The Iron Age 1926-01-07: Vol 117 Iss 1

ee WR fee. 25) Ss 2% © ESTABLISHED 1855 New York, January 7, 1926 THE IRON AGE VOL. 117, No. | Steel Trade Expects Much of 1926 A Remarkable Output in 1925, but Competition Was Active and Prices Suffered—A 22 Per Cent Greater Year Than 1924, but with Similar Production Cycle . ONDITIONS within and try point to continued in steel well into 1926. of sustained consumption has been added a convinc- ing one in the high rate at which buyers have been taking shipments in Decem- ber, a time when stocking is avoided. A Bright Outlook The steel trade knows that some of the cautions sounded in the past week in business forecasts are quite in order, but in the main it finds the tangible factors in the situation fully as prom- ising as those of a year ago. If it should turn out that the great wave of new con- struction loses some of its crest in the next twelve months, though all signs are that it will still run high, there is compensation in the railroad demand that of late has been above the average of the past five years. Track replacement will be on an unusual scale in 1926. Automobile com- panies now expect to equal their remarkable volume of 1925 car building. These three lines—transportation, construction and automo- biles—took between 55 and 60 per cent of the steel shipped from the mills last year. Large-Scale Consumption The high hopes enter- tained of last year as it opened were realized in large part, so far as volume of business went. But it was evident early in the year that some of without the indus- large-scale activity To other evidences MMUMDSOQIRONQUDAAN LS AAAAMAA 44 LAdAi10 A111 14405 14 ASAMAAERSLL | ASMMOSEOROSNNMMESURAUNAAMLEN GUT TNGG STEEN ESN MUU RAEN CLUE 1925 in Steel the surprise of the industry, 1925 made a new record in steel ingot output, the total being about 44,000,000 gross tons, or 7,200,000 tons more than in 1924. The previ- ous high mark was 43,619,000 tons in 1917. The year’s business ran over 20 per cent more than in 1924. In pro- duction 1925 was an 82 per cent year, while 1924 averaged 67 per cent. Consumers were often in the mar- ket and did little forward buying. Having small backlogs, the mills were keen to get tonnage, often at the expense of prices. Steel works operations ran nearly the same cycle as in 1924—a high rate in the first three months, which proved to be overproduction (though to a less degree than in 1924), a gradual decline to the year’s mini- mum in July, a slight pick-up in August, some gain in September, and in the last three months a close ap- proach to a record rate. Prices were highest as 1925 opened. THE IRON AGE composite (seven leading finished products) was 2.560c. per lb. early in January. Low point was 2.396c. in late August and early September. At the year-end the figure was 2.453c. or about $2 a ton less than in January. It was a poor year in merchant pig iron. Volume was greater, but prices lower than in 1924. Total pig tron output, about 36,750,000 tons; in 1924 it was 31,405,000 tons. a (coverennn it ycusnennr ys usanonney 4014) NLL ANNNP 1 the predictions made just after the election of 1924 were beyond the mark, particularly an inti- mation that the steel companies would have more orders than they could take care of; but even so, con- sumption in some lines was on a greater scale than in any preceding year. Two influences had much to do in determining the year’s results for the producers of steel. One was that all the steel com- panies had been doing much to make their plants highly efficient, while individually they seemed not to appre- ciate the extent to which the rest of the industry had been doing the self- same thing. The result was that, though some of the leading producers did a larger business than ever, each had a sense of getting less than its fair share. Then there was the ef- fect of the persistent pol- icy of short-term buying which consumers had car- ried over from the preced- ing year. As had been seen in 1924, the absence of good backlogs from the books of the mills led them to underestimate the ex- tent of the demand and therefore to be keener in the pursuit of tonnage, gen- erally at the expense of prices. Production Cycle Repeated The parallel between the production curves of 1925 and 1924 was striking. At the opening of each year production of steel was on the up-grade; in each, the peak was reached in March, followed by a four months’ decline to a 9) minimum in July; then a steady up-climb to the end of the year. In 1924, December showed a considera- } ble increase over November; at this writing it is not certain that last month exceeded November in like degree. In 1923 there was a strong upswing in the first three months, like that of 1924 and 1925, but the downswing lasted longer, continuing into December, while the rebound was delayed until January, 1924. This repeated cyclical movement has attracted no le attention from both producers and consumers, and the curves depicting it have well nigh acquired a standing with buyers along with those curves which represent the price changes over the same period, a I e determinatio! IT the lantities f irchases On I iges is de ed analysis, illuminated pictorial way, of figures sent to THE IRON AGE = e] I el rep Sel ing the various (¢ itlets for lled steel in 1925. At best these figures are esti ile r the steel companies themselves are often ignorance of the line of manufacture in which their ipments w inally go. But different years show differing rates of steel absorption, even in the main f consumption I he tonnag rought to the mills construc yn work made a new record in 1925, and that was f eeing that rallr | l og not o large. in { itput is lI n ne irs Fabricated ] teel contract | ! SSive rec ras i past tnree year 2,180,000 ne ons in Z - t OO ton ? ] ~ y > 60 ,O00 tor ) I mon impr ! imptio1 f teel iast year was prob: bly a inaerestimate, be ing based largely on the lessened scale of orders for ears and locomotives. Track work exceeded that of 24, being fairly comparable with the volume of 2 In the latter year production of standard section rails was 2,630,000 tons, while the estimates given THE IRON AGE by producers indicate 2,595,000 tons for 1925. On car steel the