The Iron Age 1928-01-05: Vol 121 Iss 1

THE IRON AGE New York, January 1928 ESTABLISHED 1855 VOL. 120, No. = — Steel Trade Now Looks 1928 Compensate for Some the Recession 1927— Forces That May Make for Greater Market Stability Nineteen twenty-seven the steel industry showed early signs falling behind 1926. steel ingot output about 43,250,000 tons, was per cent under the 46,936,000-ton peak the year before. Prices declined most the year, and earnings were quite below those for 1926, spite the signs year ago that steel companies were about curb price cutting. AGE composite price for finished steel averaged 2.357c. per for the year; was 2.439c. 1926. Thus the year’s average fell off $1.64 net ton, whereas the 1926 average was only 52c. ton under that 1925. the sheet and strip trades the revolution continuous rolling pat- ented methods made the year memorable, pointing ultimate centering production large companies. Pig iron last year sold lower than any time since August, 1916. Our pig iron composite, the year opened, was $19.71 per ton, and the year’s end $17.54. Pig iron output was about 36,400,000 tons; 1926 was 000 tons. With outlay for new iron and steel plant much curtailed and with produc- tion fewer hands, the trend toward more stable market. ORE factors the steel trade outlook for 1928 are difficult estimate than was the case the beginning 1927, 1926 1925. Yet there are good reasons for the expectation that will year large activity and, barring un- toward developments which present tendencies give sign, conforming the main com- posite the three years last past. Wide fluctua- tions from year year are longer likely. Count- ing 58,000,000 tons ingots theoretical capacity, 1926 was per cent year and 1927 74.5 per cent year. One year ago was said THE IRON forecast that the expectations the steel trade entered 1927 were not high pitched the beginning 1926, but that almost without excep- tion there was the added opinion that important recession was likely the twelve-month. was felt that since 1926 had outrun the high record 1925, making two successive peak years, would breaking all precedents (apart from the war-time triennium 1915, 1916 and 1917) have new top 1927. Also there was warrant for the view that 1926 had brought some over-expansion trade for which compensating toll might taken from 1927. The automobile industry was particularly mind this connection, but the recession there proved more than was looked for, due largely the protracted suspension production Henry Ford. Possible Compensations 1928 Today, following the reasoning year ago, there ground for the view that, 1927 showed recession from the very high peak 1926, some | } G | | | 4 { | | 4 3 j lines steel consumption may expected compen- sate 1928 for what they lacked the year just ended. Automobile and railroad demand, alike disap- pointing 1927, are both counted for increases, and the improvement agricultural machinery plants had promises further. Steel construction heavy lines need not expected exceed, and may not equal, the large scale 1927. The pipe trade looks forward another year substantially like 1927 fall- ing short the peak consumption 1926. Greater Market Stability the Making? Reading consecutively the year-end the weekly market reviews THE IRON AGE for 1927 one sees that was year which steel prices and consumption was constantly expected but not re- alized. Yet several things have been the making, even these past nine months recession, that may out the side price betterment 1928. First, the series efforts producers have made get various finished products out the low-price cuts. While the extent their success largely for the future determine, these efforts have kept con- stantly before both sellers and buyers the aim the manufacturers get prices yielding fair profit and have tended lessen the strain for tonnages the prices. CONSOLIDATION TENDENCY MORE PRONOUNCED the second place, progress has been made the direction consolidation the past year, reducing that extent the scramble for profitless tonnage. Fol- lowing the merger July, 1926, the Central Steel Co., Massillon, Ohio, and the United Alloy Steel Cor- poration, Canton, Ohio, with combined ingot capac- ity 1,150,000 tons year and assets $80,000,000, there were persistent reports further concentra- tion steel capacity northern Ohio. The Otis, Cor- rigan-McKinney and Trumbull companies were com- monly mentioned connection with these plans. The expected amalgamation did not come, however, but November the Republic Iron Steel Co. acquired the Trumbull Steel Co., bringing the ingot capacity the former 1,900,000 tons year. July the American Rolling Mill Co. purchased che properties, business and patents the Columbia Co., Butler, Pa., the combined capacity the two companies being 1,000,000 tons sheets and strip- sheets year. Negotiations have been under way for some time which are expected bring about the early merger the Columbia Steel Corporation and the Pacific Coast Steel Co., both San Francisco, and having gross assets above $35,000,000. the last day the year announcement was nade that the Youngstown Sheet Tube Co. would acquire the Inland Steel Co., the strong Chicago dis- ‘rict independent, which Eastern interests had nore than once sought acquire with its ingot capac- more than 1,500,000 tons. Then northern merger six sheet and tin-plate producers was December and the Empire Steel Cor- was formed—a move that should aid the save the sheet industry from disastrous price LITTLE NEW CAPACITY BUILDING third factor making for more stability the industry the limited scale the additions made last year, planned for this year, the country’s steel-making capacity. the four years after ac- the Midvale and Lackawanna companies the Bethlehem Steel Corporation spent $80,000,000 new construction and improvements increase output. The Steel Corporation appropriations 1924, 1925 and 1926 were $75,000,000 for the building new capac- ity. The past year has shown sharp falling off 1928, The Iron Age new construction; the coming year relatively little will done. Excess capacity will less evi- dence and demand will grow into healthier relation supply. fourth constructive development the year was the beginning continuous sheet