Document K6MVzp8G4xwb0zQb9r41xovBx

FILE NAME: Eternit (ETER) DATE: 1977 Dec 1 DOC#: ETER107 DOCUMENT DESCRIPTION: Confidential Notes on Meeting RE Asbestos Fibre ( %{ J l'r'/KC p k i v a t e a c:o.\'!'Tm e n t i At. ?'O'-) i y 1st December 1977 No ` i>? on K <<' ' '-. - A-rilVn^ t o .? F i t i r i t i iv* h ^ l ^ n n ': . n i t 5 I, t . t. ;I . O o 1x t i n -- -Pdn -- M.-n c:u-;. ! -- v o a-- r . - 'Iniisnon , >rit ovomirer 1022 ^C P ri' .'j rn t Mr. Dr. H r. MrHr Hr.. M r. Mr. C . V. Newton,. TAN M, Orai f , E t e r n i t ( S u i t i c r i and ) J . C u v o l i o r , E t e r n i t f K r nr.c e ) E . 'do B r u y n , E t e r n i t : ( D o l g i u n ) ' P , B r o i t c n s t e i n , S t . Cob.ain-?on t-a-Wau-s#on R . Do m c r , E t e r n i t ( S v i t z e r i a n d ) A . K c i s d i i , TdeN J , D , P r o g g a 1 1 , T -2! 1 T h " Cvir r.^r. t. Vinr.ld A-wStq *jfits P i Vare. Dem and and R?) H ' :;n s i. c j n : t g n u stc l - u v c j . p i " i i b r i n v e n t o r i e s I t v i s apr-Dud t h a t aJ.J m a j o r u s e r s o f a s b e s t o s f i b r e hBti a c c u m u l a t e d e x c e s s s t o c k s d u r i n g the p a s t y e a r . The i n i t i a l i n c r e a s e had coma a b o u t ns a r e a c t i o n to the e n d i n g o f th e C a n a d i a n m i n e r s . ' s t r i k e i n 1'975To' som e e x t e n t , a n t i c i p a t i o n o f pr,c-,t| i n e r a a s o s a n d the b'ui.ld-up o f con t i n g e n c y 3 toeks a g a i n s t r i s k s to supplies.- f r o m S o u t h e r n A f r i c a h;avo c o n t r i b u t e d to t h e 'biiiid-up o f s t o c k s . But t h e main reaso n why in v e n t -- orifes h a v e c o n t i n u e d to b e in- o x c o s s orf r e q u i r e m e n t s has been the d e p r e s s e d l e v e l oT a c t iv it y i n the construction industry, especially in Europe, The excess o f in v e n to ries i s probably greater than i t m i g h t a p p e a r a t firs-t s i g h t -, rs i n c e m o s t m a j o r c o m p a n i e s are a t t e m p t i n g to p u r s u e p o l i c i e s to r e d u c e , the l o v e l ofi f ib jrc s t p e k s -- from., s-ay, 5 --6 m o n t h s ' u s a g e to 3 --^ mon-ins' usage for plants in Europe* A g a i n s t t h i s b a c k g r o u n d , cTcrnand f o r f i b r e h a s b e e n very sla c k in 1977i and the outlook for 1978 looks r a t h e r blfrait, L i t t l e o r no im prov em ent i n demand i s e x p e c te d in Europ e an d J a p q n , thotigh a m a r g in a l pick-up i s l i k e l y i n the U S A . T h ere is a ls o soidb e v i d e n c e o f a p i c k u p i n L 'a t i n A m e r i c a a l t h o u g h e v e n h e re i n v e n t o r i e s era c u r r e n t l y h ig h e r than fo r soma y e a r s . S i m i l a r l y , some i m p r o v e m e n t may talee p l a c o i n fibre markets in tho Par E a st and Middle East, but dem and w i l l s t i l l h o l o w e r ttian h e d boon e x p e c t e d earli or. ) ;| 9.