mills did better last year than would appear from the reports of new car orders While the itter totaled 78.000 (anart from those placed by 1 l VY | agall 135,000 ordered ‘ ! tually built and delivered 94,000 car ist year, or only 10,000 les than in 1924 A omobile cor ! ? vy ¢ ra VE eel ! ! cating 300. eral + y b for new I f pipe ling ! l the latte good demand upot mills Hou Oil | s 200-mile gas line en- > Co? Y itt Y } rger s1Z ths. ] \ I é n Z ne pipe ng for 150 milk 2 120 mile é é ind O ¢ e crop of ’ } , Y | eA A nig he ng ~ (dt) ; { ‘ to , ( ‘ r¢ y ~ ’ } yn 1 ? ly ] ree Tor aut ul her us¢ \ ne ¢ mM} el barre } iu on il ne first I more than in the first half of 1924 Farm equipment plants were busier than in any year since 1920, operations running up to 75 and 80 per cent of capacity. Fluctuations in Output As in 1924, the high point in production last year was reached in March, when steel ingot output was at 2 THE IRON AGE January 7, 1926 the rate of 50,000,000 tons a year. The low month was July, with a yearly rate of 36,500,000 tons. Thus the swing was from 68 per cent of capacity in the latter month up to 93 per cent in March. The year’s steel ingot output may be estimated at 44,000,000 tons and that of steel castings at 1,250,000 tons (against 1,120,782 tons in 1924), making the total of steel ingots and castings about 45,350,000 tons, compared with 37,931,939 tons in 1924. The high record was 45,060,607 tons in 1916. In the table below are given the production of pig iron and of steel ingots, also the total of ingots and castings, in the high war years and the years fol- lowing: Steel Ingots Pig Iron Steel Ingots and Castings, Gross Tons Gross Tons Gross Tons 59,434,797 41,401,917 42,773,680 38,621,216 43,619,200 $5,060,607 118 39,054,644 43,051,022 44,462,432 1919 . 81,015,364 33,694,795 34,671,232 1920 36,925,987 40,881,392 42,132,934 é 16,688,126 19,224,084 19,783,797 2 27,219,904 34,568,418 35,602,926 192 10,361,146 44,943,696 24 31,405,790 : 37,931,939 36.750.000* 44,.000,000* 45,250,000* *Estimated We estimate pig iron production for 1925 (includ- ng charcoal iron, of which statistics are not collected monthly) at 36,750,000 tons, against 31,405,000 tons in 1924, an increase of about 5,350,000 tons. As showing the fluctuations in output we have prepared the table below, giving the number and capacity of furnaces in blast at the beginning of each month. The largest number was 254 on March 1, with a daily capacity of 115,700 tons, and the smallest, 189, on July 1, with a daily capacity of 86,250 tons. Thus the range was from an annual rate of 41,200,000 tons at high, down to an unnual rate of 31,500,000 tons: Daily Daily No. in Capacity, No. in Capacity, 4 Blast Gross Ton 1924 Blast Gross Tons Jar 1 998 GR 280 July 1 129 86,250 Fet 51 111,150 Aug ] 190 86,420 Mar l 54 115,700 Sept 1 192 88,250 April l 245 112,380 Oct 1 - £00 92,050 May 1 2° 100.800 Nov. ead 206 97,950 June 1 i 196 89,550 Dec Ls*ss, Bae 103,800 The variations in the average daily rate of steel ingot production, month by month in 1925, as shown by statistics of the American Iron and Steel Institute, vere as follows: Daily Daily Mont} Production, Months, Production, 1925 Gross Tons 1925 Gross Tons Jar rere ee » 118,753 Febr August sie be 131,694 Mar September ..... 134,342 Ay October ..... .. 144,186 May November ..... 156,294 J CT ae eee Price Changes Were Many Last year’s fluctuations in market prices kept sellers ind buyers continually on the qui vive. The price curves and tables on other pages give a picture of this phase of the market. They show that while some products had considerably wider price swings than others, broadly speaking the highest prices of the year were n January; then came six or seven months of decline, teadier market in early fall, and in the last three months firmness and moderate advances. JANUARY ADVANCES DID NOT HOLD In analyzing what happened, steel makers admit it production was pushed too hard in the early months of the year, when consumption had not had time to get the expected post-election stride. The price advances of $2 a ton on plates, shapes, bars, wire and some other products, which were announced in Janu- ary proved to be a mistake, chiefly because their pur- pose was seen to be stimulation of specifications against lower-priced business taken late in 1924. Buyers had their doubts. It would seem that steel consumers bet- ter appreciated than did producers the new ability of January 7, 1926 the steel industry to produce, and of the railroads to transport the product speedily; also that they put their observations to good use. SHEETS CONSPICUOUSLY WEAK As prices gave way, manufacturers decided that only by full operation could they reach costs low enough to meet the situation. Thus overproduction was accent- uated. Sheet manufacturers were conspicuous for trying to get 100 per cent operation on a 75 or 80 per cent market. This demoralization in sheet prices extended over a considerable part of the year. As high as 3.60c. and as low as 3c. was done on No. 28 black sheets, representing a swing of $12 per net ton, or more than on any other product. With no less than 36 compa- nies producing sheets, a highly competitive condition is the normal state of the industry. Plates and wire products were second only to sheets in their exhibitions of weakness. Plates sold in the East as low as 1.55c., Pittsburgh, and 1.90c. was the high point. Bars made the best showing among heavy products. For ordinary lots 2c., Pittsburgh, was main- 160 poe 140 ip ee OS ATIONS in Daily Aver age Production of Steel Ingots and of Pig Iron During the Past Bight Years Show Con- siderable Parallel- ism. Monthly ingot figures of the 60 American Iron and Steel Institute and an rY pig iron figures of THE IRON AGP tell 20 + the story U THOUSAND OF GROSS TONS PER WORKING DAY Y/G /RPON- THE IRON AGE 3 in finished steel. Strikingly similar were the figures for the recovery. Pig iron came back 13.6 per cent in 17 weeks, or an average of 0.80 per cent per week. Finished steel rose 2.4 per cent in 11 weeks, or an aver- age of 0.22 per cent per week. Finished steel ended the year 4.2 per cent below its maximum level, recorded in January. Pig iron ended the year 4.3 per