manufacture large scale. While, its face, continuous sheet and strip rolling suggests destructive competition and the eventual elimination smaller mills, there are indi- cations that the patent situation will handled the granting licenses that the continuous mill may tend rather the stabilizing the very im- portant market for the thinner products. Unbalanced Steel Demand Last Year The forecast some leading members the steel trade that demand 1927 would run something like per cent less than 1926 turned out fairly accurate. Ingot production, indicated the pre- ceding page, was about per cent below that 1926. When consider the lack railroad equipment buy- ing, the slump automobile production, the depres- sion the oil fields, the bituminous coal strike, the Mississippi flood, and the widespread handicap un- seasonable weather, the 1927 performance the steel industry was remarkable. With the railroad, auto- mobile and oil demands unsatisfactory all were last year evident that the miscellaneous and un- classified industries furnished nearly much business 1926. New uses steel are adding each year’s demand. Steel furniture, steel sanitary equipment, steel sash and frame dwellings are examples. The steel re- quirements for craft the Monongahela, Ohio and Mississippi Rivers are increasing. Perhaps 70,000 tons was taken 1927. The work the Sheet Steel Trade Extension Committee doubt prevented con- siderable falling off sheet consumption. The revolu- tion farm equipment brought increased use from that quarter last year and this promises SMALLEST STEEL REQUIREMENTS FOR NEW CARS SINCE 1921 Capital expenditures the railroads were only $750,000,000 1927, more than per cent below those 1926, and the decrease was reflected nearly all steel purchases except rails. The number freight cars ordered for domestic steam railroad use was 71,- 606, including those authorized for construction railroad companies’ own shops. While this was slight gain over the 67,000 bought 1926, fell consider- ably below 78,000 ordered 1925 and 135,000 1924. closer gage the decline actual steel con- sumption for freight cars last year afforded the total 63,390 cars built and delivered car build- ers and railroad car shops, 1927 being the least ac- tive year this respect since 1921. the preced- ing year 79,000 were built, while 94,000 was the total for 1925 and 104,000 for 1924. Only 808 locomotives were ordered during the year, including export orders, and 1176 were built. those ordered 696 were for domestic use, against 1301 1926, while 958 were built for domestic use compared with 1585 1926. Railroads built 779 miles new main line, but tore 202 miles, leaving net gain trackage 577 miles. FABRICATORS’ ORDERS MORE BUT SHIPMENTS LESS high rate building construction reflected the figures collected the Department Com- merce 1927 contracts for fabricated structural steel. Computed bookings, based returns from large per- centage the fabricators, showed total 2,521,740 tons for months and, with December estimated, the f | year will show approximately 2,725,000 tons, gain little less than per cent, compared with 2,523,- 250 tons 1926 and 2,425,612 tons 1925. Ship- ments last year ran more than 200,000 tons below those 1926; that year shipments exceeded orders. Elsewhere the automobile, railroad, new construc- tion and oil well and pipe line consumption steel 1927 referred to, each field having separate article. The estimate motor cars and trucks built the United States last year 3,350,000, against 4,255,000 1926. Output Curve Had Autumn Upturn page the course steel production last year shown curve which contrast with those /NGOTS THOUSAND GROSS TONS PER WORKING DAY April union miners the bituminous coal fields struck enforce their demand for the main- tenance the so-called Jacksonville scale and the strike lasted through the year except for tentative adjustment the Illinois district. Stocks coal had been accumulated before the strike and non-union mines increased their operations such extent that there was plentiful supply coal throughout the year. Iron and steel production were nowise affected the strike and time did the market for coal and coke show strength. Last year has the distinction the largest ingot output ever made month—4,499,092 tons March. The scarcely interrupted decline the daily rate steel ingot production that began April shown Fluctuations Daily Average Production Steel Ingots and Pig Iron, During the Past Ten Years. While generally parallel, the curves are farther apart than formerly, much far- ther than 1921, for instance. They are based monthly ingot figures the American and Steel Institute and monthly pig iron figures gathered THE IRON AGE. Ingots have fallen far below the high record 1926 but the year was above the 1923-1926 average. Pig iron per cent below the average those four years the previous three years. All advance the early months the year March peak, then decline spring and summer, ascending again the autumn. The 1927 curve, however, did not turn last fall and that particular, others, paralleled the move- ment 1923. Indications now point continua- tion the parallel, which would give the next three months some such increase operations was seen the first quarter 1924, and was repeated each the three following years. The year’s steel ingot output IRON AGE esti- mates 43,250,000 gross tons and that steel cast- ings 1,250,000 tons (against 1,300,000 tons 1926), making the 1927 total ingots and steel castings about 44,500,000 tons, which compares with 48,294,000 tons 1926. March Record Month Steel Outputs steel ingots and pig iron are given be- low for 1927 and the preceding years, including the last two years the war period: Steel Ingots Pig Iron, Steel Ingots, and Castings, Gross Tons Gross Tons Gross Tons 38,621,216 43,619,200 45,060,607 39,054,644 43,051,022 44,462,432 31,015,364 33,694,795 34,671,232 36,925,987 40,881,392 42,132,934 16,688,126 19,224,084 19,783,797 27,219,904 34,568,418 35,602,926 40,361,146 43,485,665 44,943,696 31,405,790 36,811,157 37,931,939 36,700,566 45,393,524 39,372,729 46,936,205 48,293,763 36,400,000 43,250,000 44,500,000 below the statistics the American Iron and Steel Institute: Daily Daily Months, Production, Months, Production, 1927 Gross Tons 1927 Gross Tons January ........ 