
All Comrno. other
than Farm Products 169.4
169.3
167.1
145.9
Metals & Metal
Products
188.7 188.4
187.4
168.7
Chemicals
144.9 144.9
141.2
115.7
Textiles
180.7 180,7
172.4
138,5
(N.Y. T.
3/V51)
The i:ise in British Wholesale 8rices
The further widespread increase in wholesale prices of industrial
materials,.etc., that occurred in January caused the Board of Trade's in-
dex number for "industrial materials and manufactures" to rise another 4?0
to 344.6 aver e or.1930: X100 ..
____,, In December the index stood at MOT
in .June at 27.5.6, and in January, 1950'at 261.0.
Increase in prices for fish, cocoa, tbiatoes, onions and oranges would
have raised the food and tobacco index by 1.7/o had not their effect been
more than offset by the rebate paid to.butchors, In the event, the food
and tobacco index declined slightly from 228,2 in December to. 227.5. (1.
T. 10/21'51)
Japanese Commodity Market
With the turn of the flew year, the textile quotations bean firmir
up considerably although a s11 ht downturn was witnessed in the blast mar-
et nd free arices of consumer goods toward the end of the year, par-
.-- .~.,... ,
tic notewort was the ~s' rocketir of raw Li(W;F 20 22 A
Grade is. quoted at '4235,000 per bale, Er -far than the peak recorded
immediately after the Korean :elareup. Optimists anticipate that time will
come sooner or later when the 3250,000 mark will be reached. Encouraged
by such a silk ,booin,.rayon, spun rayon, cotton and woolen yarns have shown
an all-round hike. Managers of leading depRrtment stores predict that tex
the uotations will i;o u p by 40-5( in the course, of 1951.
It is highly problematical, on the other hand, whether or not wages
will catch up with such risint; prices. It is said that public textile
purchases in October, last, dropped to around 60o of those in the April-
June period, this being ascribed to the sharp price rise after the Korean
conflict.
Another factor which is most likely to have for-reaching, bearings on
the price trend is the extent of'raw material imports in 1951, especially
pulp, coking coal, salt, iron ore, wool, cotton, soyabeans and grains.
Owing. to the accelerated worldwide rearmaments,, it will be getting more
and more difficult to proourq foreign materials. Thus, indications are
increasing; that producer ,;ooda quotations will soar more than aver. The
advance, if any, will be less conspicuious in consumer goods due to the
lethargic purchasing; power. If the above mentioned materials were not
imported smoothly and, on the other hand, exports should be brisk'as ever
before, commodities for domestic consumption would go. up to the extent
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that economic controls might be necessary,. (o.E.27/l/'51)
"hubber for the West'.' News has comefrom Washington about the first
steps towards a common eestern.polich on key commodities. In London a
conference of the major rubber proco.ucing and consuming, countries has been
in session; it is said to in nn way to be connectedwith the Washington
discussions, though its terms of reference are very similar. Its purpose
is""to review supply in 1951 and 1952 and to consider if action is necess-
ary or deei:rR ble to secure an equitable distribution of prospective avail-
able supplier." This phraseology is in aide terms,but it could clearly
include-and in all pro6ani~i y~i s ~mp7~ sisec~-~ the pos9 ii iittyof direct-
i_ exports of natural rubber to certain aountries rather than to others,
ONly government have been reprasented.at the conference which would
seem to indicate that matters of governmental as distinct from trade po-
licy were under consideration,
The conference has been called at a moment of particular difficulty.
To bring production, prices and deliveries into a degree of order best
suited tO serve the needs of the Western countriesfor civilian and defence
purposes will pl my be difficult. The average monthly price for spot
rubber in London rose continuously until November, then declined tempor-
arily in Deeembe and then resumed its rise last month. But world pro-
duction also increased sharply, quarter by quarter, last year; total out-
put, a t 1,860,000 tons, was the highset ever recorded and nearly 400'000
tons larger tha n in 1949. Most of this increase was due to much larger
output from small goldi%s; apparently smallholder production no longer
falls 'when the price of rubber rises. . In Malaya, smallholders produced
29,000 thns compared with 2'71,.00 tons in 1949, and the increases in their
output was most marked in the second half of the year when'the high rubber
prices offered the prospect of high profits.
