FOUR BASIC MINERALS
Moderate growth continues at 4 to 6% rate JAMES H. KRIEGER, Technology Editor, Washington, D.C.
T
here are signs of increasing growth rate and also signs of a decreasing rate, but the minerals industry can, in either event, expect to post another record gain in the value of domestic production in 1969—the ninth record year in a row. Following a slim 3.5% gain in 1967, the industry recovered to a healthier pace last year to post a 5.5% increase, bringing value of production to $25 billion. C&EN's computer forecast indicates a drop back to 4% this year over 1968, with production at $26 billion—if the industry finishes out the year at a medium rate of growth. However, at a high rate of growth, the forecast indicates the rate could go as high as 6.8%, boosting value of production to $26.7 billion. If the industry ends up the year at a medium rate of growth—4%—and continues on into 1970 at a medium rate, 1970 production would rise 4.2% to $27.1 billion, according to the forecast. As with other industries, a question for minerals is how much of the gain is represented by increases in physical production and how much is due to price rises in an inflationary economy. Indications are that physical production increase and price rises will contribute about equally to industry gains. This would closely follow the general economy. Economists expect gross national product to end up at about $930 billion, a gain of 7.5%, in part due to inflation. Even so, they expect the Federal Reserve Board index of industrial production to be up 4 to 5%, indicating that not all economic gains are caused by price increases. All three sectors of the minerals industry—metals, nonmetals, and fuelsshowed gains last year. Most of the industry gain, however, came from ris48A
C&EN SEPT. 1, 1969
ing output of petroleum and natural gas. Revival of construction activity boosted nonmetals, while settlement, early in the year, of the long ninemonth strike in nonferrous metal mines made for an increase in metal production over 1967. Steel For steel and for the minerals that rely on it—iron ore, fluorspar, and alloying metals—the current outlook is far different from that of a year ago. Then, steelmakers were staggering under an import spurt that by the end of 1968 shot imports to 18 million tons, compared to 11.5 million tons in 1967. And although steel production in the early part of 1968 was running considerably ahead of the like period in 1967, it represented demand generated by hedge buying against a strike as contract negotiations approached. In late 1968, production dropped sharply as buyers worked off inventory. Nonetheless, production in 1968 was good enough to carry the industry to a total of 131 million tons for a gain over 1967's 127 million tons, though not reaching the 134 million tons poured in 1966. The industry began 1969 at a lower production rate than in the like period of 1968, but not by much considering the hedge buying influence in 1966's first half. Moreover, influenced by the sharp increase in imports, steelmakers began to press for government import restrictions. Faced with this prospect, steelmakers in Japan and the six European Coal and Steel Community countries voluntarily agreed to limit their exports of mill products to the U.S. Because of the limitations—coupled with dock strikes early in the year—imports have dropped off this year and will likely
end up at somewhere near 14 million tons for the year. Surprisingly, U.S. exports increased sharply early in the year. All told, the outlook for U.S. steel is more optimistic than in some time, but there is some question as to whether recent developments will be very long-lasting. Also, the effect on steel of government efforts to cool the economy are still to be felt. Of importance to iron ore consumption, steel produced by the basic oxygen furnace continues to increase its relative position. It is now nearing the point of overtaking open-hearth steel, increasing its share of total steel output to 37.1% in 1968, compared to 32.6% in 1967. Open hearth's share dropped from 55.6 to 50.4% over the same period. Although steel production seemed healthy at midyear, ferroalloy producers couldn't count on all of the health rubbing off. Imports of ferroalloys continued to mount, taking over a sizable share of the domestic marketmore than a third for some materials. Producers are continuing to push for quota protection. In nonferrous metals, price changes have been keeping the industries busy. Price increases have been posted for almost all metals this year. Copper Copper began 1969 with one domestic price increase on Jan. 1 moving the metal from 42 cents per pound to 45. Within a few days most major producers had moved to 44 cents per pound. Again in April, a move from the earlier 45 cents per pound to 50 cents put upward pressure on other producers and, by the middle of May, most majors had increased their prices
from 44 cents per pound to 46. At midyear, although demand both in the U.S. and abroad remained high and copper was in tight supply, the 46 cent-per-pound U.S. producer price and the London Metal Exchange (LME) price, fluctuating around a point about 20 cents per pound higher, remained firm. The U.S. is the world's largest copper producer, but it has for quite some time been a net importer. Copper bought domestically goes at the U.S. producer price, but most other copper is sold at the LME quotation. Thus, the differential between LME quotation and U.S. producer price, as well as the one U.S. price at 50 cents per pound, exert upward pressure on domestic prices. Adding to current price instability are the 1967-68 strike in the nonferrous metals industries, the dock strike earlier this year, a drought in Chile (a principal copper producing country), and a continuing rise in consumption. How long the industry will be experiencing price instability is an open question. Some in the industry expect supply and demand to come into balance, possibly by the end of the year. The end of the Vietnam war would have little effect, as only a limited amount of copper could be expected to be released to domestic producers. In any event, there appears to have been no realization of the fears of last year that material substitution because of strike-caused copper shortages and higher prices would cut heavily into copper's markets.