144,611 127,134 166,633 September ...... 124,312 157,430 November ...... 119,299 Hard Year for Pig Iron Producers pig iron production, 1927 ranks eighth among the high years, having been exceeded 1916 and every year the succeeding decade except 1919, 1921, 1922 and 1924. estimate the year’s production (including charcoal iron, which not included the monthly statistics) 36,400,000 tons. This compares with 39,372,729 tons The table below gives the number and capacity furnaces blast the beginning each month. The largest number was 223 April with daily pacity 113,435 tons, and the smallest, 170, Dec. with daily capacity 87,700 tons: Number Capacity Capacity 1927 Blast Gross Tons 1927 Blast Gross Tons March 217 106,135 Sept. 1.... 187 June 211 107,445 170 87,700 Pig iron production about 36,400,000 tons (Decem- ber estimated) 1927 (including charcoal iron, ferro- The Iron Age, January 1928—3 1 | | } manganese and spiegeleisen) was the smallest since 1924 and was exceeded seven preceding years—1916, 1917, 1918, 1920, 1923, 1925 and 1926. Last year’s out- put fell almost per cent below the peak 40,361,146 tons 1923. Jan. 1927, there were 204 furnaces blast, while Dec. the number had declined 170. Shut- ting down came rather rapidly the last half the year, reflecting not only the diminishing demand for steel, but smaller consumption iron and steel foun- dries. MORE FURNACES ABANDONED The year brought further scrapping obsolete furnace capacity, resulting net loss stacks. THE IRON AGE list Jan. 1927, showed 371 units against 357 now. the 357 existing furnaces, 122 may definitely rated the merchant class. Only the 122 were blast Dec. and many those which were not then blast had been idle for the entire year, and doubtless many will the scrap heap before the end 1928. Very little new capacity being built planned, that the end this year will see further decline the country’s potential pig iron capacity. Each year sees the end the merchant furnace drawing near, and the time coming when practically all the iron made for sale will furnished the steel companies. The expansion by-product coke oven capacity has made necessary for the steel com- panies keep blast furnaces going use the coke, and has been cheaper for these companies keep making coke and iron, sometimes far excess their own requirements, especially the large, mod- ern furnaces which are capable making 800 900 tons daily over long-extended periods. PRICES LOWEST SINCE 1916 Pig iron prices showed the lowest year’s average since 1916, THE IRON AGE composite price for 1927 averaging $18.55 against $20.42 1926, $20.58 1925 and $20.90 1924. Several months 1916 had aver- ages below $18. The 1927 composite was more than per ton below the composite average the eight years, 1919 1926, inclusive. significant development the year was the growth water shipments, together with the inva- sion new territories some furnace interests which would have been wholly disadvantage when ship- ping rail. The Chicago district was invaded sev- eral occasions iron from Lake Erie ports. Large shipments from Buffalo were also made the Detroit district. EASTERN WATER SHIPMENTS During the navigation season, shipments Buffalo iron New York State barge canal New York, New Jersey and Connecticut points were more frequent than preceding years, Buffalo producers reached out for more territory offset their loss business New England due the extreme competition Ever- ett, Mass., Troy and Port Henry, Y., furnaces for that market. The Mystic furnace Everett shipped tens thousands tons barge cast iron pipe foundries the Delaware River above Philadelphia. thus competing actively with eastern Pennsylvania furnaces. Lake Erie furnaces, which for most the year were making more iron than could absorbed their natural territories, reached out points where they were freight rate disadvantage, and the Cin- cinnati district they undersold southern Ohio furnaces. Southern iren, which was held fairly high prices most the year, lost some its northern markets, but Jate the year, when the Alabama producers re- duced their quotations the lowest point, with one exception, since October, 1916, they widened their mar- 4—January 1928, The Iron Age kets somewhat the territory contiguous the Ohio River. They did not regain the opportunity, however, ship iron sizable quantities points north Cincinnati and St. Louis. CHANGES OWNERSHIP Among the changes the past year was the acqui- sition the Rogers-Brown furnaces Buffalo the Hanna Co., Cleveland. major trans- action was the purchase the Hamilton furnace Hamilton, Ohio, the Koppers Co. and the American Rolling Mill Co. This furnace will supply hot metal for the latter company’s steel plant Middletown, Ohio, soon connecting railroad can built. Interests affiliated with the American Rolling Mill Co. also bought the Norton furnace, long factor the merchant iron market southern Ohio, and when mod- ernized will supply hot metal the American ing Mill Co.’s Ashland, Ohio, plant. The two furnaces this company Columbus, Ohio, will not needed for production steel-making iron, but their future has not been determined. MUCH LESS FOREIGN IRON Foreign iron was less factor the domestic market than any the five preceding years. Last year’s receipts did not exceed 140,000 tons (last month estimated), while those other recent years were follows: Tons Tons (11 months) Low prices here and comparatively high prices abroad left little margin profit that American brokers were unwilling buy speculatively. slight deterrent was the advance per cent the tariff, from cents per ton $1.12%, under the flexible pro- visions the tariff act, and further retarding factor was the application the anti-dumping duty Ger- man pig iron after investigation the Treasury Department. Scrap Had Small Fluctuations Low cost making pig iron principal steel pro- ducing districts has served keep down prices heavy steel scrap, but other factors have also been work, such reduced consumption and the increased efficiency the railroads, not only gathering their own scrap but transportation from all shipping points. The speculative profits past years for han- dlers scrap have been lacking, prices all grades have moved over