Total production in Malaya, despite some troubles along the produc-
tion line, increased from 672,000,tons to 705,000 tons. In 1951, an out-
put of 700,000 tons might be maintained if smallholders production con-
tinued at the recent high level; but estate output is expected to fall
sl' ,fitly since lame areas are due for rgan
But the welcome improvement in the supply of natural rubber must be
largely credited to the rapid expansion of Indonesian production from 431,-
000 tons in 1949 to 692,000 tons. Here, again, the larger contribution
came from the smallholders. 't'heir output (calculated by reference to ex-
ports) was estremely low in the first quarter of last. year when output
was hoarded rather than marketed. taut. after the currency reform eleven
months ago, exports increased steadily, nd the total for the year, 520,-
000 tons, was almost double that of 1949, Estate production increased
very modestly from 167,000 tons to 172,000 tons. This year, given con-
tinuation of present political stability Indonesian output might well re-
ach 700.,900-750,000 tons. Production in Ceylon and most of the other
smaller producing countries has also expanded during the past twelve months.,
and may increase further this year. World production in 1951 mirh here-
fore approach 1,900,000tons; it should without difficulty maintain last
year's level of 1,850,000 t6?18,
Consumption of natural rubber has not increased to the same extent
as production. World total consumption in 1950 is estimated at 1,650,-
000 tons, some 212x000 tons more tkian inn 1949, but gti21 21 0 tens ess
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than current output. American consumption at 713,000 tons was the larg-
est in any gctiar except 1941, and a single month's consumption reached 69y
178 tons last October. But the subsequent fall to 44,000 tons in December
shows the measure of effectiveness of governmental restriction on aivila'in
consumption; consumption of natural rubber in the US is limited to 40,000
tons a month in the first quarter of 1951, and if this restriction is
maintained, totr-l consumption fo natural rubber in America this year will
not reach 500,000 tons. Consumption of synthetic began to increase from
March last year, when the price of natural rubber rose above that for den-
eral purpose synthetic (GH-S), Stand-by plants for producing synthetic -
rubber have been recommissioned and production this year is expected to
re i at 600,000 tons despite the.shortage of.the raw materials. Although
natural rubber has been forbidden for certain products, synthetic rubber
.Can be used to an unlimited extent. Since the end of Degember the US
government has become the ;sole importer of natural rubber, b{zt purchases
this- year are unlikely to be smaller. than last year. In 1950 only 100,-
000 tons were put into the stockpile, In 1951, if imports are maintained
at last year's level and if consumpt i9,n is no ']higher than 500,000 tons,
some 300,000 tons should be available for the -stockpile. This would give
the Munitions Board about a yE;ar'e supply of natural rubber 850 QOU Mons
a nd this quantitlj~ could be eked out over a longer period_if synthetic pro-
-
duct n b n be steed up s y to 750,000 tans:ayear.
In Britain consumption of natural rubber increased last year from 184,
000 tons to 220,000 tons; 1951 is not expected to show a rise much above
this level. European consumption has also increased though not so marked-
ly; only a modest rises is to be ex ected in 1951, Russian purchases (des-
pite some of last year's headliness) were on a smaller scale in 1950 than
in either 1949 or 1948. In fact, Russia took only 82,000 tons compared
with 105,000 tons in 1949; and increase of i8,000 tons this year, there-
fore, would not be an occasion for any extreme rtiising of Western eye-
brows. Any estimate of world consumption 1951 at` this stage must be large-
ly a guess, but probable trends suggest that it might reach 1,500,000 tons
for normal purposes and 1,800,000 tons if American needs for stockpiling
are included.
Stockpiling' will remain the key to the market. Last year world pro-
duction exceeded consumption by 200,000 tons; of this balance, 100,000 tons
went to the American stockpile, 50,000 tons to China, 20,000 tons believ-
ed to be stockpiled by Japan, 20,000 tons put into stock by other countries,
including Australia, Itlay and Germany, and 10,000 tons destroyed by fire
in Singapore. This year the margin of world production over consumption
is likely to of the order of 350,000-400,000 tons', of which 300,000 tons
will find their way into the American stockpile. Britain and France also
intend to build up strategic reserves,which could account for a further
200,000 tons; such a quantity wo>ild represent barely eight month's supply
for the two countries taken together. If these three countries were to
be forced to compete with china and the Soviet Union in the open market,
the price of rubber could rise to fantastic hdights.