Fuels lead another rise in minerals production Billions of dollars
30
20
10
1.1.1.1.1. 1966
^ ^
1967
Nonmetals
Sources:
1968
|
| Metals
• •
For lead and zinc—and particularly, lead—the story is one of reversal from last year's disheartening forecasts. Pushed by tight supply aggravated by the dock strike, and led by firming
Fue s
Totals
'
Bureau of Mines; C&EN estimates
sumption for storage batteries to a record 512,000 short tons, the Lead Industries Association estimates. Batteries account for just under 40% of lead consumption. A continuation of the strong demand for lead-acid storage batteries got lead off to a heady start in 1969. Even zinc, which has to watch its price under heavy competition from other materials, didn't remain stable. With demand running at good levels, two price increases during the first half of 1969 brought the price to 14.5 cents per pound for Prime Western grade, East St. Louis. This brought zinc price back to the level that had been maintained from October 1964 to May 1967.
LME quotations, U.S. lead had by shortly after midyear experienced its fifth consecutive price rise of the year. At that time, the price stood at 15.5 cents per pound, New York. Only a year earlier, to meet the threat of increasing and cheaper imports, lead prices had dropped to 12 cents per pound. Supplies of lead were tight enough during the first half of the year that domestic producers were reported to be turning down business. However, new smelter capacity and possible release of lead from government stockpiles could have some impact before the end of the year. A cold winter and accelerated auto production pushed 1968 lead con-
Lead and zinc
1970
1969
Slump in U.S. consumption continues for many metals and minerals All figures in thousands 1966
Bismuth, short tons Chromite, short tons Cobalt, pounds Copper, refined, short tons Fluorspar, all grades, short tons Iron ore, long tons Lead, short tons Manganese, short tons Nickel, short tons Petroleum, crude, runs to stills, barrels per day Tin, primary, long tons Tungsten, contained, pounds Zinc, slab, short tons
1967
1968
Low
1969 Medium
High
Low
1970 Medium
High
1,572 1,461 14,203 2,360 1,065 134,047 1,324 2,369
1,257 1,354 11,610 1,935 1,091 118,982 1,260 2,200
1,138 1,307 8,857 1,872 1,309 120,449 1,319 2,241
1,310 1,343 10,641 2,058 1,293 119,632 1,345 2,358
1,359 1,377 10,797 2,123 1,371 128,315 1,373 2,377
1,478 1,419 11,691 2,255 1,418 134,002 1,406 2,434
1,302 1,324 10,068 2,069 1,397 120,533 1,374 2,324
1,371 1,355 10,249 2,163 1,516 129,628 1,417 2,359
1,508 1,413 11,218 2,318 1,589 137,680 1,459 2,395
188
173
158
177
186
198
181
194
209
9,444
9,815
10,341
10,442
10,616
10,742
10,773
11,004
11,243
60
58
58
60
60
61
60
60
61
17,710 1,410
13,860 1,237
11,038 1,339
13,381 1,385
13,735 1,420
14,860 1,481
13,026 1,412
13,506 1,463
14,770 1,536
Sources: U.S. Bureau of Mines; C&EN estimates SEPT. 1, 1969 C&EN
49A
U.S. production and values increase for most fuels 1966
1967
1968
1969 Medium
Low
Anthracite Thousands of short tons Millions of dollars
12,940 101
12,260 96
11,130 88
Bituminous coal Thousands of short tons Millions of dollars
534,000 2,420
553,000 2,550
540,000 2,550
570,000
587,000 2,770
Coke Thousands of short tons Millions of dollars
67,400 1,170
64,700 1,120
63,700 1,100
66,900
Natural gas Billions of cubic feet Millions of dollars