very narrow range. THE IRON AGE composite price heavy melting steel for 1927, taking Pittsburgh, Chicago and Philadelphia markets the bases, was $14, compared with $15.48 1928 and with eight-year average $17.35. Efforts Steady Prices Prices had good deal attention throughout the year, nearly every product apart from rails having consideration the effort producers stabilize the market. Strip makers announced advance Feb- ruary, but previously gave buyers full coverage for the second quarter the low prices reached just after the turn the year, and took until well into the third quarter complete the shipments these protections. sheets effort was made limit the coverage given before advance announced the latter part May. Buyers were given until June specify the low prices, but many cases the period was ex- tended. The outcome was that great amount the announced advance was realized upon. Nov. the Carnegie Steel Co. advanced plates, shapes and bars ton, 1.80c., Pittsburgh, but - there was very general coverage well into the first quar- ter the 1.75c. price. tin plate reduction from $5.50 $5.25 box was made December the contract price which had nominally prevailed for three years. The new price was really advance over some prices that had com- monly been made, and was announced that would not subject concessions the extent that had long been practiced. Wire prices were the subject effort raise the market, but the end the year producers had lost the ground that appeared have been gained. Generally speaking, was year price weakness, and the average THE IRON quotations seven leading finished steel products was $1.64 per net ton below that 1926. Pig iron prices, appears from the pig iron review preceding page, were the lowest since 1916. Exports Increase While Imports Decrease Following the gain made exports 1926, there CENTS PER LB. showed drop 336,000 tons. Pig iron was per cent the 1926 total, and only per cent 1927. Increases imports rolled products were con- siderable 1927, though there was decline 46,000 tons rails. Some the increases were: 7700 tons wire rods, 37,000 tons structural shapes, 5400 tons sheets, 6000 tons hoops, bands and cotton ties, and 22,600 tons wrought pipe. There was decline steel bars the extent 14,000 tons. In- gots, blooms, billets and slabs dropped over per cent, more than 17,000 tons. WHERE THE CHIEF EXPORTS WENT has been the case for many years, Canada was the largest buyer our products last year, taking 38% per cent the total against per cent 1926. Shipments Canada declined 11,000 tons 771,197 tons the first months 1927. Japan took more from last year than the preceding year about per cent. The total months went 251,153 tons, 12% per cent all our exports. other DOLLARS PER GROSS TON was further moderate addition the iron and steel shipments from the United States foreign countries 1926. Figures for months show total 2,012,- 541 gross tons, against 1,969,022 tons (11 months) year earlier. true that this increase was accounted for wholly large exports scrap which months 1927 exceeded the 1926 figure 118,600 tons. Other products flowed outward good volume, however, with varying changes from the preceding year. Increases 19,000 tons tin plate, 3000 tons wire, 25,000 tons pig iron, and 118,600 tons scrap were partly offset decreases 24,000 tons bars, 5000 tons plates, 19,000 tons galvanized sheets, 12,000 tons steel sheets, 3000 tons hoops, bands and strip steel, 2000 tons wire rods, 20,000 tons structural material, 8000 tons rails, 7500 tons rail fastenings, 16,000 tons boiler tubes, and 2500 tons wire nails. IMPORT DECLINE LARGELY PIG IRON Meantime imports have shown per cent shrink- age—from 1,034,583 tons months 1926 686,- 279 tons year later. Nearly all this falling off accounted for pig iron and scrap; together they Fluctuations Over Post-War Years THE IRON AGE Composite Prices Pig Iron and Finished Steel. The relative stability finished steel prices, when compared with pig iron, continues demonstrated. The highest finished steel composite figure during 1927 was per cent above the lowest; pig iron the divergence was 12.4 per cent. Since the peak early both trends have been downward. Finished steel has lost per cent and pig iron per cent country, aside from these two, took much 100,000 tons. Cuba (87,480 tons) was third position, with Ar- gentina (75,465 tons) and Mexico (75,361 tons) fol- lowing close together fourth and fifth. 1926 Mexico was third and Cuba fourth. Other countries taking upward 50,000 tons the first months last year were Brazil, Colombia, Great Britain and the Philippine Islands. China took little more than 49,- 000 tons. Chile and Venezuela were beyond the 50,000- ton mark 1926 but dropped well below last year. Rolled steel accounted for about per cent our exports last year, the year before. imports rolled material made heavy advance over preceding years, reaching about per cent the aggregate, compared with per cent 1926. Belgium had large lead the source imports the first months the year, with total 185,- 939 tons. France, second position, sent 125,411 tons, followed closely Germany, with 121,829 tons. Other countries were far below. Canada sent 68,871 tons; India, 59,108 tons; Great Britain, 50,328 tons; Nether- (Concluded page 110) The Iron Age, January 1928—5 Decline Railroad Participation Notable Buildings and Other Construction Take ture and Food Containers Gain 6—January 1928, The Iron Age HIN tion structural shapes and wire 1927 were more than offset losses other products. result the year fell nearly per cent behind 1926 rolled steel out- put. Steel bars recorded the most notable drop—over 800,000 tons, per cent the total decline 2,743,000 tons. Production estimated 32,- 039,000 gross tons, compared with 34,782,000 tons 1926 and 32,660,000 tons 1925. The total was above the 31,580,000 tons 1923, but below the 33,068,000 tons 1917 and 32,- 380,000 tons 1916. year, aside from those mentioned, has equaled the 1923 figure. Estimates production are based returns from rolled steel makers accounting for 30,554,000 tons, over per cent the year’s total. This high rate affords further proof the spirit cooperation the in- dustry providing, confidence, in- formation value the common cause. Less