A primary problem thus confrontin43 the London rubber conference is
to discover means of providing enough natural rubber for the Western Po-,
were without undUy fcorcing up the price.
Last year Malaya exported 38,500 tons of rubber to China and 44,000
tons to HK-much of rwhioh must have been for transhipment to China. These
shipments, occured largely in the second half of the year. Indonesia, up
to November, sort nothing; to China and only 2,000 tons to HK. If Malaya's
shipments could be stopped) and if in addition, supplies to Japan and other
countries COl dbe kept at little more than the 1949 level some 100,000 tons
could be reXeased for Britain and Frsnce. Such?a redirection of exports
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could be contrived by a system of export licensing or of international
allocation; either method is pkltically feasible so long as some supplies
are allowed to go to countries not actually arral;ned as ngdressore.. But
each method would be administratively difficult to enforce. In Aalaya,
Chinese dealers control all perhaps half of idalaya'e total production,
Well over 10`1A of Iudonesia'a production is smuggled out to Malaya by Chin-
ese merchants, while the long, rebling lard frontiers. of Siam and Viet-
nam - both adjoining China -would provide grand opportunity for illicit
trading. it is not that the Chinese dealers are necessarily symppthetio
towarH8 Communist China. taut to enforce a system of. alloontion.export
licensing, for rubber, it is useless for the appropriate governments merely
to pass well-meaning resolutions in London; themeasures must be policed,.
and to do that effectively they would need the full backing of Malayan
rubb?r'traders. On this view 'a complete denial of rubber to, say, China
would seem out of the question;.the more realistic aim is to find a method
which would keep the leakage to a miniuni. .
Intonational allocation onuld be a powerful means of reduci.m the
womLd >rice of rubber, No country wants to be held to ransom' 'by primary
producers at a time when" it is accumulating a strategic reserve for common
defence (though'such a reserve in peacetime would be a potential threat.
to, producers). But if an agree . d method of redireotinig sullies of ha.
tural rubber to the western owexs - whatever it might be - had the effect
of Woo dir rice o rubber at an art ioially low eyel, the incentive, to
smu le supplies to China and elsewhere would be ail the gr?aer. Bri-
tain learned uririj tkie iaet a r that to deny supplies to enemy or poten-
tial enemy countries. was a costly business.. It would still be a costly
business in. conditions of "hear war". if the leak+re is to be reduced to
.a minimum., the price of rubber may' have to bj maintained at a high level .
It will not be easy for the London oonferenae to find the right answers
to these difficult questions. (Boonomist, 10/2/'S1).
Metals
Ever Risi .Metal Prices in Britain. Prices of non-ferrous metals
apveremained very yant despite Me imposition of prime control in the
US. Tin reached an all-time record of #1,357i a ton on Monday - it rose
C85 in a day - but subegquently fell to #1,345? Backwardation was only
#30 a. ton despite the high spot-price? The pievious rebord'was establi-
abed on.P oemberl9, 4.950, when.. the price reached #1,302 a ton. Antimony
rose by #75 during the. week to #325 a. ton; the:price had been steady for
the previous five weeks. Tungsten continued its steady rise and increased
by 35s. to 525s. a unit. Other metal prices - at least the official quota
tione - remained unchanged, though high pxomiums are still being paid for
spot wupplies of copper and zinc. (Eoononrist 3/2/'51) .
