The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1926-12-31
STEEL TRADE OUTLOOK FAVORABLE
Expert Sees Continuation Of
Huge Buying Power
ny JOHN w. HILL


Financial Editor, Iron Trade Review
Written for The Tribune and NEA
Service
Nineteen twcnty-six was u period
notable for the widespread diffusion
Of prosperity. Industrial production
climbed to uncxamplcd peaks. Wages
and employment were high and the
distribution and consumption of
goods were withou. parallel.
Business profits exceeded all other
peacc-timc years. Earnings Of
large group of representative indus
trial and mercantile companies dur
ing the year ran nearly 80 per cent
ahead Of those for 1925.
The iron and steel industry has
shared literally in these good times.
Recognized as Il yard stick by which
general industry may be gaugcd. steel
production in 1925 surpassed all
former records in the history of the
country.
The output Of steel ingots, accord
ing to preliminary estimates by Iron
Trade Review, Appropriated AZ
10000 tons in 1926. This exceeded
the previous high mark for all time
+, of AA,.00.0O0 tons in 1925 BY nearly
~ per cent. Pig iron production in
1926 was about 1925 900 tons, a gain
and second only to the record output
of 3 per cent over the 1926 total
Of 4O,O25,OOO tons in 1923.
Nice Adjustment Reached
One of. the most important develop
mcnts in the steel industry during
the past year has been the nice ad-
justmcnt Of production to consump-
ton. Hand o-mouth buying has been
adopted, for the time ut least, as a
dominant policy by users of steel.
The new year is beginning with "A
wholesome absence of excessive
stocks of steel anywhere.
! Considering the outlook for the
| iron and steel industry it is ncces-
sary to examine the prospects for the
great industries which consume tsis
universal metal. Of every 100 pounds
Of finished steel, GO to IS pounds
normally are used by four great in
dustrics: building, automobiles, oil
gas and water, and the railroads.
i Present indications are that build
ing construction will be active in
1927. The gradually declining trend
of recent months may continue. Yet
contract awards on hand throughout
the country exist in huge volume
This gives assurance that there will
be no sudden recession.
The automobile industry now uses
each year about Is pounds of each
100 pounds of finished steel. In 1926
the total output of cars and trucks
is estimated ut approximately 4,50O,-
1000, a new record for all time.
! During the closing months of the
year there was rapid decrease in
the rate of motor car production, due
partly to the seasonal falling off oil
sales and partly to the knowledge OF
producers that stocks Of finished cars
in the hands Of dealers were getting
too high.
As sales are stimulated by the 1922
motor shows and by the approach OF
spring, production will increase. II
the main 1927 promises to be q fairl.
satisfactory year for the automobile
industry. Output should not fal
more than S per cent below that OF
1926. Competition. however, vii
be extremely keen and more price
reductions are possible. e
Oil, Gas and Water
! The third great consuming industr,
Of iron and steel is oil, gas and
water. Because of the probability OF
continued increases in the production
Of petroleum, the use of steel by
these industries should increase in
1927 over that of 1926.
; This leaves the railroads as the
great uncertain factor in the outlook
\ Present evidence is that the rail.
roads will buy more steel IN 1927 thar
in 1926. They have been through .
year of unprecedented traffic. with
consequent great wear and tear or
rolling stock. Their earnings for the
year, passing 81 zoo. 100000, are with.
out parallel. Their purchase of equip.
ment in recent years has been ia,
below all estimates of their needs.
n Assuming, therefore, that the rail.
roads will make greater OUTLAWS in
1927, this source of demand will tend
to offset any declines in. the use oil
steel in other quarters.
]. A Favorable Outlook
For the steel trade, then, the out.
look for 1927 is favorable. For bust.
ness in general there are no symp.
toms of fatal illness anywhere. Pur
chasing power has suffered some
what in the south from the fall o.
/, cotton, but that has been partly off
Iset by the acceleration of the textile