than per cent the industry had estimated. Conse- quently the dependability the total figures has been improved over those years less abundant returns. Moreover, larger proportion than ever before provided detailed classifi- cation distribution their ship- ments. This group accounted for per cent (24,991,000 tons), compared with 73.3 per cent last year and 65.5 per cent 1925. The table the center pages and shows com- posite these data, furnished companies. determine the final place consumption the large tonnages shipped the steel makers job- bers, careful allocation has had made, paying due regard the class material and the customers the jobbing industry. Because the necessity redistribute such large tonnages, ratio figures taken from the table covering per cent the out- put would misleading. The jobbers furnish very little material the railroads, but sell many thousands tons builders. The automobile plants buy practically all their re- What Ste AGRICULTURE quirements direct from the mills, but much the oil, gas, water and mining tonnage passes through warehouses. Warehouse purchases constituted 12% per cent the total steel sales reported the companies which showed complete distribution their product. More than 3,060,000 tons fol- lowed this channel the way into ultimate service, out 25,000,000 tons reported. Among the items thus passing through the “middleman,” pipe, with more than 1,050,000 tons, represented per cent. More than 500,000 tons wire, and some 300,000 tons each sheets, bars and shapes, were sold through the jobbing trade. taking more steel than ever be- fore—more, even, than the record- breaking preceding year—buildings and other construction have taken first place 1927, relegating the railroads second position. estimated that construction absorbed 7,050,000 tons steel, while the rail- roads accounted for but 6,125,000 tons. This estimate the complete distribution places the automotive consumption above 4,500,000 tons. Estimates the total production the various forms steel 1927 are given table this column. Bars, including concrete bars, con- tinue hold the top position, with over per cent the total. Sheets were second place, with pipe, shapes and plates, closely grouped, following. preparing this table allowance had made for the final conversion into finished product such billets, slabs, sheet bars, wire rod and skelp were sold those forms the principal makers. Estimated Production 1927 Gross Per Tons Cent Heavy rails......... 2,559,000 8.0 Track accessories.... 979,000 3.0 Structural 3,632,000 11.3 Hoops, bands, cotton 732,000 2.3 931,000 2.9 1,830,000 5.7 4,539,000 14.2 Pipes and tubes..... 3,713,000 11.6 Wire products....... 2,842,000 8.9 All other products... 708,000 2.2 32,039,000 1927 Was Fifth Year Rolled Steel—8 Per Cent Off from 1926 High Strue- tural Shapes and Wire The Iron Age, January 1928—7 inetee nty-S TIN Forms Steel Different Industries Took 1927, Showing Percentages Making the Total for Each Industry Hoops, Track Bands Tubes Wire Acces- and Tin and Prod- Strip All Rails sories Plates Shapes Bars Ties Plate Sheets Pipe ucts Steel Others Railroads (incl. cars and locomo- 40.7 15.1 13.8 6.4 8.9 1.1 5.2 1.0 1.6 6.2 Buildings, bridges and other con- struction (not railroad)... 11.9 31.3 17.3 0.9 1.1 8.9 18.2 6.7 1.6 2.1 Automobiles and trucks........ 6.1 3.8 34.6 7.6 1.0 30.7 1.1 4.3 9.7 Oil, gas, water, mining and 0.5 11.5 3.3 5.5 2.8 7.3 57.6 3.4 1.2 Food containers................. 3.5 0.8 4.7 73.6 13.3 2.1 1.1 0.9 48.5 16.9 18.3 1.0 1.2 7.1 1.0 2.4 1.0 2.8 Machinery (electric, textile, ma- tools, etc.)........... 10.5 10.1 46.4 2.4 1.1 6.3 5.6 12.6 1.0 4.0 Exports 8.9 11.6 9.5 9.4 16.7 9.3 2.0 Miscellaneous 0.5 11.8 7.3 18.2 2.1 2.0 25.7 17.4 5.3 2.0 Distribution Rolled Steel 1927, According Shipments Amount Each Form Taken, Thousands 3 Hoops, Track Bands Heavy Light Acces- Structural and Cotton Rails Plates Shapes Bars Ties Railroads (incl. frog, car and loco. 2,335.8 2.0 867.5 661.7 265.7 351.4 11.9 Fabricators and bldg. contractors 7.0 0.8 0.5 1,710.8 759.4 49.2 Auto. and parte 0.1 132.6 29.9 1,145.9 321.8 Oil, gas and water companies.... 2.5 1.8 0.9 202.8 27.4 47.4 11.3 Mining and lumber companies.... 21.2 64.4 11.1 33.0 17.1 33.8 3.6 Agricultural equipment.......... 0.6 0.2 0.1 37.6 11.3 196.9 21.2 Machinery and hand tools....... 0.6 1.0 0.1 70.0 51.2 361.7 15.4 Jobbers and warehouses........ 21.2 9.5 13.4 135.5 274.0 340.7 41.1 151.4 5.6 22.8 181.1 147.9 144.9 18.4 Miscellaneous ........... 18.4 4.6 12.4 383.3 171.6 588.5 70.9 2,558.7 89.9 928.9 2,680.4 2,750.0 4,014.3 630.5 Shipments, companies, undis- tributed ..... 327.6 358.2 856.1 3.6 Totals (95.3 per cent of total 89.9 928.9 3,008.0 3,108.2 4,870.4 634.1 production aut Building Steel Surpassed OMPARED with 1926, there was considerable change the proportions steel taken several important industries. Agriculture and the “tin can” Other forms % interests both advanced from per cent the total 1926 about per cent 1927. Exports gained, lower aggregate steel produced. falling off was registered the oil and mining group and smaller drop the automotive industry. The railroads took much less than 1926, while the building industry, maintaining its enormous stride the preceding year, total tonnage. Shipbuilding (not shown separately the diagram page took per cent the rolled groups, the four largest avenues consumption showed used. Instead per cent, 1926, they accounted for only 62% per cent the aggregate 1927. This the smallest such ratio since 1922, for the “big four” absorbed 63% per cent the 1925 total, per cent OIL AGRICULTURE EXPORT that 1924 and per cent 1923. Construction activity has shown healthy and well-nigh steady Consumption Important Industries. gain. From per cent all 1922 has advanced per cent 1927, with the only setback (from For example: railroac per cent 1924 17% per cent 1925) representing per cent was rails, per cent actually increased tonnage, though rate gain plates, per cent bars, etc. less than was registered other lines. 8—January 1928, The Age | | Son What Percentage Each Form Steel Was Distributed 192 Food and Buildings Other Auto- Rail- Agri- Ship- Con- motive roads struction building tainers 5.1 10.7 1.3 60.2 2.1 2.7 3.5 1.0 4.2 60.6 Pipes and tubes.......... 