British Coiling for Scrap. Maximum prices for non-ferrous scrap me-
tal dame into force this week. On the face. of it, it is difficult to see
how the order will being more scrap on to the diarket. ors ices have
race been w a ove those for vir in meta], but t o new limits are a
rec a below. the, Iinistr a selling; prices of new metal and in arty' case
these are too low in view o the present scmoity of meta . It would have
been more rea sonable to have the prices of virgin metal above the corres-
ponding prices for scrap. To reduce the rites fob" sera as the Mini-
eta has done, it unlikely to re lave theresent.metal shortage and may
even inters it. -T
The new control does not impose maximum prices for secondary ingots;
that is serious weakness, Any manufacturer or merchant can now bt,Y scrap
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at controlled prices, convert it inot secondary !.sets sad sell t1am at any
price that metal users are willing to pay. In any ease there is no scien*
tific method for determining; the duality of scrap. (Economist, 10/2/'51)
British Steel, Iron Nationalised;Britain took its biggest step towards
compbetqstate socialism today when the bulk of its great iron and steel
industry passed into public osnership. Steel was the seventh major indue.
try to nationalized since 1945. The Government now owns an indispensable
material that goes into making cars, ships and thousands of products that
require steel. Those manufacturing processes are still in the hands of
private enterprise, but Government control of the basic ingredient meant
it had an indirect but nevertheless powerdu1 rein on most of the country's
economy,
legislation, pushed through Parliament in the. daee of relentless op-
position by the Conservative Party, will enable the Corporation to regu-
late production of a 11 but the smallest fxms by a licensing system.
(S.C.M.p. 16/2/'51)
US Metal Price Trends. Major US producers of tinplate haye announced
changes in prices in pri es effective January 1, with Carnegies Illinois
prices effective aanuary 16.
To date PO (1lefence) orders for tinplate have not been heavy, How-
every defence tonnage is expected to increase with application of ti> con-
sumption controls Feb. 1. Reason is that tin used for DO orders probably
will be outside the quotas, and. can makers are likely to slap on 10's where-
as previously they were producing such items as ration cans from plate on
`hand,
General refractories prices are up, Standard chemically bonded chrome
brick at Baltimore is up 65 to a new price of?482. Standard at magnesite
brick is $104 at Baltimore, and chemically bonded magnesite brick is now
X93. (I.A. 4/1/'51)
Metallurgical Industry in US 1951. If the navy expands its building
schedules, production of brass nd bronze i ots mar surpass that of the
peak war years of 1943 an(L 1944*
Fabricated copper will be in tight supply during 1951. Production
will Probably consumers all available materials Finding substitutes for
copper is one of the toughest jobs there is.
The machine tool industry's 19510 orAer' volume will probably total al
billion, Most machine tool companies rated orders are less than'10 pct
of their total but 75 pct or more could be rated as industry converts to
ME 77 X_
nae production.
Estimates are that stainless steel roduction in 1950 was about 25
Pat r than the previous 7.7,378 ingot tons record sot in 1948, This
despite the handicap of alloy shortages during the last half of the year.
The aluminium pinch will take a big biti: out of automatic transmis-
sion production this "year. (i.~-. 4/151)
US Plans to cut Steel and Cooper USe in Cars. Government plans to
trim sharply the amount o steel, copper and aluminium which may be used
in new cars;, refrigerators and other durable goods after April I topped
the metal news last week.
Market conditions were unchanged, with prices of all major metals
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steady and supplies extremely tigkrt.4, {33.-S. 13/2/'51)
Tungsten.
Scramble for Tungsten. '.!ho rise in the price of wolfram, one of the
tungsten bearing; ores, has been an outstanding feature of the current com-
modity boom. On January 31, it rose again by 10s.'to 520s,-530s. a unit,
making a total ride of nearly 35s, in seven days. 'It is now well oval'
double its level of last September and over five times its price, prior to
the Korean war.
Tungsten is likely to be in great demand for machine tools, defence
equipment and weapons. But China is the world's largest producer of tung
sten ore and was one of the main exporters. Supplies from this source
are no longer available, and Portugal and Bolivia together have had to meet
the bulk of the world demand in recent months. The US expanded its domes-
tic production of tungsten ore to a very high level during the war - in 1943
it. produced more than China - and although output. subsequently sharply, the
U5 government will no doubt take steps to. see that it is once more increased.
British imports of tungsten ore. last year axAounted to only 5,800 tons or
about. the same as in 1949. :Por-tugal sent nearly half of the total quan-
tity, and smaller supplies came from Burma and Bolivia. Shipments.from
Burma have declined steadily since the and of the war, but with diplomatic
enoouragment and improvement in the transport, it should be possible to
get larger quantities.
