Collusive agreements in the international copper market

Abstract

The study deals with the collusive agreements in the international copper market to determine the possibility of success of a producers' stabilization scheme from a historical perspective. The research relies on the assumption that the operational conditions, the structure, behaviour and performance of an industry are in continuous interaction and by examining the relevant variables included in those concepts it is possible to make a general assessment. The study analyses fourteen policies orientated to influence the prices of copper; six of them carried out before the First World War; three undertaken in the inter-war period, and five after the Second World War (among which a successful action organised by the major importing nations is included). However, the emphasis of the study is given to the analysis of the period 1950-77. The word collusion has been used without any ethical, legal or moral connotation. It only refers to the ability of the producers to coordinate their decisions in those markets in which sales are highly concentrated in few producers, determining that the actions of the sellers are interdependent since the decisions of each of them have considerable repercussions on the rivals. The general conclusion is that the structure of the international copper market has become less concentrated and increasingly complex making more difficult the operation of any producers' collusive agreement. The current policies implemented by the governments of the major exporting nations have been creating the conditions for a more competitive and complex structure of the industry, reducing the possibility that concerted action can succeed.