manufacture products out of their metal in direct competition to us. In peak periods of demand the producers are not anxious to sell us zinc. A few years ago during the zinc and lead shortage of 1964-65 we repeatedly requested metal from American producers, without exception, not one producer demonstrated any interest in our appeals. We were supplied by a Canadian company who showed concern regarding our supply problem. The zinc we received from them plus the relatively small amount we purchased from the government stockpile enabled us to come through the shortage remaining in business. We cannot accept long term purchase orders or plan long production levels if a quota system which is supposed to be flexible but in fact would be unstable-controlled as I mentionedby producers-reported stocks is imposed on the American consumer. The reason is we would have no guarantee that our supply would be allowed in the country. This same situation will prevail with every other user of zinc except the large refiners in America. They will be the only producers able to honor their contracts because of the flexible tariff which they will control. As an officer of a small American business using zinc metal I strongly object to Bill H.R. 51. It is intended to hand over to the few large producers in the United States virtually complete monopoly of the zinc market. It would enable the large producers who we may be in competition with on certain customed smelted products to put us out of business by the simple expediency of inventory manipulation to control the flexibility of the quot and suit their purposes. Sincerely, Senator HENRY M. JACKSON, DAVID STERNS. THE MINERVA Co., DIVISION OF MINERVA OIL CO., Eldorado, Ill., April 10, 1967. Chairman of the Interior and Insular Affairs Committee, Senate Office Building, Washington, D.C. DEAR SENATOR JACKSON: With reference to the public hearing on S-289, slated for April 12, to continue a revised flexible lead-zinc quota plan, may I here represent the Illinois-Kentucky domestic fluorspar industry. Every fluorspar producer of any size in this area can remain in business and continue to operate fluorspar mines and mills in the face of cheaply imported Mexican and European fluorspar, only by mining and processing ores containing zinc as a co-product. It is a demonstrated fact of life that if the price of zinc declines by reason of foreign competition, this will put a severe hardship on the domestic producers of the very strategic mineral, fluorspar. You are undoubtedly aware that elemental fluorine from fluorspar is essential in the manufacture of uranium, and that derivatives of fluorspar, or fluorspar itself, is essential in the manufacture of aluminum, steel, welding rod coatings, glass containers, refrigerants, aerosols, heat resistant plastics, defoliants, pesticides, and a great list of fluorine based compounds vital to the war effort. I urge that this statement be filed with those of the proponents for the passage of S-289. Respectfully yours, GILL MONTGOMERY. CHIEF CONSOLIDATED MINING CO., Re Flexible Lead-Zinc Quota Bill, S. 289. Hon. HENRY M. JACKSON, Chairman, Committee on Interior and Insular Affairs, Washington, D.C. DEAR SENATOR JACKSON: This company urges favorable action on S. 289 by your committee. This legislation is imperative if the domestic producers of lead and zinc are not to be flooded again by foreign production which is already weakening the prices of these two metals in the Free World Area. The newspapers recently announced that the facility of the Texas Gulf Sulfur Company at Timmins, Ontario would produce some 250,000 tons of zinc concentrate this year. At the present time most of this production seems scheduled of U.S. smelters. The large increase in metal which this will produce is bound to depress the price. New domestic lead production in the order of 200,000 tons a year, which is scheduled to come from the Missouri lead belt in 1968, will eliminate the necessity of most foreign imports of this metal, and swelling stocks are certain to again drive the lead price below the economic production level of many U.S. producers. The proposals contained in S. 289 are essential now to maintain a healthy domestic industry and we again urge favorable action by your committee on this bill. Sincerely yours, CECIL FITCH, Jr., Chairman. CITIZENS COMMITTEE FOR STABILIZATION, Senator HENRY M. JACKSON, Chairman, Interior and Insular Affairs Committee, Washington, D.C. DEAR SENATOR JACKSON: We have given careful consideration to S. 289, the Lead-Zinc Flexible Import Quota Bill, and have come to the conclusion it will be of great assistance in stabilizing the industry. Certainly, there must be some better plan than that followed in past