1'a ili:r4 these a sizeable expansion of imports during the current
year.seems out of the questioner A mittedly, the high price of tungsten
is already encouraging; the sma liar producers, particularly in Austra-
lia, South Africa, and South Africa. But not much more than a few extra
thousand tons would be available in 1951 US Imports alone are expected to
increase by nearly 5,000tons. (Economist 3/2/'51)
Automobiles .
US Auto Cutbacks? are be,3inning to be effected by more defence. orders.
General Motor will make hepublic F-84 Thunderjets at Kansas City, Willys-
Overland has received for jeepo, the latest on.valued a- $63m. GMMii'S Old-
smobile Divs will make 32 in* rockets for the new super bazooka. Ford will
build aircraft engines,, Ca dillao is building tanks in Cleveland and Contin-
ental is building tank engines. 4/]./15l)
US "Freese" and Wool, Prices. There wa.9 much uncertainty in wool-buying
sircles in the UK be are the London sales opoened last week about the trend
of prices. This was due to the easier tendency noticeable at that time in
the primary markets, particularly in New Zeal.nd, following the announcement
that the US government proposed to freeze retail prices. The News had le-
ft American buyers in the dark regarding the pr',ices they dould afford for
raw wool, and with their operations limited to small amounts Bradford pur-
chasers were reluctant to pay current prices in she hope, which has not yet
been realized, that they would be able to do better at a later date.
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So far the market has remained generally firm, buyers from the Contin-
ent, especially from France, showing no hesitation in making purchases, ap-
parently being more concerned. with obtaining the eurplies they need urgent-
ly than with epgculating on future market trends.
Asa result of the first two days' sale prices are from 20 to 30% above
those ruling in London on December 9, and it was obvious from the confident
biding in a strong; market that the world defaand for wool has not abated.
How long American buyers will refrain; from dull-scale operations is pro-
blematical for much depends on the price control recommendations, but the
view is held, by many that once they cease to do so nothing can prevent prices
going still higher. Both Britain and the Continent are still ill-supplied
with the raw material, and at. the moment only the diffieult ;of financing
purchases of wool at 9200-250 a bale is restrictinj activity at the sales.
(L.T. 5/2,/'51)
Japanese Imports of Wool. In the current wool year, imports have been
scheduled at 320,000 bales, of which about 60`~ has already been contracted.
Whether or not remaining 40~ can be imported smoothly is dependent upon the
allocation of foreign exchange in the January-June 1951 period. In the
let quarter, sufficient exchange allocations hays been made for about 100,-
000 bales. If exchange allocations were made in the April-June quarter
for about 50,000 bales, the 320,000 - bales goal would be attained somehow
or other. The trouble is, however, that the world wool market is firming
up continously. In this light it is imperative for Japan to promote wool-
len goods exports in order to finance wool purchases. (27/1/'51)
Sheet Glass
The 1951 output target is set at 4,000,000 cases, of which 400,000
cases are earmarked for overseas sales, Indications are that this much
will be exported on scheduled. A sudden price rise is ub likely, but the
present FOB price of e5.50 will gradually approach the domestic price level
06,60). Shipments this year will extend to East Africa, Persia, the US
and Sod A,merican,Port. (O.E. 27/l/'S1)
With last year's exports estimated at wei:ll over 570,000 MT, or the
second largest yearly shipment next only to the prewar record of _610,000
MT in 1937, it will be easy't) attain the 700,000 1MT goal for this year.
Bigger shipnmints will be made to Indonesia India, the Philippines and
East Africa, as well as to the 1950 heavy buyers, suoLi as the US, T land,
Burma, etc. Time will come sooner or later when the quotation will 6a11y
to the former floor price level, (416 a ton). (O.E. 27/1/15].)
Hides & Skins
j ~aese Imports, Unless adequate arrangements are made for imports
from Argentina, the supply situation will be getting; tighter in and after
next April, Due to- lack of s1erlin8 exchange, it will be more difficult
than ever to import Aides an skins from the Sterling Area. 2771
51
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Food
Worm Nice Producttol to Show Rise, World rice production for the
Year endi.nt next July will total 1199000p000 short 'tons of which Asian coun-
tries are expected to grow 92 per cent, the US Department of Agriculture
estimated.