* - 2 In re sp o n se to Lhest po or m arket c o n d itio n s , f ib r o p r o d u c t i o n i n Canada mo/ be l o v e r i n 1978 b y some 15-nO ii- F i b r e a x p o r i n f r o m th e USSIl to t i . i d i t i o n a l m a r k e t s may a l s o s u t l e r , b u t t h i s may cnu.10 t h e USSR to s e e k now m a rk e ts, t h u i f u r t h e r d e p r e s s i n c th e m a r k e t f o r f i b r o free Vo? te r n s o u r c e s . P r e s e n t i n d i c a t i o n s -.r? t h a t C a n a d i a n f i b r e p r i c e s w i l l b e h e l d a t t h e svtrv l e v e l s a n n o u n c e d f o r 1 9 7 3 , and Hint r e d u c tio n s In o utp u t w i l l be the c h i e f r e s p o n s e to s o f t doasind c o n d i t i o n s . N e v e r t h e l e s s , th o r o i s bound to bt p;*esr.urc on C an ad ian p r o d u c e r s to c u t p r i c e s in o r i r to m ain ta in s a l e s , p a r t -- i c u i n r l y a s t h o US51 may v e i l i n d u l g e i n p r i c e c u t t i n g V h i l o AfricaVti p r o d u c e r s aro u n l i k e l y to reduca output. 2 T h o l . o n r - T o r m Wnr-Vri. and bunpLv I-osi cioh tea Demand R e v i s e d f i b r e denai:i p r o j e c t i o n s f o r 1980 and 1 9 3 5 , v h i .c h h a d b o on c i r c u i a t e d h o f o r o this m e e t i n g , w e r e ' dis.cussod. I t was pciintod out th at the e s tim a te s f o r 1 9 7 6 r o t a t e d tef '" a p p a r e n t c o n s u m p t i o n " ( t h a t Is , production, plus im ports, lo s s exports) ra th e r than to a ctu a l u s a g i. A cco rd in g ly, because o f tho la r g e b u ild -u p o f s ta c k s in 1976, tho consum ption f i g u r e s s h o w n f o r 1-91?6 e x c e e d e d a c t u a l u s a g e i n a number o f c o u n trie s . V est Germany and Japan are k n o w n t o bcs i m p o r t a n t e a s e s i n p o i n t . I t y a s d e c i d e d to c a r r y out soma i n v e s t i g a t i o n s i n t o t r e n d s i n f i b r e in v e n to r ie s h eld by mines and m ajo r u s e r s i n 1 9 7 7 i n t h e h o p e s>f fcablishing a firm er base from w hich to make p r o j e c t i o n s o f r i b r e co n su m p tio n (so 6 also Section p},, Bvon le a v in g aside t h e ir o v er-astim atio n o f a c tu a l u s a g e in 1976, the rmYiSod demand p r o j e c t i o n s w ere g e n e ir a ily l o v e r ih n th o s e made i n 1 9 7 6 . T h i s w ou ld i m p l y s m a l l e r d . c f i c i ' c r . e i e s in. G r a d e k* s a n d 5 *s i n t h o e a r l y 198t)' s tfcsrn h h s b e e n a n t i c i p a t e d i n t h e 1976 stu d y . Moreovetr, tho g e n o ra i f e e l i n g o f the m e e tin g was th at evtm the r e v i s e d demand p r o j e c t i o n s v o r o more, l i k e l y t o - o v a r - o s t i m a t e t h a n u n d e r - e s t i m a t a future r a t e s o f cotistunp t i o n . R e yiso d fib r e p ro d u ctio n ostim atos had not y e t been c o m p le t e d . Tho fo e J -ia g Was, h o w e v e r , t h a t p r o d u c t i o n b y c o r t a i n e s t a b l i s h e d p r o d u c e r s ( e . g . J o h n s --M a n v i l l c ) m ig h t bo down on e a r ilio r p r o j e c t i o n s ; th a t c c r c a i n m a r g in a l m ines m i g i t ha fo r c e d ou t o f b u s i n e s s b y tho d e p r e s s e d s h o r t - t c m i demand s i t u a t i o n ( U n it e d A s b e s t o s h a s a l r e a d y become im s o lv o n t) ; and t h a t no new' m in es euro l i k e l y t o b o o p t a n e d i n t h e f o r e s e e a b l e f u t u r e . 