SOVIET AND EAST EUROPEAN ROLES IN WORLD MARKETS FOR SELECTED MINERALS AND METAL

Created: 8/15/1975

OCR scan of the original document, errors are possible

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lim! Soviet and East European Rolesn World Markets for Selectedand Metals.

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Malashevich, Treasury

'Office of Raw Materialsstudy requestl Uoe<as input to Treasury's studies ofconunodity markets

uiuithis report briefly examines current "MjSoviet and east european supplytions for bauxite, iron ore, copper, ^jlead, zinc, and tin; plans forof thosero-umtjection of these export surpluses or needs

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Soviet and East European Roles in World Markets "tor Selected Minerals and Metals

copper

The USSR and East European countries are not exporters of copper in their trade with non-Communist countries. et exports amounted toons. The USSR, with shipmentsons, "was the principal exporter.

et exports will increase substantially,dramatically. The principal source will beis moving ahead rapidly;-in development andof its rich copper resources. Polish productionaraountodonssonsnd mayons ajor boost to the expansion programillion.the

London-based affiliate of the "Chase Manhattan Bank. The funds will be used to construct raining and metallurgical facilities that will raise annual output of copperons. The scheduled date for completion ofajor project ia a rye share of the output from these facilities will be earmarked for export to hard currency countries to earn foreign exchange for repayment of the loan.

The USSR's plans for copper production in the latter

part ofce not known,he level of annualon-Communist countries toons seems feasible. Yugoslavia plans toits output of copper, whichonsoonsut most of the increase probably will be required for internal needs and commitments to other Communist countries.

et exports ofthe USSR and.Eastern Europe in trade with non-Communist.countries may increase to.ons. Polish exports alone mayons by that year if expansion projects keep on schedule, roughly matching anticipated Soviet exports.

Lead

The'OSSR and'Eastern Europe are essentially self-

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sufficient with respect to supplies of lead. In.limited

trade with non-Communist countries ir. recent years, exports

have generally exceeded imports, altliough only by small

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Plans for expansion of production of lead in the USSR,

Poland, Yugoslavia, and Bulgaria maketrengthening

Of the supply positions of these countries. However, lead

is in less ample supply than, zinche metal with which

lead is usually associated in mineral formand increased

output is likely to be allocated mainly to domesticr other Communist countries. et exports in trade with non-Communist countries may increase, but are not

likely toons annually. In the period

0 the USSR may be able to expand exports of lead

as resources of-lead and line in Eastern Siberia are developed.

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The eventual scale of output and the pace of development of projects in the new areas cannot be.estimated at this time.

Zinc

The USSR and Eastern Europe produce enough zinc to cover their needs andurplus for export to noh-Communist countries. Net exports to non-Communist countries have ranged fromons annually in. The USSR has been the major exporter;its shipments to non-Communist countrieseak0 tons3 before dropping back to0 tons Poland and Bulgaria account for most of the exports from Eastern Europe. Yugoslaviamall netof zinc in trade with non-Communist countries, its exports being largely offset by imports of zinc in different. form. The other countries in Eastern Europe and the USSR nave imported only negligible amounts of zinc from non-Communist countries in.

The USSR, Poland, Bulgaria, and Yugoslavia areprogramr. to expand their; zinc industries. Althoughseem geared mainly to domestic needs andto other Communist countries, some furtherexports to non-Communist countries is likely. Byexports of zinc may "be on the order of

Over the longer run, the USSR may have even larger amounts of zinc available for export, although the exact amounts cannot be estimated at this time. The Soviets plan to develop large deposits of zinc in Eastern Siberia, but projects to develop mines and construct metallurgical facilities are not likeiy to be completed before thender the best of circumstances.

Tin

The USSR is an important world producer of tin. Output4 was about one-third of that of Malaysia, the world's largest producer of mined tin. East Germany andare the only producers of tin in Eastern Europe. Their output is very limited.

The USSR meets most of its needs for tin from domestic

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production, but it relies on imports to deal with shortages that have persisted for many years. Imports have averaged

bono annually for tho past decade. Eastern Europe depends on imports for nearly all of its tin. Its imports amounted to0 tons Soviet and East European imports of tin hove come mainly from non-Communist countries, although China has suppliedons annually in recent years.

To meet needs for tinQ East European countries probably will have to increase imports above current levels byons. Host of the increased amount probably will have to be obtained from non-Communistbecause China is likely to continue Its present practice of marketing tin mainly in hard currency countries. The USSR probably will be able to meat much, if not

all, of its increased needs for tin0 from domestic

production. Steps axe being taken-to increaoe output^at

existing mines and to initiate production in other locations. The Soviet objective is complete self-sufficiency but, as yet, there are no firm indications that the objective can be attained by the end of the decade.