cent below its maximum level, also recorded in January. Pig iron maintained in 1925 the lowest average level in ten years. Only fractionally below 1924, it was well under the “panic” years 1921 and 1922—10 per cent below their average, in fact. Finished steel, while 10 per cent above the depressed prices of 1922, was, with that sole exception, at the lowest level since 1915. Steel was about 33 per cent below 1920; pig iron prices aver- aged less than half those of 1920. Exports Less, Imports More At intervals in 1925 attention has been directed to the fact that our exports of iron and steel have been distlattistisisitisiis tas tittisitas tial I918 I919 i920 1921 i922 i923 1924 1925 tained most of the year; but large buyers did not pay more than 1.90c., and in general that was minimum, apart from a few automobile company contracts. Apart from rails, on which the $43 price was main- tained for all the year, pipe and tin plate had the best record for price stability. In the latter there were the usual concessions from the $5.50 season price, and the largest buyers had a $2 per ton preferential. PIG IRON AND STEEL PRICES MOVE IN PARALLEI As shown on the accompanying chart on which THE IRON AGE composite prices are plotted, pig iron and finished steel moved during 1925 in lines more nearly parallel than has been the case in a number of years. Each reached its maximum for the year in January; each receded gradually but consistently to a minimum in mid-summer; each recovered slowly but steadily from that time until the close of the year; each ended the year at a level not far from that of April and about 4 per cent below the high of January; each held its year-end figure unchanged for several weeks through December. Pig iron last year receded from its maximum of $22.50 to a minimum of $18.96, a drop of 15.7 per cent. Meanwhile finished steel declined from its maximum of 2.560c. per Ib. to a minimum of 2.396c.,.a fall of only 6.4 per cent, or two-fifths as much as for pig iron. Moreover, the pig iron drop took place in 19 weeks, while the much smaller decline in finished steel occu- pied 29 weeks. The average rate of declination was 9.83 per cent per week in pig iron and 0.22 per cent ” decreasing, while our imports have been increasing. It is true that the tendency in our exports is downward, but it is not markedly so. Taking the past four years in pairs, the yearly average of our exports in 1922 and 1923 was about 1,990,000 tons (the totals for the two years being almost the same), while for 1924 and 1925 the average has been about 1,785,000 tons—roundly a 10 per cent falling off. The import increase has been considerably more in tonnage and in percentage than the export decrease; but the imports of finished steel by no means bore out ome of the prophecies made early in 1925 as to the great inroads French, Belgian and German steel were going to make in this market. As in other years, Canada was the largest buyer of teel from the United States, nearly 40 per cent of the total going across the border. Japan has ranked second for a good many years as a customer of our steel com- panies, but last year our shipments to Japan fell off in a marked degree. In the six years following the war Japan took, on the average, nearly 27 per cent of our iron and steel exports. Last year the percentage was about 12. Japan was a large user of American sheets, but is now prepared to roll in her own mills the greater part of her sheet consumption. Recent reports that Japan will buy rails in Europe to replace American rails in track in Japan were without foundation, but the fact is that Japan has been in the past year a con- siderably smaller buyer from American steel mills than before. Our exports of semi-finished steel in the first 11 4 THE IRON AGE months of last year were 96,000 tons, against 107,000 tons in the same period of 1924; of steel bars, 102,000 tons, against 92,000 tons; galvanized sheets, 148,000 tons against 100,000 tons; tin and terne plates, 148,384 tons, against 148,428 tons; rails, 147,000 tons against 185,000 tons; pipe and fittings, 221,000 tons against 197,000 tons. Our machinery exports for the year are estimated at $377,000,000, against $325,000,000 in 1924. The table below gives by months the 1925 exports of iron and steel products reported in tons, and similar figures for five previous years: Exports of Iron and Steel, Gross Tons 1920 1922 1923 1924 1925 Jan },601 160,920 123,190 247,942 140,802 Feb. 308,18! 133,975 133,902 164,820 101,665 Mar. 417,21 208,843 163,920 123,618 154,178 Apr L2vU 198,830 177,471 131,276 154,426 Ma > 230,062 203,389 154,13¢ 150,612 Ju o,(VG 12,29 171,183 163,770 136,847 J 8. 866 157,169 168 S 137,481 138,670 Aug : is4 145,640 161,426 134,628 188,963 oep 19,20U 129,475 172,499 135,979 136,754 Oct $52,01 132,924 152,511 157,071 141,817 Nov 1.297 122,2§ 0 127,782 186,956 123,577 171,134 Ly 198,7 +,41 150,170 177,844 eee) fae a we $961.8 22 042 1,988.08 9? 849 1.803.163 1.770.000 IMPORTS OF ROLLED STEEL MADE A GAIN For the 11 months ending with November we brought in 845,000 tons of iron and steel products, against 487,000 tons in the first 11 months of 1924. The pig iron increase over 1924 was more than 200,000 tons—388,000 tons against 181,000 tons. The total of finished and semi-finished steel brought in in the 11 months was 292,000 tons; in the same period in 1924 it was 201,000 tons. Cast iron pipe included in the “tubular products” item was 44,000 tons in 1925 to Nov. 30, and 46,000 tons in 1924. Thus the semi- finished and finished steel total for 1925 to Nov. 30 was 248,000 tons, and to the same date in 1924, 155,000. Here is a 93,000-ton increase in imported steel over 1924. Throughout the year there has been a steady filter- ing of foreign steel—largely French, German and Bel- gian—into Atlantic seaboard, Gulf and Pacific ports. Structural shapes were the largest item—73,495 tons to Nov. 30. Bars were next, at 52,307. Rails and splice bars were 36,600 tons. These foreign rolled products were generally sold at prices ranging from $8 to $12 a ton below those of domestic steel. All told, the past year’s imports of foreign steel were less than 1 per cent of the domestic steel production. 