1. - 3- Thus, p ro d u ctio n p ro jec tio n s nrc nlso lik e l y Ku-'t-r t h a n t h o s e made i n 19T , 5 0 thot t h e pn i I't 1 1 t>" o C eie r i cl o n e i o s i n C r u d o k ' S a n d ramiti ill. to bo 5*3 T h c M e e t i n g w-an u n a b l e to c.omp to a n y Tirm c o i l c U i s i o n s , alio-lE. the l i k e l y l o n g - t e r m b a l a n c e be tveon f i b r e supply and demand. I t was f e l t that iliis m u s t h e r e c o n s i d e r e d d u r i n g 'the c o u r s e o f 1 9 7 8 in the l i g h t o f the c o m pio ted r e v i s i o n s to tho p r o d u c t io n ost-ifcatts, the in f o r m a t io n it i s p rop osed to g a t h e r o n R v e n o n ts i n i n v e n t o r i e s d u r i n e 1 9 / 7 , and a s u b a c q u e a t a t t e m p t to d i s e n ten (ri s h o r e --t e r m from loop- tern factors n ffo c ti/ig demand. T h e C e ^ n o ti t f y ette,, s- <if A f.V>rs res-Comet*,t_ r r n c u e t s Th m a i n co-ncltislqrts o f tire-j o i n t s t u d y o n t h i s t q p a i : v e r e accepted- b y t h e mo,e tingf. T h e s e c o n c l u s i o n s h a d been c i r c u l a t e d p r io r to the m eetin g , I n p a r t i c u l a r , i t w a s t h e c e n e r a i v i e w o f th o moetir.i,7 t h a t , i f f i b r e , p r i c e s ( e x p r ,-ssed i n l o c a l c u r r e n c i e s . ) v e r e t o c o n t i n u e to r i s e b y m uch m oro t h a n t h e gone-.-al ievel of in fla t io n in tha in dustrialised countries a.t l e a s t , t h e m a r k e t s h a r e o f asbcis t S s - c e m e n t p r o d u c t ! w o u l d b e e.nrdaTTger trd. I t was p o i n t e d o u t t h o t t h i s s i t u a t i o n e Veci s o m e t h i n g to t h e f a c t t h a t , p r i o r 1972, a s b e s t o s f i b r e p r i c e s had tended to r i s e b y l/nss than th o s e f most o t h e r m a t e r i a l s , and th a t t h i s taui l e d to t h e d e v e l o p m e n t o f m a r k e t s f o r a s h e s t o s --cerne-.'it g o o d s t h a t v e r e 1 m a r g i n i l i . ThP'ser v'n l d b e t h e m o s t s u b j e c t to c t o s i o n np v t h a t f i b r e p r i c e s w e r e rolaiis.voly high.. T h o g e n e r a l f . e l i n g o f t h e m e e t i n g w a s t h a t t h o minali vere now conscious of tha im plications o f those com petitivo trends for th eir fib r e p r ic e s . Never tbnliMjs, a n y re-cpgni tictn o f th e n e e d f o r .Aodo r o' t i o n i n p r i c --mjj p o lic ie s also im plied that the opening o f new mines w o u ld , b e d i s c o u r a g e d e V eri f u r t h e r . T h e q u e s t i o n was r a i s e d o f u s e r co m pa nies b u y i n g fabbro in e x c e s s o.f t h e i r n e e d s i n p r d e r to s u p p o r t the, m ines oVor the short- term d e p r e s s io n in dem and, so encourage a steady trend in fib re prices re la tiv o tu those o f competing m aterials, rather than d isrup t ir J u m p s , Thi-S w a s r