1.5 0.9 34.3 Hoops, bands, etc........ 50.0 3.0 4.2 8.9 0.6 9.6 Among the Industries Oil, Gas, Ma- Waterand Ex- Mis- Mining 5.3 5.8 1.5 1.4 2.5 2.4 3.6 8.7 6.2 16.2 3.3 2.4 4.9 10.0 9.4 2.5 3.0 15.2 1.6 4.3 5.4 27.6 0.8 4.1 17.4 5.7 5.3 3.2 6.2 30.1 1.8 41.2 8.4 10.2 3.9 2.9 2.7 14.2 1.3 1.3 28.6 6.1 4.5 12.4 Companies Producing Per Cent the Year’s Output Gross Tons, Different Industries Black All Other Plate Black Tubes All Billets DM Wop +3100 Sheet for Plate and and Wire Strip Other and and Wire Tinning Sheets Pipe Products Steel Finished Slabs Tin Bars Totals 7.5 178.3 46.7 44.7 14.2 245.8 45.9 0.5 0.6 8.3 360.0 42.0 191.8 90.8 83.0 16.9 7.5 4.5 0.6 19.6 931.3 29.9 117.8 434.0 28.0 178.1 105.9 6.5 2.4 62.3 85.9 812.0 22. 0.5 14.1 21.2 0.2 65.8 0.5 10.6 5.3 19.0 0.5 6.8 1.2 0.2 3.5 72.5 3.0 335.8 18.4 7.0 24.1 0.2 97.9 1,000.4 95.6 0.6 23.4 12.3 1.5 3.9 18.1 0.3 7.2 3.4 6.8 0.5 5.1 12.1 0.4 0.3 21.6 28.9 29.8 5.2 29.7 36.8 4.8 107.3 297.2 1,052.7 501.6 61.8 32.3 36.1 129.3 7.5 285.3 209.5 182.2 119.0 3.2 28.2 2.7 0.1 7.9 12.2 80.7 754.3 170.5 357.1 241.5 60.0 119.5 90.3 95.4 11.1 1,576.0 3,024.0 2,377.2 541.5 498.5 351.9 92.1 82.7 335.9 679.5 452.3 154.6 751.5 926.2 250.7 374.2 3,359.9 3,056.7 2,221.1 881.9 1,278.1 476.6 466.3 Railroad Tonnage 1927 Nearly per cent the steel tonnage bought the railroads consisted rails. Almost one-third the construction tonnage was structural shapes. the automobile purchases, one-third consisted bars and nearly equal quantity sheets. Much more than half what the oil and mining interests took was pipe. About per cent the agricultural ton- nage was wire and more than three-fifths the re- mainder was bars, mainly used machinery manu- facture. Three-fourths the food container tonnage consisted tin plate and half the remainder was sheets. the tonnage going into ship- building was plates, shapes and bars, the former greatly predominating. These facts, and many others, are brought out the table and the diagram page More than six-sevenths all the rails went the railroads, shown table and diagram page They took, also, nearly all the track accessories and one-quarter the plates. Automobiles accounted for the hoops and bands and the strip steel, one- third the sheets and more than one-quarter the steel bars. Agriculture absorbed one-quarter the wire. Construction required three-fifths the struc- tural shapes, one-third the pipe and one-quarter the plates, and was second only the automobile the taking bars. Food containers took three-fifths the tin plate, while the oil group was the greatest purchaser pipe, with more than two-fifths the total. Exports ran unusually heavy tin plate, more than one-sixth the output going abroad. 75 © Railroad 86.5 Agricu/ture27 RAILS WIRE PLATES SHAPES PIPE SHEETS BARS PRODUCTS All Other All Other Railroad Gas, Mining 32.5 Automotive Building Which Industries the Different Forms Steel Served 1927. bars, per cent went automotive plants, 2014 per cent into building, ete. The Iron Age, January » | | Some Improvement Steel Trade Forecast for 1928 Greater Volume and Enhanced Prices Anticipated Doctor Haney—General Business Betterment Expected Help DR. LEWIS HANEY New YorK UNIVERSITY BUREAU BUSINESS declining trend business, none the less true that the total volume for the year was not greatly less than its predecessor. Industrial pro- duction was little more than per cent under 1926. Manufacturing production was nearly per cent less, largely because the sharp decline automobile pro- duction. Wholesale sales were nearly per cent smaller than 1926 (see Fig. 3). Railroad freight tonnage for the first months was 2.3 per cent smaller than the same period the preceding year. These comparisons are indicative the strong basic conditions industry and manufacturing. Some indexes business actually showed in- crease over the preceding year. Bank debits were per cent greater and retail sales were between and per cent larger. course, the very large volume trade securities, record breaking levels, partly re- sponsible for the rise bank debits. But, while the total volume for the year was thus means small, the trend during the year was downward. Comparing November, 1927, with Novem- ber, 1926, industrial production and manufacturing fell about per cent, and employment factories was more than per cent smaller. Freight traffic actually de- clined about per cent (see Fig. 1). Imports, which are good measure industrial activity, were more than per cent smaller (Fig. 6). One the largest declines during the year occurred automobile pro- duction, which was per cent lower November, 1927, than year earlier. Building activity, however, had recovered November within per cent the same month 1926. The foregoing statements apply production and trade commodities. Speculative transactions se- curities and the financial factors show different trend. The average price stocks was some per cent higher LTHOUGH 1927 was characterized generally 140 NUMBERS INDEX RAILROAD TONNAGE last November than the same month 1926, and brokers’ loans showed almost exactly the same increase. The net demand deposits the member banks the Federal Reserve System were 8.7 per cent larger and total loans and discounts were nearly per cent. Some phases business, too, showed large gains. Thus bank debits, spite some decline toward the end the year, were 15.8 per cent larger. Farm prices showed notable gain 7.9 per cent and Bradstreet’s index wholesale commodity prices averaged 5.9 per cent higher. Thus the end the year find the physical vol- ume industry and trade relatively low level— somewhat below normal—while security prices were very high and bank credit much extended connection with investments stocks and bonds and loans secured them. Improved Basic Business Conditions OME real progress toward improvement business fundamentals was accomplished during 1927. The following impress being the most important points: recovery occurred farm prices, which gained prices non-agricultural commodities, thus correcting one the serious maladjustments the preceding year (see Fig. 2). the whole, the agricultural situation ap- pears have turned its post-war corner. The cost living was reduced 1927, the National Industrial Conference