7 Unsatisfactory Earnings Despite a volume of business which might have been expected to lead to a fair return, profits of steel companies in 1925 left considerable to be desired. Earnings of the United States Steel Corporation for the first nine months of the year were practically the same as for the corresponding period in 1924, not- withstanding the increase in business done. However, with indications of increased tonnage and some stiffen- ing of prices, earnings for the fourth quarter should bring the year’s total above the level of the previous twelvemonth. Earnings for the last three years by quarters were as follows: Quarters 1925 1924 1923 PE kcscweces $39,882,992 $50,075,445 $34,780,069 Second . “+ 40,624,221 41,381,039 47,858,181 Third reueues 42,400,412 30,718,415 47,053,680 te ee ee eee. 30,762,231 49,958,980 The amount available for addition to surplus after payment of dividends in the first quarter of 1925 was $6,005,079; for the second quarter, $6,688,792, and for the third quarter, $8,604,611. Earnings of the Bethlehem Steel Corporation for the first three quarters of 1925 were approximately $4,000,000 in excess of the figure for the corresponding period in 1924—$28,445,606 against $24,445,774. Nearly January 7, 1926 half of this increase was made in the third quarter when earnings of $8,377,762 were $1,842,031 above those for the third quarter in 1924. The Republic Iron & Steel Co. earned approximately $1,000,000 more for the first nine months of 1925 than for the first three quarters of the preceding year: $4,628,857 against $3,566,291. Practically all of this increase may be traced to third quarter operations, when earnings totaled $1,555,755 as compared with $460,656 for the same period in 1924. Additions to surplus were almost $1,000,000 more for the first nine months of the last year than for the same months of 1924, In the first three quarters of 1925 the Inland Steel Co, earned $3,448,619 as compared with $4,599,748 in the first nine months of 1924. The falling off was in the early part of the year, however, and the upward trend of the company’s earnings is evidenced by a third quarter total of $1,189,235 as against $931,384 for the third quarter, 1924. The Youngstown Sheet & Tube Co. during the first nine months of 1925 earned $10,419,897 as compared with slightly more than $6,000,000 for the same months in 1924. The third quarter of last year showed up very well with a total of $3,299,436 as against the poor third quarter of the previous year, which amounted to but $472,899. A Trying Year in Pig Iron Pig iron production in 1925 exceeded that of any year since the war excepting 1923. Estimating De- cember output at somewhat more than 3,250,000 tons, the total for the year is roughly 36,750,000 tons. The record production of 1923 was 40,361,146 tons. The outstanding characteristic of last year’s market was the low level of prices. The year’s average, as shown by THE IRON AGE composite figure, was $20.58, which is 32c. less than the average in 1924, when production was 5,350,000 tons below the 1925 total. The average price of iron for the six years from 1919 to 1924 inclusive was $27.60, which is more than $7 a ton above the 1925 average. IMPORTS OVER 400,000 TONS The merchant furnace situation has been particu- larly acute on the Atlantic seaboard, where heavy importations of European and Indian iron in the past year have meant the loss of considerable business to American pig iron producers. The year’s imports were well in excess of 400,000 tons. Most of this came in at Atlantic ports, but on account of high rail freight rates did not penetrate far into the interior. It cannot be said, however, that importations were solely responsible for the low selling prices on pig iron. At Pittsburgh, Cleveland, Chicago and other in- terior points, where foreign iron is not a factor, the market was on low levels. One explanation is that buyers maintained an unruffled and at times skepti- cal attitude regarding prices. There was no hectic buying. Even the anthracite coal strike and the re- sultant demand and high prices for coke did not cause consumers to overreach themselves. There was ex- tensive covering of requirements during the autumn coke flurry, but the rise in prices in the last three months of the year was only $2.53 per ton over the September average, and some of this increase can be attributed to the normal enlargement of consump- tion in the fourth quarter. STEEL COMPANIES SOLD 1,500,000 TONS OF PIG IRON Another explanation for the low prices of the year is that steel companies were at times aggressive sellers of iron. The increase in by-product coke pro- duction, necessitating larger outlets for coke, kept active more iron-making capacity at steel plants than was at all times warranted by the demand for steel. Thus, as in recent years, a good deal of steel company pig iron found its way into the open market. The + Sp Tees January 7, 1926 total of iron thus sold by steel companies during the year was more than 1,500,000 tons. MERCHANT FURNACES HARD On Dec. 1 only 650 merchant furnaces were in blast out of 107 in the country. The total number of furnaces in operation on that date was 220, and of these 165 are owned by steel companies. Five fur- naces which were making ferroalloys are not included in this calculation. With high operating costs, low selling prices, for- eign competition and the selling of surplus iron by the steel companies, the merchant furnaces have had a situation to contend with that clearly points to a new regime in the production and sale of pig iron in the United States. This year will bring into operation in the East two new furnaces which have been built in conjunction with by-product coke plants. It is evident that the promise of profit for merchant blast furnaces here- PRESSED THE IRON AGE 5 an active market, but this did not compare with the buying wave in the soft coal strike of 1922, which carried prices to very high levels. Due to the anthra- cite coal strike, which started Sept. 1 and was on at the end of the year, coke for heating purposes sold up to $10 a ton, and this brought spot blast furnace coke up to $8.50. However, increase production soon brought a change, and by Dec. 1 spot blast furnace coke