e c o g n i s e d as. a h i g h l y c o m p l e x q u e s t i o n o n w h i c h e a c h C o m p a n y w o u l d h a v e to m a k e up it s own mind. General Fnctors A ffectln r Futuro Trends in U ic W o r l d /v in e s tn a F i b r e M a r h o y D uring tho course, o f tho ro v iew of the w orld f ib r e supply/dcmand balance and competitive trends in esbor.tos-ccmorit p r o d u c t s ( S e c t i o n s 2 and 3 a b o v e)., 'tbq iinpor-t o f the a s b e s t o s h e a l t h i s s u e a n d the d o v c l c p w ^ n t of su b stitu te s for asbestos was discussed. - h- O n a s b e s t o s lasrt h a a L t h , tho f io n o r a l f e e l i n g W as t h a t thcro had b w n a general h a rd en ing O f a t t it u d e s and n q u i c k e n i n g ?-\r.u i n the movement. t o w a r d s t i g h t e r r e g u l a t i o n s . .'i/i v e r L h u l a s s , the-ro w a s c o n s i d e r a b l e v a r i a t i o n , ev-*n tho i n d u s t r i a l i s e d c o u n t r i e s , i n the decree- co w h i c h tho i s s u e w a s a f f o c t i H f a s b e s to s-usiv-f i niu n t r i e s . Norway appear*, to ho f o l l o w in g S w e d e n to w a r d s c l o s u r e o f i t s asbosvi-i-iicMciit i n d u s t r y w i t h i n th r o e y e a r s . I n th UK the p u b l i c i t y g i v e n to t h e i s s u e h a d h a d some m ino r i n f l u e n c e on demand f o r a:boto.s-cm ent p r o d u c t s , b u t t h i s wa.s -i,jrd to i s o l a t e f r o m o t h e r f a c t o r 's .. -'Tighter asbosi.-ia d u s t r e g u l a t i o n s w e r e e x p e c t e d to. re su lt from niu o f f ic ia l inquiry now ta k in g p l a c e , but i t was hoped1 snd expected that these would not prove p r o h i b i t i v e . Thofo was co n sid era b le u n c e r t a i n t y about the effect o f ehH health issue On demand fo r asbestos textiles. ' Tho asbestos JUialth issue was becom ing a fa c to r in the German eox-avuction industry, bur there was as y o t s c a r c e l y any p a t i c o a b l o e f f e c t i n -the _ c o n s t r u c t i o n sector in Fresco ?r Italy. I t was f e l t -ciu t f u r t h e r l e g i s l a t i v e p r e s s u r e d i r e c t e d s p e c i f i c a l l y .-a^aipat tho. us-c o f _c r o c i d o l i to w a s u n l i k e l y ; but- a t l a n f c i o n was d r a w n to p o s s i b l e EEC- r e g u l a t i o n s nzcfc t h i s . T h o m e e t i n g ITarl t hafc the p o s t u r e t h e a s b e s t o s i n d u s t r y should adopt the asbestos h e a l t h i s s u e v a s to r e c o g n i s e thair the us (o r r a t h e r m x s- nso ) o f a s b e s t o s can bo dangerous i f ptoper p r e c a u t io n s arc not ta k en , but to demonsrirtV p o s i t i v e l y tho g r e a t p r o g r e s s th a t h a s b e e n a n d 1* b e i n g mad t o w a r d s -its s a f e u s e . On the questznsa of substitutes f o r a s b e s t o s , i t was f e l t t h a t , w h il e , xis* ft?bio3tos h e a l t h i s s u e h a d g i v e n i m p e t u s to t h e ir doVe\apment doubts abo u t tho long- term availability 25-50 y e a r s ) -and r e l a t i v e p r i c e of key asbestos* fib re