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MB CENTENARY: The 1940s – closure of the LME
April 02, 2013 - 12:26 GMT
Metal Bulletin centenary
By Christmas 1940, the “phoney war” of late 1939 and early 1940 was over and after a year in rented offices and homes in Leatherhead, Metal Bulletin settled into its wartime residence: Newland House in Eynsham, near Oxford.
In residence were the Tarring and Cordero families, plus office manager Jack Harrison, his family and the editors’ secretaries.
The Rice-Oxley family lived separately nearby.
Printing took place at Aldens in Oxford. The difficulty – or impossibility – of sending Bulletins overseas cut the pre-war peak circulation of 1,800 in half, although advertising suffered less than might have been expected in the government-controlled markets of the time.
Announcements of changes to government controls on metals usage and prices became an important part of the coverage.
A surprising amount of information was also garnered from published and private sources in Germany and enemy-occupied territories.
The problems of paper supply, dispatch and printing experienced during the first world war were repeated, but, once again, no issue was lost.
In May 1940, the cost of a subscription was increased for the first time in 21 years.
Advertisement manager William C. Adderley remained at Ibex House despite the bombing of London; miraculously, the building was never seriously hit, although it lost its windows.
As late as March 1940, Harry Cordero was able to make a trip by air to Paris and Brussels. Though these cities were closer to the German army than London, preparations for invasion were less evident.
During the conflict, Leslie Tarring liaised regularly with Non Ferrous Metals Control in Rugby, where Ronald Prain – later to head Rhodesian Selection Trust – was a contact.
Another “neighbour” was Ross Stubbs, who single-handedly kept the Zinc Development Assn going from offices in Oxford. Like those working for the Tin Research Institute in Greenford, he had to invert his prewar remit from promoting the use of metal to conserving its use.
Tarring’s other ports of call included the Ministry of Economic Warfare and the US Embassy in London – but they made no contribution to writing the journal since all conversations were classified.
With imports curtailed by U-boat attacks on allied shipping, scrap became a much more vital element of UK metal supplies.
Early in the war, Metal Bulletin suggested that a trade association for non-ferrous scrap was needed. In 1942, one was duly formed, only to start squabbling with the ferrous scrap merchants’ association, which also had a non-ferrous branch.
Metal Bulletin was also an early commentator on the folly of armed services departments sticking to gold-plated materials specifications demanding virgin metals, when scrap would have worked just as well.
Metal price controls were introduced at the outbreak of war, though the LME continued trading tin until December 1941. The prices in force for most of the war were: copper £62, tin £276, lead £25 and zinc £25 15s.
Immediately after VE day in 1945, Harry Cordero was back on the trail in Europe, having been accredited as a war correspondent, while Leslie Tarring took one of the first transatlantic civilian sailings to New York.
Along with Winston Churchill and the British nation, Metal Bulletin celebrates VE Day, and urges the government 'to give us the tools and labour to start the peace job'
With markets closed and conventional metal merchanting at its lowest ebb, the traditional problem of squeezing a quart of editorial into a pint pot of space was at times turned inside-out, despite the reduced size of issues imposed by paper rationing.
This was when Harry Cordero started writing a series of articles entitled “Strange Stories of the Metal Trade” that formed the basis for the book From Babylon to Birmingham after the war.
In the same vein was a series of articles called “In a Metal Merchant’s Office”, which detailed the principles and practices of metal trading. These articles continued after the war and also became a book. It was later resurrected as the textbook Trading in Metals, which has run to several editions.
Almost coincidentally with the D-Day landings of allied troops in France, Metal Bulletin moved back to London – not to the City, but to the West End where rents were cheaper. The postal address was Jermyn Street, but the offices were in fact located in the Piccadilly Arcade, between that street and Piccadilly.
Before the decade was out, growth necessitated another move to 27 Albemarle Street, on the opposite side of Piccadilly, where the previous tenants had been the Polish government-in-exile.
The vital Bretton Woods meeting of 44 allied nations took place in June 1944. The implementation of the agreement in 1945 gave the world fundamentally fixed currency exchange rates against the US dollar for the next 27 years. Its more permanent legacy includes the International Monetary Fund and the World Bank.