was down to $3.85, with first quarter contract coke at $4. Later, as an early settlement of the anthracite strike seemed unlikely, the coke market advanced. Sev- eral steel companies sold coke in October, because of the very good profit in the prices of that month. During most of the year the advantage was very much with the pig iron buyer. This first became pronounced when a reduction of 50c. a ton on Mesabi non-Bessemer ore was announced in April. The sub- siding of demand from foundries and other users of merchant iron became noticeable in March, and the excess of supply over demand was a controlling factor KY UCTUATIONS Over Eight Years in THE IRON AGE Com- posite Prices of Pig a Iron and of Finished Steel (Seven Leading CENTS PER LB. yu Products). While the two have moved ap- proximately in parallel lines during the past year, this is in sharp contrast with what happened in 1923 and 1924. Average levels in 1925 were, for pig iron, the lowest in ten years; for finished steel, the lowest save those of 1922 I918 1919 1920 after lies in more economical manufacturing, such as is possible when coke and chemical by-products are produced in conjunction with pig iron. PRICES DECLINED FOR FIVE MONTHS An advance in wages at merchant ovens in the Connellsville coke region added 75c. to $1 a ton to the cost of making iron at the beginning of 1925. How- ever, in April independent coke companies put wages back to the old level. Furnace operators had good backlogs on their books, carried over from the fourth quarter buying of 1924, but their efforts to advance prices of iron to cover increased fuel costs met with little success. The average price of pig iron in Janu- ary was $22.44, according to THE IRON AGE compos- ite, and this advanced to $22.50 for February, the highest point of the year. The decline was steady though small each month, until the low point of $18.96 was reached in July, the month of lowest output. The gain both in prices and production began with August and continued to the end of the year. Thus the price average for December was $21.54, or $2.58 above the low point of the year, but the December average was 96c. per ton below the February aver- age, the highest of the year. December pig iron out- put was considerably above that of November, but fell below that of January, March and April. COKE FLURRY IN OCTOBER The pig iron buying movement which accompanied the October coke flurry was the nearest approach to DOLLARS PER GROSS TON i921 1922 1923 1924 1925 from then until October. The last two months of the year found the active furnaces in the best position they had known in some time. On the October rise in demand they began selling beyond Jan. 1, and by mid-November many of them were well sold up for the first quarter of 1926. Foundry iron prices reached $22 at Birmingham, $23 at eastern Pennsylvania fur- naces, $23 at Chicago furnaces and $21 at Buffalo. Many of the first quarter sales were made at prices somewhat less than these, but on shipments in the early part of this year there will be a fair margin above the 1925 shipping average. Gains in Foundry Output The larger merchant pig iron consumption in 1925 than in 1924 was in part an index of the increased production of castings by iron foundries. All foundry operations have gained in the last few months. Steel foundries are now operating at about 60 per cent, gray iron foundries at 75 to 80 per cent and malleable iron foundries at 65 per cent. This compares with a 50 per cent operation for steel foundries at the beginning of 1925, €0 per cent for gray iron foundries and 50 per cent for malleable iron foundries. There has been a marked improvement among heavy-work foundries and those operated by agricultural machin- ery companies, which until mid-year were operating at a low rate. There is some shortage of skilled mold- ers and core makers, as not a few have dropped out of the trade because of lack of continuous employment during the past five years. OW much of various forms of fin- ished steel was made in 1925 and how much of each went into different major industries are told by the accom- panying illustrations and tables. Based on returns from steel companies making 27,812,000 gross tons of finished and semi- finished rolled steel and on an estimated output of steel ingots for the whole coun- try last year of 43,925,000 tons, the 1925 production of rolled steel, not including re- rolled material, was 32,500,000 tons. This amount is not merely 19 per cent more than in 1924 but is nearly 200,000 tons more than the record of 1923, when 32,- 321,000 tons were made. The ingot output, also a record, goes back to 1917, when pro- duction amounted to 43,619,000 tons; in that year, heavy cropping of war steel specifications probably accounted for the smaller percentage yield in rolled products. The full returns show that 85% per cent of the total production was repre- sented in the figures covering the output of the several forms of steel—rails, shapes, wire products, sheets and the like. And the fact emphasizes at the end of another year the cooperation of the producers in the necessarily heavy task of compiling in detail from a mass of records. Further, as was done at the last few year-ends, figures were requested as to the distribution or consumption of the steel by various major industries. These were sup- plied by companies making 21,342,000 tons, or 65% per cent of the total. This year, it was decided also to try to get a line on the consumption of what may be termed the first rank of buyers, that is, the amounts of steel taken by various classes of direct customers of the steel maker. A third of those reporting the sales distribution gave such figures. These companies made 7,- 360,000 tons, or 22.6 per cent of the total. It is believed that consumption figures will have added value, at least for sales man- agers and others in shaping policies, if given in terms of direct customers as well as for the broad channels of consumption. In total production 1925 is a record by it! (nt Record Production in Rolled Steel—'4 Per Cent More Than in 1923—Chief Increases in Steel Bars, Shapes, Sheets and Tin Plate TF It Went in Nineteen Twenty-five A table of the tonnages by kind and