grades wore a moro fundam ental f a c t o r . The aff^ta on demand f o r a s b o a t o s aro b e g i n n i n g to be f e l t is * x fcfaall way i n f l a t s h e e t s , b u t t h e d evelopm ent oiT c-orrugatcd s h e e t s and p i p e s u s in g , g l a s s rather than r o i n f o r c o m c n t i s s t i l l so.mo w a y o f f . I n t h e meantim-g, it. was f o l t t h a t i t i s v i t a l t-o m a i n t a i n t h e m a r k e t f<S*r asjP.estoi-- c e m e n t , n o t o n l y a s an. e n d i n i t s e l f b u t alJS4 ki> e n s u r e an o r d e r l y t r a n s i t i o n to s u b s t it u t e p m s d u o t * i f and when t h is b ecam e n e t e s s a r y . 5 . F u t u r e C o l l hbnwrwxti-cm nnd Work o n ' M a r k e t T r e n d s m -tv>o.sto.i Ki hro I t was agreedi that -- ( i ) Furthc-jr ta-1 J-aboration b o t w e e n E t o r n i t , S t . C o b a i n a n d T tft t>TK s t u d i o s o f a s b e s t o s f i b r e s u p p l y a n d demand trvhJsi was w orthwhile and sh o u ld c o n t in u e . ' I.J.) R t e r n l t , i n c o n j u n c t i o n v / l t h TiN", shod. : 1- c o m p l e t e reviacil p to jfc tio n a of asbootos fib ra ji'nluotion. 1. i i ) Tli c t h r e e c o m p a n i e s s h o u l d n t t e m p t t o niu-rrt e s t i m a t e s o f tJ1 c- Mo v c - nr n t i n f i b r e i n v e n t o r i e s b f v . i f i n t h e be (Tin n i n e anil e n d o f 1977 T o r t h e mi n e i nd u s e r p l 'i i i . i 3 i d i. : i i cli t h e y h a v e i n t e r e s t s , v:;:' n n v i e w t o a s s e s s l n u more sc oi ira t e l y tha c u r r e n t To'-ul o f a c t u a l f i b r e u s a ~ f . The e f f e c t s on the t o t a l r e v i s e d f i b r e c o n sump c i o n e s t i m a t e s w o u l d h a v e t o b-e t e l e r r e d f r o m the p a rtial data collected. [iv ) T h e f i b r e c o n s u m p t i o n e s t i m a t e s artel t h r b a l a n c e shoutcj b e r e v i e w e d a g a i n i n the an d ( i l i ) Abo v e . siipply/demand Jl/jht o f ( i i ) t y a s a l s o i.(Treed t h a t a " w o r k i n G p a r t y " meicruif: s h o u l d be r i d to r b v - c v the r e s u l t s o f work on ( i i ) - ( : V ) Above. T h i s l o t i a g w a s pi-6 v i c i o n a l l y f l x . c d f o r the. s e c o : d . week o f ay 1 9 7 3 * w i t h ICrtn k e y t ha most p r o b a b l e day.. A f u r t h e r s u m m i t 11 m e e t i n g v o u j a -' . i s o be h e l d ; a n d t h i i ' v * a a r r a n g e d ar t h e m o r n i n g o f J0 t b O c t o b e r 197 i n Zurich- , L n a l l - y , i t v.as u r .r c z t l t h a t i t s h o u l d b o in < k c;^ te*J t o a h n s - i l a n y i l l e ( l i n i n g D i v i s i o n ) t h a t t h e i r in. | l a b o r a t i o n i t h e n e x t " sum.mi t," m e e t i n g ( b u t n o t a s y e t t;h t h e w o r k i n g r o u p ) wo ul d bo Welcome, pro^idQd t h a y t h e y latya soiriething l e v a n t and p p s i t i v e to c o n t r i b u t e . I t was -i,fthcr agreed .aat t h i s i n v i t a t i o n s h o u l d bo e x t e n d e d o r a l : ? - i>n an i n f o r m a l , errsonal basis-, r a th e r than in w r itin g .