The expected crop will exceed the 116,000,000 tons grown last year, the
:Department saidr and also better the prewar annual average of 117,200,000
tors,,
Asian production, set at 110,000,000 tons, exceeds last year's crop
of 107,930,000 tons and is but two per cent less than the 1935-40 annual
average of 111,980,000. World food production for the current year is
expected to total about two p,,rcent above that for last year and exceed
the 1935-39 average by about tour per cent. However, despite increasing
production the per. capita consumption continues below prewar levels due to
the increase in population, the survey showed. (i1.5. 13/2/'51)
Shortage in India, It has been officially estimated that at least
5,500,000 extra tons of drain will have to be found this year if the ra-
$ioning system is not to colapse o ;.0 . vIp,-" 3 j 51
1#z? wn,04p; Schgg apore's requiroment, Quotas have now been distribut-
ed to previous quota-holders to import the. balance of Singapore'-a alloca-
tion of flour from Australia under the'Xnternational wheat Agreement.
Licences issued against these quotas will be valid until 31st March 1951.
License will also be issued for the importa on of wheat flour outside
the International heat Agreement for shipment before July 31, 1951.. These
licenses will be issued on any source, (S.E,B. January 1951)
Out Ba~S
It was learned here that -the Indian government does not intend to li-
ft export ban on gunny bags itt least for the time being.
So far there has been no report of P~.ny export licence being issued to
gunny bags. It is circulated that there will be no export licence issu-
ance until next June, hew ;rceen thread bags were sold at the price of
HK07 per piece on February 14. (11.K.Y.P. 15/2/'51)
ShippL%
Liner }sates Increased, Shippers have recently been notified of consi
dera-.e increases in liner freight rates by several shipping conferences.
TTates of freight from the UK-to India,, Pakistan and Ceylon, for example,
will be increased by about 25(/o?effe-ctive as from March lst, and increased
have also been notified by the Bast African conference lines. The gener-
al level of outward freight rates to Indian destinations has remained un-
changed sinoe 1944, although about a year ago rates from Continental ports
were increased byl5/. There are now to be raised by a further l0/1", to cor-
respond with UK rates, white homeward x'ates, which have been unchaed since
1940, will alsobe raised by 25%. Thiti increase in, liner freights is by no
means an isolated movement, Almost all conferences trading :dDm North tameri-
ca have already announced increases, and news now comes from HK that all
Far Eastern conferences have notified increases of up to 15'o in oar o xates
ar d assennger arc ----.
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The reasons for these increases ares in the words of one announcement,
"the constantly rising operating; costs of ships, combined with the protract-
ed length of voyages."
Fuel bills also are now higher than they have ever been, while the de..
lays 'which merchant ships experience in many ports show no sign of improve-
ment. The general increase in operating; costs which has forced the increR_
se in liner freight rates equa ily affects tankers and tramps, Even if
demand for tonnage declines, tramp freight rates are not likely to fall as
far as they recently rose; for vessels would have to be- laid upat a much
higher point of the freight index.., (Economist, 3/2/151)
Cargoes from the Far East to Europe. A feature of the freight markets
was the chartering og three foreign-owrjdd ships to load soya-beans, or
maize, at aalny for the Continent. The rate paid was 180s. a ton, which
compares favourably for owners with recent increased rates from other Bast-
ern pp +ts. The voyage from Dalny, however, is not one which necessarily
appeals to British owners as much a s some Eastern routes.
Freight rates between the UK and Chittagong are to be raised by 15%
as .from March 1, making with a rise of 10"/o, on January l an increase of 25
The new rates will then be in line with those quoted from the Contin-
ent and also with those which, it was recently announced, would apply as
from March 1 to most ports in India and Pakistan in the trades from the
UK and the Continent, owing to hifja!ar workin6' expenses.
Homeward freight rates from all regions in India and Pakistan to the
UK and Northern Continental ports have already been raised by about 25%,
with the exceiption of those from Chittigng and Calcutta, where the new
quotations are to apply from March 9, (L.T. 6/2/'51)
Chartering for Japan. Chartering for Japan involved the payment of
some exceptionally,high frei,tiht rates. Tonnage was second-for an early
voyage of a versel.from the River Plate to Japan with cereals at s27 (
about 19Os1 ton ). This rate may be oompurdd with 150s. a ton previous-
ly accepted for the transport of cerals from the River Plate to India.