distribution is given on page 10. Steel bar output on the face of the re- turns, including concrete bars rolled from billets, appears very large, or one-third more than in 1923. Similarly a record is shown in structural shapes, nearly one- ninth more than in 1923, and in tin plate almost as great an increase. Sheet produc- tion of 1925 exceeds that of 1923 by 2 per cent. The output of plates and pipe fell off as compared with the large production two years ago but of course exceeded that of 1924. Rail manufacture of 2,595,000 tons in the heavy sections was 370,000 tons ahead of the previous year and only 25,000 tons behind 1924. Bars, plates and shapes —the heavy tonnage products, so called accounted for 42% per cent of the total. Railroads easily took most of 1925’s steel. Although the percentage of the total dropped from 28 to 25, in contrasting the last two years, the total production of the country was so great that the 25 per cent in 1925 meant 500,000 tons greater absorp- tion by the railroads than in 1924. To building and general construction work went 5,622,000 tons last year, against about 5,000,000 tons in the year preceding. The automotive industry took the impressive total of 4,228,000 tons. The diagrams on these pages are pro- portioned to show the relative volumes taken by the industries, and the percent- ages of the different chief forms of rolled steel. They are intended to show at a glance the relationship among these di- Besides the major drawings, there is a chart on page 8 showing by industries the kinds of steel taken by each and the relative im portance of these kinds of steel to the industry, and on page 9 a chart showing how much of each steel product is sent to the different industries. In with each of these charts is a table show ing the percentages in detail. For exam ple, the table on page 8 shows for the automobile industry what percentage of 1% per cent excess over 1923. visions for the past four years. connection CDOAAASAAAAALLUAGLA LAE TaeOAa Aa Again About Two-Thirds of the Steel Was Absorbed by Railroads, Construction Work, Auto- mobiles and Oil and Mining Developments Io . RN SSD SE MACHINERY Bateasscg: > 3 % eae FOOD CONTAINERS SS b ° fo 2 34% FS 8 THE IRON AGE January 7, 1926 GunaeseonecrernereneneeTeveeryerseeENeRONEROrneEEEcHuneesTEDLEREOUNERORTOFSRENROORDOTDOREEDOLUNEEDRODERABEDEDDEASEDEASE LEGER I iSEDHOEOEY ov) Hn;RNTERE DEEL br senees NRT OnERSRNONRORRONROSLESORNONDT -eengeeaneCesOnONE Os sesensensssennnanongnerensonoNRees: AOPONUDnONAeD Hn eeMRRDEDenBonenNONCENN GDOLNINNOLLISTINIIILLI INV ORBEA OO NOEDERDELSEDDAOGELTONSEDOADENNEDONNCNOOOEDEOG LONeREROSeSERENOSERS RS Forms of Steel Different Industries Took in 1925, Showing Percentages Making Up the Total for Each Industry Track Ac- Rails cessories Plates Shapes \utomotive (inc. trucks, etc.) : ing 7 Railroads (inc. cars and loco- DE? cceaehssunevens &® 29.5 8 19 ee - 1 6.5 Buildings, bridges and other constructior not railroad) 11 Se ns nek cena s s o0% a 1 39 Food containers .........++. - =" 1 Machinery (elec., textile, ma chine tools, etc.) ..cccccecs ‘e sta 10 DS. mae OME WOIer .<.accsex 5 1 24 Exports .. ne be ae eh tree ‘=e 9.5 1.5 10 Miscellaneous . athe ei ‘ 4 6.5 iy S iS Consumption 3 by IS Important | Industries. s Xe Bs is Example |e Of Railroad &% Purchases uy ; © 11 Per Cent = Were IS & Bars, = 8 19 Per Cent S & Plates, ” S . $s Ete. ~ S e S Q Werloms/ Plates /9 95 Shapes 40 | Bars/7 | Pipel2_| Plates 49 ™s 23) r; / ‘Hh shee’ 27 PR SS = S SF vy SE Is S] |g N SA lug ~ of} Im} lat lod he 2} IS] (st (e] gy RB % ~F is oO] Let jza [S} Is Ti ff led ol~ Rl yf ay IS {s am ik £ $ RAILROAD + BUILDING-AUTOMOTIVE* OrL.GAS EXPORT = FOOD - MACHINERY AND WATER CONTAINERS 1 10 4.5 oof oO on Pipes Hoops, Blooms Tin Wire and Bands, and All Bars Sheets Plate Products Tubes etc. Billets Other 49 27 5 7 2 2 11 6 és 3 2 5 6.5 26 9.5 o% 41 1 4 4 1.5 17 8.5 7.5 12 1 ‘ 2 11.5 4 3 3 6.5 8.5 oe ».o 84 3 ee 5.5 ° oe 51 7 ois 5 ia 10 3 4.5 4 2.5 2 3 53 1 1 i 10 13.5 14 9.5 17 1.5 es 3 18 20 3 25.5 11.5 2.5 2.5 2 avENNOD DONTE TOUDNOANEDOOUERROOIAORSUEDOOREOERDEOHDONERROD YON ONY irrrovirresouuoOreOeDBENenHLANONEN OUD serene the steel required for automobile manufacture was supplied in the form of bars or in sheets. Similarly, the table on page 9 shows how much of the total pro- duction of wire products, for example, was taken by the building industry or by the railroads or was ex- ported. On page 10 is a table which shows in units of 1000 gross tons the distribution of steel for 1925. From this one may gather what tonnage of rails was taken by the railroads or what tonnage of structural shapes was used by the building industry or what amount of plates was required for the making of tanks in oil de velopments. Estimated totals give the entire consump- tion for the different industries and for the entire production of the different forms of steel. As was the case in 1923 and 1924, nearly two-thirds of all steel was absorbed by the combined demands of railroads, building and construction work, automobiles and what may be classed as oil and mining develop- ments. The steel exported was 5 per cent but represented about as much as the 6 per cent of the preceding year. The innovation in the analysis for the past year is the distribution given by companies making 7,360,000 tons of rolled steel. A diagram appears on page 10 to show this. From the circle representing the country’s output lines radiate to smaller circles representing proportionately to their takings the purchases of the customers of the companies. From these in turn radi- ate lines to indicate the further distribution, manu- facture or transformation to the major industries or channels of consumption. The aggregate area of the inner ring of circles is of course equal to that of the central ring, save for the circle denoting the volume of exports, and likewise there is equivalence in area in the aggregate of the outer grouping of circles. Automobile makers, railroads, building contractors and fabricators and jobbers rank high as buyers. The total tonnage shipped to jobbers was 9% per cent. What the jobbers purchased was subsequently allocated on the basis of information received from jobbers to the major