years when the miners, millers and processors suffered from wide fluctuation in both price and demand. The imposition of quotas, sensibly administered, should not seriously disturb our relations with foreign producers. On the contrary, it should be of some assistance in preventing the feast or famine condition that prevailed in recent years. The substantial investments being made by producers in the industry should be protected, and the jobs of workmen insured. This committee, therefore, urges the passage of this important piece of legislation and are making known to our friends in Congress our feelings in this matter. Yours very truly, T. J. WATKINS, Chairman. UNITED STATES SMELTING REFINING & MINING Co.. Hon. HENRY M. JACKSON, Chairman, Committee on Interior and Insular Affairs, DEAR SENATOR JACKSON: For many years United States Smelting Refining and Mining Company has been and now is a major domestic producer of lead and zinc, with operations in Utah and New Mexico. We believe the flexible Lead-Zine Quota Bill. S. 289, will fairly stabilize the market for domestic lead-zine and avoid unfortunate conditions which prevailed a few years ago. Largely because of very low metal prices caused by excessive imports and large stocks of lead and zinc, this Company closed down its New Mexico operations for several years in the 1950's. When lead and zinc prices increase, operations there were resumed. We are very much concerned that unless some action is taken which changes the present trend of excessive imports and surplus production of lead and zinc. stocks of these metals will become so large there will be further price decreases. We are not undertaking to marshal statistics supporting our concern, as we believe they will be effectively presented at the hearing. We strongly support S. 289. Very truly yours, BENTON BOYD, Vice President and General Manager of Western Operations. THE EAGLE-PICHER CO., CHEMICALS AND METALS DIVISION, Cincinnati, Ohio, March 17, 1967. COMMITTEE ON INTERIOR AND INSULAR AFFAIRS, Washington, D.C. GENTLEMEN: We have been advised that Public Hearings will be held on April 12 on S. 289, a bill to stabilize the Lead-Zinc Industries of the United States. No one from Eagle-Picher Industries is expected to present a statement before the Committee, however we did want to advise that we are strongly in favor of this legislation. Undoubtedly, evidence will be submitted that will show that the Lead and Zinc Industry of the U.S.A. needs flexible quotas in order to take remedial action against the huge imports of metals experienced in the past during general poor business conditions. We also feel most strongly that legislation should be enacted before business conditions are such that our industry will suffer an unfair burden of world production. Very truly yours, Hon. HENRY M. JACKSON, D. R. CARTER, Vice President. TWENTYNINE PALMS, CALIF., April 11, 1967. Chairman, Interior and Insular Affairs, U.S. Senate, Washington, D.C.: We have been notified that Senate Interior and Insular Affairs Committee is holding a hearing on S. 289, the Lead and Zinc Act of 1967. That would provide a reasonable minerals policy and encourage investments in this vital industry. The California Mine Operators Association endorses and supports this legislation. We urge your committee to report it favorable to the Senate. We urge adoption of this measure by the Congress. CALIFORNIA MINE OPERATORS ASSOCIATION, [From the Wall Street Journal, May 2, 1967] ZINC PRODUCERS MAKE FIRST PRICE CUTS SINCE 1962-RISING INVENTORIES, IMPORTS, DEMAND LAG CITED IN TERMS OF UP TO 1 CENT A POUND-AUTO OUTPUT A FACTOR NEW YORK.-Three major producers cut prices on domestic zinc by 4 cent to 1 cent a pound, the first reductions since April 2, 1962. The cuts were announced by American Smelting & Refining Co., Anaconda Co., and St. Joseph Lead Co. American Smelting, first to announce the price cuts, attributed the reductions to lagging U.S. demand, rising inventories and increased imports of lower priced foreign zinc. Each company announced that its new price for prime Western grade zinc at East St. Louis, Ill., is 134 cents a pound. That's down 4 cent a pound from the 141⁄2 cent level at which zinc had held since Oct. 14, 1964. Between 1962 and 1964, the price rose 3 cents a pound from the 111⁄2 cent level of April 2, 1962. HIGH GRADE PREMIUM ALSO CUT Each company also reported it has cut the premium charged for special high grade zinc, over the prime Western price, to 1 cent a pound from 14 cents. That puts the special high grade price at 144 cents, down 1 cent. They also cut premiums on high grade zinc to 0.85 cent a pound, down from 1.01 cents. That puts the high grade price at 14.6 cents, off 0.91 cent. Domestic