March/April 2000
By Si Wakesberg
Si Wakesberg is New York Bureau Chief for Scrap.
You gather a lot of memories in more than 50 years of reporting on the scrap industry and working for its trade associations. Here are a few more vignettes from my mental scrapbook.
Behind the LME Nickel Contract. About a year after the London Metal Exchange (LME) began trading nickel, I had lunch in a lovely restaurant overlooking the Thames with a high-ranking LME official. After our meal, my host offered me some port and a Cuban cigar. Then the conversation turned to nickel.
For background, nickel had experienced a checkered market career in the 1960s and 1970s. The market was then dominated by Canadian nickel producers, particularly Inco, which was said to have 80 percent of the Western World market. Also, at that time, the producer price was the world price. A series of strikes in those two decades, however, caused consumers to begin looking anxiously for additional sources of supply, and this eventually opened up areas of competition.
Throughout the 1970s, a tug between producers created more ambivalence in the market. Finally, in April 1979, LME introduced its nickel contract.
At first, the producers were cool to the contract and generally remained outside the trading arena. Merchants, though hopeful for LME’s success, were wary because of the power of the producers.
For months afterward, even though there was a daily LME price, the quotations set by producers still dominated the market. Even as late as April 1982, there was a split price for nickel, with LME quoting $2.45 and Inco quoting $3.29. Merchant prices were around $2.50 to $2.60. When I was in London in June 1980, nickel had entered a recessive price period, quotations were falling, and LME trading lagged.
At our lunch, the LME official, puffing on his cigar, looked out at the mist floating over the Thames. “I give you this with some caution,” he said. “If trading in nickel on the exchange remains as low as it has been, we may be forced to abandon the contract. But,” he added, “don’t quote me.”
I had a major story in my possession, yet I was hesitant. Had the port wine affected my host? Was he really serious about abandoning the contract? How much time would the exchange give nickel trading? I decided to keep that news to myself for the time being and not rattle the market with gossip.
Well, business picked up. LME stuck with the contract. And when a top Inco official gave his blessing to the LME price, the die was cast and the exchange’s nickel price became a world standard.
But there may have been a moment when the fate of the LME nickel contract hung in balance.
The Old and New Copper Club. Bill Meissner was once a powerhouse in the Department of Commerce, a public official with a wide knowledge of copper, and one of the men instrumental in organizing the Copper Club.
When Bill came to a meeting of the National Association of Recycling Industries—an ReMA predecessor—and told us about the Copper Club, he was not talking about a high-powered organization but rather a small club that attracted fewer than 100 attendees to its early meetings.
Then copper began to attract many followers. Perhaps one reason was the Comex copper contract, which brought traders outside the metal industry into the copper market. Soon, Copper Club meetings were filled with merchants and traders, as well as producers and smelters. And, of course, scrap copper was seen as an important commodity, so scrap processors began to stream into the club.
Bill Meissner would hardly recognize his old club today. In February, when the Copper Club holds its annual dinner at the Waldorf-Astoria Hotel in New York City, the place is jammed with companies having their own “showrooms,” so to speak, to entertain their customers. The Copper Club today is filled with young people, many of them traders in prestigious companies dealing in many commodities, including copper. The evening is a gala affair with every seat taken.
Bill was one of those pioneers who helped set a course. The Copper Club today, however, represents what has developed into a more glittering and star-studded industry.
A Man of the World. Over a lifetime of meeting people, I have met some who had a special magic. One remarkable scrap executive who stands out in my memory is Fred Strauss.
Fred headed Frema Smelting & Refining Co. in New Jersey, but he had an office in Paris and a summer home in Hendaye, a lovely town on the west coast of France, near Biarritz. Anyone with an office in Paris seemed fortunate enough to me. But a home near Biarritz! That was like being granted wishes from Aladdin’s lamp.
One summer, I happened to be going to Biarritz, and I mentioned that to Fred. “Stay at Le Palais,” he urged. “It’s expensive, but you’ll never forget it.”
He was right. Le Palais, the palace Napoleon III had built for Empress Eugenie, had been transformed into a hotel by the French government, and it was fabulous.
What was even more fabulous, however, was that Fred came over and picked up my companion and I one day and took us to his home in nearby Hendaye. We spent an enchanting afternoon with Fred and his wife, lunching in their garden in the midsummer sunshine.
Fred is gone, and this is my brief testimonial to a man who lived in the United States, had an office in Paris, and a delightful home on the west coast of France. What more could anyone have asked?
Newsworthy Events. Once, when I worked for a trade paper, there was a news ticker in our office that churned out information on wads of paper. Most of the news that came over the ticker was pretty ordinary.
But when some vital news was on tap, the ticker rang a bell. Only twice did the ticker ring four times, announcing something earthshaking. Both times, we reporters ran to the ticker to see what had happened. And on both occasions, I cut the tape and stored it for posterity.
The first time four bells rang, it was to announce grimly that an atomic bomb had been exploded over Hiroshima. Many of us didn’t fully grasp the immensity of that announcement until much later. But we knew something ominous had happened.
The second time four bells rang, it was to announce that Bobby Thompson of the New York Giants had hit a home run in the ninth inning against the Brooklyn Dodgers to win that year’s National League pennant race. The impact of that bat still reverberates in my mind. •
You gather a lot of memories in more than 50 years of reporting on the scrap industry and working for its trade associations. Here are a few more vignettes from my mental scrapbook.