Board’s index falling 2.4 per cent. Residential rentals were re- duced materially. Certain basic industries which have been depressed during recent years showed recovery. This notably true leather and copper. Cot- ton manufacturing, too, made gains during the year and wool manufacturing worked into po- Fig. 1—While Freight Traffic for the First Months Was Only 2.3 Per Cent Lower Than 1926, November Showed Decline Per Cent. Bank debits, the other hand, 10—January 1928, The Iron Age made the highest record ever known, averag- ing per cent above 1926 | : | | 10 | = 4 | 1923 1926 1927 Fig. 3—Whole- sale Trade 1927 Was Per Cent Below 1926, But Retail Sales Are Estimated Per Cent Above the Pre- vious Year. tion showed de- cline little more than per cent Fig. 2—Farm Purchasing Pow- May Meas- ured the Re- lation Between Prices Farm Products and Prices What the Farmer Buys. present the farmer appears have reached more comfort- able position sition from which improvement may expected. Perhaps the outstanding development this sort, however, was the recovery the cattle raising industry. Improvement European financial and in- dustrial conditions (particularly the former) was notable achievement, the outstanding event being the resumption gold basis Italy. The chief currencies are now stabilized and this will benefit world trade. connection with the preceding point, there were clear signs more effective coopera- tion among the central banks the leading coun- tries and the beginning what hoped will orderly readjustment the gold supply the world. Considerable gold exports occurred toward the end the year, without indications causing serious disturbance (see Fig. 6). Within the United States progress toward readjustment over-extended real estate situation appears have been made without crisis. Industry has adjusted itself more com- pletely the so-called hand-to-mouth buying regime, the progress made operating with smaller inventories being notable. Progress has been made toward more effec- tive cooperation number industries, such textiles, copper and sugar. The formation trade organizations designed use statistical in- formation more effectively and eliminate un- NUMBERS =) fair competitive practices may, not abused, mark real advance. Further Adjustments Needed OME the maladjustments which were noted year ago were corrected 1927. that time attention over-production copper, cotton textiles, oil, lard, automobiles, building, pig iron and corn. Probably may said that each these cases there now over-production, although some further correction may required cotton textiles and pig iron. the other hand, some the former maladjust- ments still exist. Stocks manufactured goods pro- ducers’ hands again appear too large for comfort, and certainly prevent the conclusion that any shortages exist. (It may hoted, however, that this is, part least, natural consequence the practice hand- to-mouth buying.) Bank credit even more extended than the beginning the year, and noteworthy that the large increase bank credit has been due almost entirely loans and investments connected with the security markets. This, opinion, con- stitutes the chief maladjustment. Money rates still appear out adjustment with the commodity price level, although the situation now reversed comparison with that which existed year ago. that time money rates were relatively high, now they are relatively low, and appear partly WHOLESALE 1924 1926 1927 The Iron Age, January 1928—11 | ) la vv UNFILLED ORDERS AND PRODI account banking policy which may well called “artificial.” seems, too, that imports are relatively large when compared with exports (Fig. 6). Since August, least, the recession business has been clear that one could fail see it. The ad- justed index bank debits that month, shown the first chart, was 143 per cent the average for 1921-1926, but fell per cent November. road freight tonnage was 109 per cent and fell 102 per cent. Here, however, the similarity between the two ceases. Railroad traffic has declined since Névem- ber, 1926, while bank debits rose steadily and sharply until last August. Freight traffic the lowest since September, 1924, while bank debits are still higher than any time 1926. This one the most pronounced divergences record. goes hand hand with the outstanding characteristic 1927: The difference trend between “industry” and one receding, the other expanding. The rise bank debits the inflation which has affected speculation and retail buying, and the relative over-extension bank credit these direc- tions, while the decline freight traffic the contraction industrial output. This condition represents maladjustment, but does not seem necessarily serious. For one thing, partly due lower basic level interest rates, based the large supply and lower unit productivity invested capital. The trend yield bonds (which fairly represents the basis for capitalizing reasonably certain income) has been rather steadily downward. This has justified higher prices for equities the in- vested capital which yields such income. Thus abun- dant funds and lower basis for capitalization have brought higher capital values spite the reduced volume business and earnings. course, such trends cannot forever. The outward movement gold and heavy investments COMPOSITE FINISHED STEEL STEEL PRODUCTION. Note: /923- for Prices and Orders and Normal for Production Fig. 4—Finished Steel Less 125.0 Steady Price 1927, Dropping From Virtually Uniform 12- Month Level Per Cent Low- 100 er. Production fell off perhaps per cent. Unfilled orders were low- er, but their de- has been succeed- movement abroad are tending check the declining trend inter- est rates and thus terminate the advance values. But, just stocks and bonds went 1926 and 1927 while business receded, business may ex- pand 1928 spite some recession stocks and bonds. Moreover, before long, any increase net earn- ings business will tend offset decline the basis for capitalizing such earnings. Business Likely Gain Finance HAT seems likely, readjustment the relation between business and finance which will temporarily check both the decline the interest rate and the rise security values sufficiently bring them into line with business earnings. Earnings have