On balance, the USSR and Eastern Europe probably.will have to increase their annual imports of tin from non-Communist countries from the current level of0 tons to0 tons by

Bauxite

The USSR and Eastern Europe are net importers ol" bauxite, and its equivalent in the processed form of alumina, in trade with non-Communist countries. The USSR accounts for virtually all of the imports. t importedons Of bauxiteons of .alumina from non-Communist countries. Yugoslavia is the major exporter of bauxite in Eastern Europe'. Most, of its exports of bauxite are to the USSR and Eastern Europe, but annualto Western Europe have amounted toons in the past few years. Hungary, supplies Western Europe with small amounts of bauxite and alumina, che 'combined total of such shipments being estimated at lesstons of bauxite equivalent annually in recent years;

0 the USSR'plans substantial increases in imports of aluminous raw materials from both Eastern Europe and non-Communist countries. The major increase from non-Communist sources is the planned delivery of bauxite from Guinea. Annual imports are to riseons4onsew years. Plans for increasing imports of bauxite and alumina from other non-Communist sources are not known, but overtures to other suppliers suggest that the overall increase in imports over4

level,mayons of bauxite, including bauxite equivalent In the form of alumina.

Yugoslavia and Hungary probably will be unable toexports of bauxite or alumina to non-Communistin the period up Yugoslavia plans to increase production of bauxiteillion tons, from4 levelillion tons, but the additional output probably 'will be required to meet substantially increased commitments to the USSR as well as to support an ambitious domestic program for expansion of.aluminum production. Similarly, Hungary's plans for expanding production of bauxite seem, geared mainly to meeting coxxitraents to the USSR and other countries in Eastern Europe.

Iron "

The USSR is tho world's largest producer of iron ore. It meets all of its own needs, most of the needs of Eastern Europe, and has an additional surplus for export to non-Communist countries. Among .the countries of Eastern Europe only Yugoslavia produces enough iron ore to be virtually self-sufficient.

Notwithstanding the USSR's impressive capabilityupplier of iron ore, the USSR and Eastern Europe,roup, are net importers of iron ore in their trade with

non-Communist, countries. In tbe USSR exportedillion tons of iron ore to tho latter but, in turn, Eastern Europe imported aboutillion tons from them to supplement theillion tons obtained irom the USSR.

et imports of iron ore by the USSR and Communist countries of Eastern Europe probably will increase considerably over the current level ofillion tons. On the basis of planned production of iron and steelho countries of Eastern Europeexcluding Yugoslavia which seems capable of,meeting its needs from domestic outputwill xequire an estimated increment to present supplies of iron ore of aboutillion tons. With their limited resources of iron ore, reflected in graduallyproducing in recent years, these countrios willto rely on imports to satisfy all of tho increased needs and possibly to provide some additional amounts to compensate for further declines in production.

Moot of the new supplies needed0 will have to be obtained from non-Communist countries. The USSR, which nan fallen behind schedule in its current five year program for expansion of its iron ore industry, probably willto limit the growth in exports to Eastern Europe. Annual increases inave amountedillion tonsate that would provide Eastern Europe with only

9 million oi its estimated additional requirements ofillion tonslready there is clear evidence that the countries of Eastern Europe are preparing forincreased dependence on sources other than the USSR for iron ore in the future. In particular, Poland and Romania, the two countries with the most ambitious plans

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for expansion of iron and steel production, have signed contracts or are negotiating for large deliveries of iron oreong-term basisariety of suppliers in India, Sweden,lgeria, Chile, Liberia, and elsewhere.

In the face of its own growing needs and those of Eastern europe, the USSR probably will be unable to increase exports of iron ore to rion-Conwiunist countries by more than small amounts in the remainder of the current decade. The Soviets have shown interest, however, in obtaining Western financial participation in projects to develop iron ore resources. Finland is helping toew mining and pelletizing complex in Karelia in exchange for annualof about one million tons of iron ore7. When the entire complex is completed, and rated annual capacity ofillion tons of: pellets is reached, the USSR may beosition toart of this total. Other arrangements of this type have been considered with the Japanese in Eastern

Siberia and with the British on the Kola Peninsula but, if agreements are reached, the projects probably wouldar. least five years for completion. Such arrangements could make possible substantial increases in Soviet exports pf iron ore to non-Communist'countries in, but

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the amounts cannot be estimated at this;:time.

In terms of the outlookowever, tho USSR and Eastern Europe,roup, probably will remain net importers of iron'ore in their trade with non-Communist countries. Net imports'of iron ore may be no higher thanillion tons if the USSR is able to provide about one-third of Eastern Europe's additional, needs and to increase exports to non-Communist countries at the same rate as in recent years. But net imports could reachillion tons'if the USSR proves unable or unwilling to increase its

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present: deliveries to Eastern Europe.

ugust 5

Original document.

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