Another high freight rate paid was 135s, a ton for pice from Alexandria to
Japan,
A rate of 80s. a ton was quoted for British ships to local coal in the
U6 for Japan, but ships were not reported to have been o;;ytained on this
basis. At. first, towards tole end of November, shipping for coal from Nor-
th America was obtained at 50s, a ton. The slowness with which tonnage
was fixed in-various trades yesterday was attributed, mainly, to the scar-
city of vessels available for early loading. (L.'1'. 7/2/'51)
Japanese Shipping,; Situation. Cargoes to be carried in the let quarter
of 195 are estimated at about 4,500,000 tons. Even assuming that about
20',0 of these cargoes, or .900,000 tons, should be tarried by Japanese craft
(this may be the maxium tonnage for them at present), neeosary bootoms
would be lXO2000-l,200.-000 D:1 tons. ocean-g oir:;;; craft holdings-, on the
other hand, totalled not more than 633,000 :Ji tons as of Dec. 31,1950, and
are expected at increase to 910,000 D.i by the end of next March. Avail-
able bottoms, therefore are 400,000-500,000 DN tons short of demand, The
deficit would assume more serious proportions if regular servi.mc lines were
authorized fox Japanese ships. -~ '
Be the case what it may, ocean-goi.nk; craft will be getting shorter
and shorter in the course of this'year. The reasons area 1) the placement
in the Far Easte:rn waters of foreign vessels is likely to dedrease more th-
an ever, and 2) about 250,000 DW tonnage is newly required for overseas sor-
vicc: as about 5(J0,OU0 tons of materials now have to be imported from the .US
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instead of China. 1, ccordin,: to the 1951-2 iw) cjl't p1 ,.Y ua, the iEnpart v.ca-
lwne: is estimated at about l5rn. tons, of which OYersef:e services brave to
take care of llm. tons, or 7j';, and ,ep:r-sea sera No, 1 service, only 700,-
000 tons, or
ksaurnint; that Car6oes in ivear-scn loo. 1 kfrom South China to l,nmehn-
tka) wt;ro 'married 1001w by tiepanese Craft, and Car oe s in other shippino_; are-
as only j0`j9, tnti deficit in craft would be about 290,000 ]i4 tons in the
first half. n.ssumin that 40Jo of car oes in other shipping areas should
be carrisa by Japanese boats, the deficit would incror so to 680,000 Drv tons.
It would jump to more than 900,000 U''vi tons, if the percentrat,e was B ,A at
50. 1nhe situation will improve in the letter hall:, but a,vaailable bottom
still will be short of. reyuiroments. 150,000,570,000 and f330,000 DI tons
respoctivt:ly, Shippin. circles I'c or that a boat one half of cara;ocos will have
to. be carried by Japanese boats, but this is practically iwpossibl, pro-
position. inc 'maximum nmount_ of erar,_,oes which can be carried by JnpaneHa
boats will be 3(Y/ or so of the total, kc'. ", 27/1/151.)
S.
ii I. l;C0sU~ SIC ivy' ' S i3Y CUUlva' :L;S +~ 4*
Price-Freozin, . The most fair-recchin, measure so fur introduced, the
L;enerol freeze of prices and wa?es is lookinea; unhappy. ..reedy exceptions
have b~,un made. Of those permission to make effective t.w increase in cool
miners vv?ctLs, ner;otiat(,,d but not yet c,f-j ,_,ctivo on Jan. 25, is trlfa nio,t im-
port-?.nt. It roust be: foll,-w~!d by an inch ?^.s~ in coal prices, just es has
re:centl:y happened in -i n~;la,nd; and the;r.from other incr(~:ses must follow.
Other sirrsilar but lass important wfa,;e incrt,fses ?aro :xp~ cta d, i'ric~, of
farm products word risint; steadily before Jon. 25 and have,.;one on risir>t::
since ; all fern prices are [U.10,& "d to rise to the of;f:iei