zinc shipments in the first quarter dropped to 261,098 tons from 274,406 in the like 1966 period. Inventories March 31 climbed to 87,909 tons from 28.804 a year earlier. The zinc industry has been particularly hurt by the decline in auto production. About 191 pounds of zinc are used in the average auto. In 1966, zinc consumption by the U.S. auto industry dropped to 408,000 tons from 440,000 the year before, and it is estimated use declined further in the first quarter this year. The decline in housing starts has also reduced zinc consumption. STEADY DROP IN FOREIGN PRICES Downward pressure has been exerted on U.S. zinc prices by a steady decline in foreign zinc prices. Zinc closed on the London Metal Exchange yesterday at 124 cents a pound for immediate delivery and 12 cents for three-month delivery, both down 4 cent a pound. It is estimated foreign zinc delivered in the U.S. costs about 12 cents to 14 cents more per pound than the London Metal Exchange quota, reflecting duties and transportation costs. St. Joseph Lead announced in March a 13% cutback in its zinc smelter output, and American Smelting announced in April the closing of a zinc mine at Colville, Wash. Both attributed th moves to the buildup in zinc stocks. Most other zinc producers and marketers reported they are studying the price cuts. [From the Journal of Commerce, May 2, 1967] ZINC PRICE CUT BY THREE PRODUCERS (By Tony Gampetro) American Smelting and Refining Co., St. Joseph Lead Co. and Anaconda Co., major producers of zinc, announced yesterday a 4c per pound cut in the price of prime western grade zinc to 13.7c, effective immediately. Other producers were studying the move and were expected to follow. The reductions reflect the spreading gap between the price for the metal in London (approximately 12 cents per pound yesterday), which has brought about an increase in imports, and a lag in demand for zinc in the U. S. with a heavy buildup in producers stocks as a result of reduced auto production. PRICES LISTED Premium prices on high-grade and special high-grade zinc were also lowered in price by 14 cent per pound. High grade metal was reduced to a premium price of 0.85 cents a pound, making the price 14.60 cents a pound and special high grade carries a new premium of 1 cent a pound or a total price of 14.75 cents a pound. Imports jumped to a record high of 798,708 tons (in all forms) in 1966, almost 200.000 tons greater than in 1965 when imports for the year were still under quota restrictions. Restrictions were lifted late in 1965, and 1966 was the first full year since the late 50's that zinc imports were free of restrictions. Opposition by the Johnson administration to the imposition of lead and zinc import curbs at a time when the two industries have fallen on bad times is looked on by many in the industry as unfavorable. Last week the Senate Interior Committee unanimously voted to report legisla tion providing for flexible import controls. The legislation now goes to the Senate Finance Committee which has jurisdiction over quota and other tariff measures and which has been reported to be unsympathetic to such lead-zinc bills in the past. This hurdle, plus strong administration opposition, makes it very likely that the bill will not go much farther on its own. It remains a good possibility for being offered as an amendment to general trade legislation later this year. The bill would use a predetermined U.S. domestic stock level as a trigger for imposition of import quotas on the two metals, their ores and concentrates and manufactured items. Early in February, St. Joseph Lead Co. trimmed slab zinc output in its Josephtown, Pa., zine smelting division due to depressed demand from the auto industry and increasing unsold stocks at its plants. The company cutback first quarter output by about 5,000 tons and second quarter production by approximately 6,500 tons. PRODUCTION RISE At the same time, Matthiessen and Hegeler Zinc Co., effective March 10, reduced its slab zinc output by 400 tons per month. The automotive industry, heavyweight consumer of zinc, uses the metal in die castings for functional as well as decorative applications and as a coating (galvanizing) on steel sheets for underbody car components as a foil against corrosion. The daily average production rate of domestic slab zinc fell to 3,052 tons in March from 3,199 tons in February and 3,251 tons in January as a result of the cutbacks by smelters. Unsold slab zinc stocks at smelter's plants at the close of March stood at 87,909 tons, compared with 83,849 tons a month earlier and 28,804 tons a year ago. In addition, stocks held elsewhere increased 20,248 tons from 17,425 tons at the end of February and 8,882 tons reported a year ago. О |