industries covered in this study. Next in size among the steel buyers were the oil and mining companies, makers of machinery, boiler and tank manufacturers, can makers and makers of forgings. Based on questionnaires to boiler makers and forging companies, the tonnages distributed to these first line of consumers were allotted then to the final group of consumers. Finally in the order of their importance were stove and metal furniture makers, electrical manufacturers, bolt, nut and rivet makers, concrete bar companies, shipbuilders and agricultural implement manufacturers. The returns indicated that the miscellaneous class of customers included manu- facturing consumers specializing in wire goods and in stamping and forming sheets. January 7, 1926 Gena enna snanensnensesninnnnninenensrennnnenerensenreceseoecesvonessnensentn THE IRON AGE What Percentage of Each Form of Steel Was Distributed in 1925 Among the Industries Oil, Gas, Buildings Food and Water Auto- Rail- Agricul and Ship- Other Ma- and Miscel- motive roads ture Const’n building Containers chinery Mining Exports laneous Se ae ree a 82 =v 4.5 > 8 Tie plates, etc...... 1 $3.5 2 1 3 5 ) PO cece eaecekc 7 , 6 3 16 4 10 ee ee 1.5 21 9.5 2 2.5 2.5 4 6 RR Se eae 33 14 l 9.5 1.5 3 17.5 EE <c-ivsis ema ek euea 29 12 12 2 2 2 6 31.5 Ny ON oe ecw 70 3.5 14.5 12 Wire products ai 7 7 14 3 ] 2 2 5 48 Pipes and tubes.... 1 5 21 42 & 21.5 Hoops, bands, etc... 34.5 3 x ) 14.5 3 . 19 Forging billets and ee ae 85 51 6 2 £.5 4.5 18.! ye eee 7.5 2 5.5 1 5 11 Of the large consuming industries more is said on other pages, including details of the takings of the railroads. On page 104 is a statement of the consump- tion of the automobile trade, and immediately following is an account of the demands for building work. Building in 1925 Breaks Records ii UILDING construction in 1925 broke all records and | a . . . ‘2 . > this total is of unusual significance to the steel in- the Q dustry in that there was a large gain in commercial Different \ buildings and structures of other types requiring the : a use of fabricated steel. Even in residential construc- Forms a tion the greatest gain was in apartment houses with of > steel framework. 7 x Figures compiled by the F. W. Dodge Corporation, Steel New York, covering 36 States, other States being esti- Were mated, showed a total for the 11 months ended with 5 November of $5,310,950,000, to which is added an esti- Distributed 8 mate for December of $480,000,000—a total of $5,790,- in 950,000 for 36 States. The total of the remaining Ly States will, it is believed, bring the grand total close 1925 |S3 to $6,500,000,000. Estimated totals for the entire coun = try beginning with 1913 are given as follows: SS ee $1,189,700,000 BORO s eae sence $3,337,600,000 $ a ok a a 1,005,400,000 BEE h sone ; 3.068,900,000 —- t<c<baaan a 1,269,160,000 SU cs 6 ac 4.329.700,000 U.S 1,834,000,000 aoe. 5 1.768,.100,000 " . iy 1917 2,195,000,000 1924.. 27 100.000 * SNS korn bce. 2,294,200,000 1925 6.500.000.0008 2) x POR s.c nec oe 3,142,500,000 ~ d S : *] mber timated # a os S rece or estimse , - ° S yp x IA Bea 3 , => P & ~ Gain in Floor Space As Well As Values ~ +S Ae | a“ ~ : \ 8 A better basis for a comparison of the growth in a is o ~ — building construction over a period of years lies in the | 2 \ ~~ xs x w®» ; . 1s 1 > Qj * 3 figures on floor space as the dollar values have varied =. is 9 2 of course in part because of varying costs of construc- iS ley S S — ) 5 7 ; . + : = = A =) tion and materials. The square footage of floor space Bes es a RS ™" £ S erected in 27 States from 1919 to 1925, inclusive, is bs ‘a | is Y 3S figured by the F. W. Dodge Corporation as follows: 1S iy hs & 3 1919 $559,218,600 1923.. $598,621,000 | is ae & ) 1920 412,397,000 1924.. | S _ Rs Raa ss 389,418,200 1925 0° | | | © 1929 581,136,400 i= Qj —— ; | i Lf December estimated. | © IS ; s ' aa = Growth of Commercial and Residential Buildings IS 1 ia | > ™ . 1 oN | | In 11 months of 1925 the total square footage of | Oy = SS ) re floor space in commercial buildings, for which con- | key 19> tracts were awarded, was 137,673,400, as compared with Bs Pe vi bag Y 103,473,400 sq. ft. in buildings of the same type con- 8 : . d o) + tracted for in the same period in 1924. The value of }< Ry le ‘S ry 8 these buildings was $555,072,400 in 1924 and $767,903,- “2 IS S d > S ° ar ° . . a ¢ 7 LA} > = rae CQ £ 800 in 1925. Another class of buildings in which there oe 5 | i> ® 8 - was a large increase is residences, many of which were SQ ie 1 = e x of the large apartment house type. Residential build- & = S rs ings contracted for in 11 months of 1925 totaled 492,- p iS s & . = a 208,800 sq. ft. of floor space as compared with Su, 1S s 388,790,100 sq. ft in the same period of 1924. Resi- ety |S = dential buildings contracted for in 11 months of 1925 > had a total value of $2,421,774,000 as compared with RAILS: WIRE- PIPE - SMAPES “SHEETS: PLATES- BARS $1,885,736,200 in the corresponding period of 1924. PRODUCTS 10 Z ina Prack Acceé ia Ss Structur Bars Hoops, Ba Y P|] té Sheets ' I e and ‘I THE IRON AGE representing the country’s consumption, lines . + . + ] o | °c ire customers ot tne steel makers. indicate the furthe or naustrie or cnanne s of consumption. ESTIMATED CONSUMPTION OF STEEL IN 1925 fG S ] ls) \pp te Amou Each Form Taken by Each of a Number of Industries ‘> | Water Metal Machin- Ship- d ‘ Aut Gas and Con- inery Build- ' st tic tu obil Mining tainers Makers ing 401 15 3 6 112 “ 6 ] 2 Seue 6 5 { 60 7 270 63 10 116 127 SUC . i E 6 ' 9 72 r yg 9 17 g 599 37 27 t 4 289 0 74 120 “ } 1,170 1 172 \ 8 4( 0 79 &0 15 169 68 14 2 $20 5 7 9 227 41: 467 22( 65 42 59 10 411 ‘ 48 70 5 8 34 21 9< 0 18 y 8 52 28 157 f f 4,229 2,665 1,396 1,171 326 January 7, 1926 ROM the rele radiate ee r circles representing proportionately to their takings the purchases of di From these in turn radiate lines to distribution, manufacture or transformation to the final Export to Miscel- laneous 9c “wv 212 38 388 220 1,081 161 97 ar i, tJIto- 1,; oO © tT CO 15 — 6 100 An “Iron Age’ Interview with if] The East as a Great Producer and Consumer of Steel. Chilean Ore at Six Cents a Unit at Sparrows Point. Steel Companies, Making Enormous Outlays to