17,210 2,720
18,390 2,940
19,490 3,140
Natural gas liquids Millions of gallons Millions of dollars
19,680 1,040
21,610 1,190
Petroleum, crude Millions of barrels Millions of dollars
3,030 8,720
3,220 9,390
High
Low
1970 Medium
High
9,180
9,900 78
10,590
610,000
587,000
609,000 2,870
637,000
69,500 1,200
73,200
67,800
71,300 1,230
75,700
20,260
20,680 3,330
20,980
21,350
21,920 3,530
22,500
23,110 1,230
23,810
24,490 1,300
24,920
25,090
26,010 1,380
26,900
3,330 9,750
3,290
3,410 9,990
3,500
3,350
3,510 10,280
3,670
85
Sources: U.S. Bureau of Mines; C&EN estimates
Bauxite Thousands of long tons
Trend is upward for U.S. production and values of most minerals Sources: U.S. Bureau of Mines; C&EN estimates
Values in thousands of dollars
Aluminum Thousands of short tons High 1970 Medium Low High 1969 Medium Low 1968 1967 1966
4,088 3,895 3,636 3,743 3,604 3,436 3,255 3,269 2,968
Antimony, mine i Short tons High 1970 Medium Low High 1969 Medium Low 1968 1967 1966
1,144 1,048 920 1,031 963 879 853 892 927
50A C&EN SEPT. 1, 1969
VaftTe $2,025,000
1,874,000 1,693,000 1,635,000 1,454,000
Value $959
881 780 816 848
High 1970 Medium Low High 1969 Medium Low 1968 1967 1966
1,903 1,835 1,795 1,854 1,794 1,767 1,661 1,654 1,796
Value $17,800
17,400 16,100 16,000 17,400
Copper, mine,,recoverable Thousands of short tons High 1970 Medium Low High 1969 Medium Low 1968 1967 1966
1,145 1,089 1,081 1,188 1,170 1,148 1,199 954 1,421
Value $ 914,800
982,800 1,007,000 729,000 1,023,000
Cadmium, metallic, shipments Value Short tons
Fluorspar, finished, shipments Thousands of short tons Value
High 1970 Medium Low High 1969 Medium Low 1968 1967 1966
High 1970 Medium Low High 1969 Medium Low 1968 1967 1966
5,354 5,042 4,347 5,286 5,020 4,602 5,622 4,803 5,896
Cement, shipments 1Millions of 376-pound barrels High 1970 Medium Low High 1969 Medium Low 1968 1967 1966
431 419 407 416 409 402 397 374 390
$26,700
26,600 29,800 25,400 28,500
Value $1,320,000
1,290,000 1,250,000 1,190,000 1,230,000
307 305 305 291 291 288 256 294 253
Gold, mine Thousands of troy ounces High 1970 Medium Low High 1969 Medium Low 1968 1967 1966
1,710 1,630 1,530 1,660 1,600 1,540 1,530 1,580 1,800
$14,100
13,400 11,800 13,100 10,800
Value $63,200
62,100 59,400 55,300 63,000
Gypsum Thousands of short tons High 1970 Medium Low High 1969 Medium Low 1968 1967 1966
9,853 9,696 9,655 9,895 9,743 9,720 10,194 9,393 9,647
Helium, consumption Millions of cubic feet High 1970 Medium Low High 1969 Medium Low 1968 1967 1966
1,177 1,169 1,179 1,079 1,081 1,076 866 917 948
llmenite Thousands of short tons High 1970 Medium Low High 1969 Medium Low 1968 1967 1966
1,121 1,097 1,090 1,076 1,062 1,054 980 965 965
Iron ore, shipments Thousands of long tons High 1970 Medium Low High 1969 Medium Low 1968 1967 1966
91,975 77,872 84,105 89,986 87,076 83,822 83,441 83,016 90,824
Pig iron, production Thousands of long tons High 108,996 1970 Medium 101,703 Low 92,032 High 101,941 1969 Medium 96,951 Low 88,946 1968 89,333 1967 87,647 1966 92,150
Value
Lead, recoverable, production Thousands of short tons
38,200 34,400 35,700
High 1970 Medium Low High 1969 Medium Low 1968 1967 1966
Value
Magnesium, primary Thousands of short tons
$36,400
36,500
411 393 364 378 366 347 354 316 327
118 114 112 110 108 106 98 97 80
30,300 32,100 33,200