At the same time, Metal Bulletin’s worldwide circulation began to slowly pick up again, but conditions in the UK were in some ways worse than they were during wartime, with continued food rationing, shortages of industrial raw materials and occasionally inexplicable government regulation.
This regime was not always to the disadvantage of UK semifabricators, however. With LME trading in copper denied by the government, allegedly in support of foreign exchange controls, controlled prices on the home market were set by reference to US quotations – namely the weekly E&MJ Metal and Mineral Markets export quotations.
The resumption of LME trading
The US quotations were sent to the Ministry of Supply by the British Embassy in Washington in the diplomatic bag. Metal Bulletin’s New York correspondent cabled them to London, where the journal did a brisk trade in selling the information to UK consumers two days ahead of the related UK government price changes.
Not surprisingly, when the arguments against the resumption of copper trading on the LME had finally been worn out by the autumn of 1953, UK semifabricators lobbied for a continuation of the control system.
In 1946, US president Harry Truman signed the act creating the US Strategic Stockpile. Its purchases, sales and holdings have been something of a wild card in metal markets ever since.
An event not immediately of metal significance – except to an important proportion of traders – was the formation in 1948 of the state of Israel. Its politico-economic impact has reverberated in the Middle East ever since.
Tin was the first metal to resume trading on the LME in 1949, as the Federated Malay States – a major supplier to the UK market, despite a hangover of problems from Japanese occupation – were in the sterling area. Lead did not follow until 1952, while zinc had to wait until January 1953.
Meanwhile, the two features that were to dominate steel news in the 1950s – British nationalisation and the formation of the European Coal and Steel Community (ECSC) – were already on the radar.
The UK coal industry was nationalised in 1947 and most of the steel industry followed in 1948. An energy crisis in the UK in the winter of 1947 was due as much to climatic causes as to political ones, but it brought the country’s fragile economy to its knees and succeeded in costing Metal Bulletin four issues.
Also coming to the fore in the late 1940s was militant trade unionism and its associated strikes and go-slows, in both Europe and North America. These remained a major factor in business life for the next 35 years.
At the macro level, the late 1940s saw the start of the Cold War between the Soviet Union and the west and the dismantling of old colonial empires. These events had huge implications for metals trading. Germany was the loser on both fronts, saying goodbye to its African colonies and losing almost half of its homeland to the USSR.
Berlin was landlocked in communist East Germany and then divided into four zones under US, UK, French and Soviet control. The Soviets thought that by blocking land access to Berlin from the west they would totally control it, but a massive airlift of food and fuel, starting in April 1948 and lasting for just over a year, faced down the threat.
At the same time, the Soviet bloc was progressively becoming a trade partner of the west. State-owned trading organisations eventually came to think much like their western counterparts, but initially their sometimes unnecessarily competitive metals offers were seen as a deliberate threat to the stability of western markets.
1949 was a busy year: it saw the formation of Nato and Comecon (the free-trade area for the USSR’s satellite states); the proclamation of the People’s Republic of China; and the first devaluation of the pound sterling since the Bretton Woods agreement.
The world – and the publication – reshaped
The USA, as the west’s superpower, increased its influence around the world, not least through its programme of Marshall Aid to war-ravaged countries in Western Europe and elsewhere, and its occupation of Japan.
Former colonial powers, notably the UK and France, granted independence to many of their former colonies. The most important of these moves was Britain’s withdrawal from India in 1947, leading to the formation of three states, originally called India, East Pakistan and West Pakistan. East Pakistan would later become Bangladesh.
France’s withdrawal from North Africa, Belgium’s from the Congo and the Netherlands’ from its territories in Southeast Asia came later.
Metal Bulletin was something of a beneficiary of these moves, as new trading entities sprang up in the former colonies that needed their own subscriptions and advertisements.
As the 1940s drew to a close, the publication’s next generation of potential directors began to arrive.
First was FB Rice-Oxley’s son Frank in 1948, following his military service. Harry Cordero’s second son, Raymond, joined in 1949, also following his military service. The baby of the three, Leslie Tarring’s elder son Trevor, was unfit for military service, but went to Oxford and arrived in 1953.
The closure of the LME at the start of the decade means a reading of world market metal prices in 1940 (except tin) is not easy, so the prices in the table below are for August 31 1939, the last day of LME trading.
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