Reduce Cost, Should Get Better Return. Expansion to Be Looked for in Every Line Mr. Schwab HAIRMAN CHARLES M. SCHWAB of the Bethlehem Steel Corporation made an ar- resting statement on his last visit to the Sparrows Point, Md., plant—a notable inspection trip on which he and President Grace were accompanied by corporation and by representa- tives of large stockholding and bondholding interests: “My hope is that eventually we shall have at Sparrows Point the greatest steel plant in the world.” Mr. Schwab’s position as a prophet of greater things for the American steel trade is well known. The prediction he made to J. Pierpont Morgan 25 years ago when the United States Steel Corporation was in the making has been often recalled. Previous to 1901 the country’s greatest output of ingots and castings (in 1899) had been only about half a million tons be- yond the 10,000,000-ton mark. Mr. Schwab told Mr. Morgan that within a few years the industry would double its record by producing 20,000,000 tons in a twelve-month. In 1905, four years after the Steel Corporation was formed, the prediction came true, and there was 23,947 tons above twenty millions, for good measure. Later Mr. Schwab, in the face of much skepticism, set up a 30,000,000-ton bogie for 1920, and was called an incurable optimist. The steel in- dustry clipped eight years from his time limit, and made 31,251,000 tons in 1912. And in 1925, only five years after the one Mr. Schwab picked for a 30,000,000- ton performance, the country got more than half way on the road to 60 millions, turning out roundly 4614 million tons of ingots and steel castings. While his Sparrows Point expression was a hope rather than a prediction, THE IRON AGE asked Mr. Schwab if he would not comment upon it and upon his manifest faith in the East as a section of large pos- sibilities both in production and consump- tion of steel. “That might seem like blowing my own horn,” was the reply. “However, I am glad to comply with a re- quest of THE IRON AGE, of which I have been for so many years an appreciative reader. The East’s Advantage on Ore “Eastern steel plant development is in response to the growing demand for steel from the great consum- ing districts of the country. Some of my friends in the industry in the Central West have now and then raised a question as to my partiality for Eastern loca- tions for steel making, seeing that I was for so long identified with the Pittsburgh district. I have always other officers and directors of the 11 of Steel Consumption—Replacement a Large Factor believed in the possibilities of the Eastern section of the United States as a user of steel. “If you look at the question from the standpoint of raw material costs, a study of the iron ore situa- tion would be a deciding factor. Looking toward Lake Superior, I saw costs steadily advancing and the quality of the ore steadily declining. In the old days I could get ore properties there at royalties ranging from 10 to 25 cents; today these royalties have gone to $1.25 and $1.50. several fold, and there have been successive advances On the other hand are the low mining costs in Chile, which have been stable over a long period, and substantially that is the case in Cuba, Our Chilean ore runs 67 per cent in iron, whereas Lake ores that once averaged about 60 per cent in iron are Taxes on Lake ores have increased in labor cost. now down between 50 and 55 per cent. “Chilean ore hauled 4400 miles can be laid down at Sparrows Point at $6 for the ore required to make a ton of pig iron, or about 6c. per unit. While Pitts- burgh has its advantage on fuel, the ore advantage of the Eastern seaboard plant is such that pig iron can be made more cheaply at Sparrows Point than at any point in the Middle West. “The marked advance in rail transportation cost is another factor in the greater future of the Eastern steel industry. When I started making steel at Pitts- burgh we had a $2 freight on finished steel to the Atlantic seaboard. Today the rate is $7 a ton. That is a great difference. And there is no reason to be- lieve that rail freights will tend lower in the future The higher cost of railroad operation is here to stay A Great Steel Market in the East “If you speak of markets east of the Alleghenies, think of the scale of railroad operations in this most densely populated section of the country, and of the large track and car and locomotive requirements. The number of metal-working plants in the East and the number and range of their products are well known Almost the entire output of our wire mills at Spar- rows Point is taken up by spring works and other in- dustrial users of wire in New England and the Middle Atlantic seaboard. Speaking of structural steel, where has there been such a use of it as we have seen in New York City and other points on the Atlantic sea- board in this present wave of new construction? And the East will continue to lead in construction, for there is no end to the rebuilding such as we see so strikingly in New York. Here the steel construction of the next ten years will far exceed what are called high records today.” “Are there any signs, Mr. Schwab, that the steel industry is losing any of its enor- mous appetite for capital? Rebuilding and (Concluded on page 95) achine Tool Progress in 19 A Year of Marked Improvement in Product and of Ex- panding Sales, but Profits Were Not Adequate— Greater Domestic and European Demand Ahead BY COL. FRANK A. SCOTT* T the beginning of 1925 the dawn of better busi- ness in the metal-working industries was break- ing. However, the sunlight of prosperity is still obscured somewhat by the clouds of a low-price situa- tion which are but slowly being dispelled. During each recurring period of recession in the machine tool business there have not been wanting those doubting friends who feared for its future. In this respect the last one was no exception. The results of 1925 and the prospects for 1926 have laid those doubts at rest. Prosperity in the machine tool industry is here, or at least the demand for the product is here, and prosperity is assured whenever the price factor is adjusted to present costs. The over-expansion of the war period and the aution engendered by depression a