fallen low that very low basis capitalization required justify present security values. Therefore, what needed for time higher earnings. Tempo- rarily this will probably cause higher interest rate and lower security values. few months, however, higher earnings and cessation rising interest rates are likely again bring higher security values. completed year. Nineteen hundred and twenty- eight will probably see the initial phase develop- ment which will extend over period years and attended series readjustments, which gold exports, foreign competition, manipulation money rates the Federal Reserve Board and corresponding fluctuations security values will the outstanding features. Steel Sales Unusually Stable the iron and steel industry, the year was one rather steady and sharp recession. the fourth chart shows, the decline began June and the output steel ingots November, allowing for sea- sonal conditions, was the lowest since September, 1924. PRICE Fig. 5—Commodity Prices Have Been Rising Steadily for Several Months. Finished steel appears but pig iron still clings its lowest level since 1916. Scrap has been below all records since 1921 but now going upward 12—January 1928, The Age . Fe Prices | | Summary Year’s Developments Outlined Doctor Haney The year 1927 was one.of declining volume industry and business profits. the end the year the recession business, notably steel production, had gone far that the end the decline appeared near. The absence credit stringency, recovery commodity prices, and improved farm purchasing, power, all strengthened this conclusion. The year notable for the divergence between “business” and “financial” indexes, rather steady expansion bank credit and security market operations going while industry receded. Toward the end the year, the gradual tight- ening the position bank credit (large gold exports and high brokers’ loans), and the high level prices for many stocks and bonds, indicated the probability higher money rates come and readjustment the security markets. the new year opens, the outlook more favorable than that which con- fronted 1927, for business recession the last stages and not beginning, was the case year ago. recovery the volume industry and business profits probable during the first half the year. The tightening money markets that expected may sufficient check the expansion business later on; but far can now seen rising trend, followed irregular sta- bility, probable. Sustained construction activity, increased automobile produc- tion, and moderate gain railroad buying promise increased steel business during the first half year. was per cent below normal. The year began and ended with steel production lower than 1926, and the peak reached May was considerably under the high point reached July and August, 1926. Much the same situation existed pig iron production, there being rather sharp recession from April on. The decline October and November was not great the case the steel output and, accordingly, the year ends with pig iron production relatively high judged steel-making requirements. The ratio the aver- age daily production pig iron the average daily production steel was abnormally high most the year. the end, pig iron production was only per cent under normal. Unfilled orders the Stee! Corporation reached bottom May, after long decline which began Stronger markets for iron and steel are probable February. December, 1925. The unfilled orders have been un- usually stable low level, but the trend was gradu- ally upward toward the close the year. Sales some the chief items finished steel during the first months 1927 amounted 6,591,000 tons, which compares with 6,619,000 tons the pre- ceding year, and practically the same the volume recorded the first months 1925. sales have been unusually stable throughout the year and November increased point considerably above year ago. This chiefly due the recovery building activity and agricultural buying farm machinery and implements. the whole, the activity the steel consuming (Concluded page 109) Fig. 6—Imports, Which Are Re- garded Good -. Excess Gold Ba/ance IMPORTS ee Index Indus- trial Activity, Were Per Cent Lower Than 1926, But Remained Large Relative Exports. Gold now flowing outward heavy volume The Iron Age, January 1928—13 j 4 ExPORTS Aircraft Increasing Importance Metal Industries Aviation’s Demands Will Added Those Due Changes Air Travel Will Cause Modes Land Travel HORACE IRCRAFT manufacture giving the world new the metal-working industry, already respectable proportions and growing creasing speed. Last year the Department Com- merce listed more than manufacturers, many dis- tributers aircraft, and several hundred firms inter- ested accessories and associated products. probably conservative say that the activity the firms listed has doubled 1927. and that many new firms have entered the industry. Flying fields hundreds are being established cities and towns throughout the country. Chicago alone claims dozen more. While much this growth may the mushroom variety, resulting from popular enthusiasm, and there- fore short lived, the importance air transportation such that large and steadily growing industry assured. The transportation air-mail private firms under contract the Government today covers more than 8000 miles scheduled routes with over 4000 miles lighted for night flying. The Army and Navy are placing large orders with private manufac- turers, and the use airplanes for private flying, both for business and pleasure, has reached astonishing figures. One manufacturer alone scheduling pro- duction 100 planes per month for such use; another small town the Middle West has five busy aircraft factories; there are some sixty odd industries the Detroit territory engaged aircraft construction, operation associated activities. Such instances could extended long list. Dirigibles, although not present greatly the public eye, have clearly demonstrated their commercial application and are certain take important indus- trial place before many years. Materials Developed for Aircraft Prove Great Utility Other Industries The influence aircraft metal industries may classified direct, semi-direct, and indirect. Under the first heading comes the construction