High 1970 Medium Low High 1969 Medium Low 1968 1967 1966
Value
Mercury, mine 76-pound flasks
$40,900
37,800
>20,000
19,400 17,900 19,300 19,300
Value ^944,600
High 1970 Medium Low High 1969 Medium Low 1968 1967 1966
Molybdenum, shipments Thousands of short tons High 1970 Medium
Low 936,100
High 1969 Medium
Low 897,000 892,400 976,400
Value &5,103,000
1968 1967 1966
High 1970 Medium High 1969 Medium
Low 4,483,000 4,398,000 4,621,000
56 53 50 52 49 47 46 41 46
Phosphate rock, marketable Thousands of short tons
Low 4,865,000
27,290 25,990 21,680 23,710 23,350 20,580 24,980 23,780 22,010
1968 1967 1966
51,800 48,800 46,200 46,900 44,500 41,500 40,800 39,800 39,000
Value
Potash, sales Thousands of short tons
93,500 88,500 98,800
High 1970 Medium Low High 1969 Medium Low 1968 1967 1966
Value
Silver Thousands of troy ounces
$103,800
96,600
5,880 5,656 5,402 5,715 5,555 5,331 5,091 5,363 5,377
69,100 68,400 56,400
High 1970 Medium Low High 1969 Medium Low 1968 1967 1966
Value
Sulfur, native, shipments Thousands of long tons
$80,400
76,100
$14,100
12,700 13,500 11,600 9,700
Value $172,000
High 1970 Medium Low High 1969 Medium Low 1968 1967 1966
8,695 8,285 7,879 8,202 7,893 7,483 6,645 7,684 7,721
Uranium, mine Thousands of short tons High 1970 Medium
Low 159,000
36,900 36,000 34,200 36,600 35,900 34,700 32,400 32,300 43,700
High 1969 Medium
Low
4,160 3,370 2,650 4,410 3,880 3,340 4,900 4,200 4,300
149,000 133,000 143,000
1968 1967 1966
Value
Zinc, recoverable Thousands of short tons
$405,500
High 1970 Medium
Low 369,800
High 1969 Medium
Low 339,000 330,700 323,700
1968 1967 1966
645 620 610 618 604 595 526 549 573
Value $105,200
103,300 94,700 109,400 125,800
Value $77,400
77,200 69,700 50,100 56,500
Value $348,000
331,500 279,100 295,800 223,900
Value $ 80,900
93,100 117,600 100,800 86,000
Value $168,640
164,300 143,100 153,700 168,500
SEPT. 1, 1969 C&EN
51A
Coking
Electric utilities sustain rising bituminous coal consumption
Sources:
Electric utilities
Millions of tons
Millions of tons
120
400
90
300
60
20(
30
100
Bureau of Mines; C&EN estimates
0 1966 1967 1968 1969 1970
Retail deliveries
Die casting, zinc's largest U.S. market, reached a peak in 1965 at 630,000 tons, about 46.5% of the total slab market. Following drops in 1966 and 1967, the industry achieved a substantial gain in 1968 to 575,000 tons, nearly 42% of the slab market. With increased use in autos showing up, zinc appears to have regained its health, at least for a while.
0
1966
1967 1968 1969 1970
Industrial
Millions of tons
Millions of tons
400
Aluminum and titanium Price activity is part of the story in aluminum, too. With orders running strong, producers posted a 1 cent-perpound increase on ingot in January to 27 cents per pound. Prices on semifabricated and fabricated products were increased as well. Supply-demand continued in good balance late into the first half of 1969, with a tightness in ingot supply. With its largest markets in construction and transportation, aluminum entered the second half of 1969 with the outlook mixed. Because of its major markets, the metal is particularly sensi-
1966
1967
1968 1969 1970
tive to the national economy, and government efforts to slow down the economy were expected to start showing stronger effects. Housing starts, for example, had by midyear posted consecutive declines for a number of months.
1966
1967 1968 1969 1970
On the other hand, strong gains are being made in mobile homes—a sizable market for aluminum. Home modernization, another big market, is also strong. And cans, both metal and composite, continue to be aluminum's fastest growing market, up nearly 25%
Chemical feedstocks are taking more petroleum and natural gas Chemical feedstock c•fftake
1966
1967
1968 Low
N a t u r a l gas, dry Carbon black Other Total n a t u r a l g a s
91.1 195.0 286.1
84.1 205.0 289.1
77.0 213.0 290.0
1969 Medium High Billions of cubic feet
63.3 226.5 289.8
63.9 226.6 290.5
Low
1970 Medium
High
64.3 227.2 291.5
50.2 239.4 289.6
51.7 239.9 291.6
52.3 240.9 293.2
190.6 75.8 10.3 30.8 307.5
203.8 61.1 10.1 31.5 306.5
207.5 73.5 10.3 32.0 323.3
211.8 86.2 10.7 32.7 341.4
Millions of barrels Petroleum LPG and LRG N a p h t h a , - 4 0 0 °F Still gases Miscellaneous, +400°F Total p e t r o l e u m
V
138.8 39.8 10.1 23.9 212.6
Sources: Bureau of Mines; C&EN estimates 52A C&EN SEPT. 1, 1969
151.6 50.3 9.5 25.1 236.5
171.6 55.6 9.8 27.5 264.5
185.2 59.9 9.6 29.1 283.8
188.1 69.2 9.9 30.2 297.4
in 1969's first quarter, compared to the like period a year earlier. Titanium production and shipments dropped in 1968, compared to 1967. With 90% of its market in aerospace, titanium was particularly sensitive to stretch-outs and delays in various aircraft programs, such as the military C5A and the civilian supersonic transport. In the first half of 1969, however, titanium production was showing good gains over 1968. Although the short-term outlook for titanium remains clouded because of uncertainties in various aerospace programs, the long-term outlook is still buoyant. Projected military and civilian aircraft projects for the late 1970's and 1980's would be big users of titanium.
Rising gasoline production paces petroleum products output Distillate Millions of barrels
Sources:
Bureau of Mines*, C&EN estimates
1000
Gasoline Millions of barrels
Nonmetals In nonmetals, construction minerals began 1969 in a healthy condition, but effects of anti-inflation measures, such as extremely high interest rates, had not yet fully been felt. A vigorous cement industry was shipping at a higher rate than in 1968 or 1967. Production of calcined gypsum was up 10% over the first quarter of 1968. Bureau of Mines figures show a significant change in use of gypsum products in early 1969, reflecting various conditions in the economy. That used for cement retarder increased 2%; agricultural gypsum use fell 40%; that used in base-coat plaster dropped 9%; and that used in wallboard increased 12%. Among other nonmetals, sulfur has experienced a dramatic reversal in its fortunes. Not much more than a year ago, it was in drastic short supply. Producer stocks had dwindled to near 2 million long tons, a sizable drop from the near 5 million tons held in 1962. Prices had risen to $41 a long ton for dark sulfur, $42 for bright. Producers were intensively seeking new deposits and pushing production to the limit. No more. In one short year, the situation has completely reversed. Although production is running at high levels, much of it is going into stocks, which by midyear had gone back to more than 3 million tons. Prices dropped, and at midyear stood at $39 a long ton for dark sulfur, $40 for bright. Some development operations aimed at increasing the sulfur supply had been called off. A good part of the sulfur reversal could be laid at the door of the dismal fertilizer business. A reduced demand for sulfuric acid, used in acidulating phosphate rock to make phosphate fertilizers, has been to blame. Any real pickup in fertilizers could easily bring sulfur supply-demand back into balance if not reverse the trend.
2000
1500 1966 1967 1968 1969 1970
1000 Residual Millions of barrels
300
500
1966 1967 1968 1969 1970
Kerosine, including jet fuel Millions of barrels
600
450
1966 1967 1968 1969 1970
300
Lubricants Millions of barrels
150
oL1966 1967 1968 1969 1970
1966 1967 1968 1969 1970 SEPT. 1, 1969 C&EN 53A
