The Washington times., 1931-02-09
STEEL OUTLOOK
SLOW AS BUYS
DROP OFF
Big Customers of Industry
Hold Back on Orders; Dull
ness Predominating Factor
BY LEWIS HANEV,
Director New York University Bureau
Of business Research and Former
Economist Of Federal Trade
(Ommlaalon.

BY LEWIS HANEE,
Dirrctnr New York University Bureau
Of business Research and Former
Economist Of Federal Trade
CommiSsIon.
The recent bear drive on U. S.
Steel has naturally aroused re-
newed interest in the steel indus
try's outlook. Anyhow, that in
dustry is one Of our best general
barometers. General business is
not apt to show much recovery
before the steel industry picks up.
After a careful study Of recent
reports, my conclusion is that
steel is on a dead center, and may
have to slip back a bit in order
to get fresh start. There was
distinct upturn in the first part
Of January, which was n the
neture of a Snapback from the
preceding recession. In the last
two or three weeks, however, the
industry has made very little
progress The earlier improve
rlent has definitely slackened.
January figures will show some
gain in production. But this will
be less than hoped for and will
leave the industry at very low
level. The near future is mixed
and uncertain Some lines of
steel consumption show gains and
others not, but the heavier con-
sumers are mostly quite back
ward in their buying
Prices Are Real Test
The proof of the business pud-
ding is usually found in prices.
And the prices of iron and steel
are not exactly strong. The fact
is that steel markets have not yet
been tested by any large volume
of orders, but we do know that
some price concessions are being
made. 1t can also be said that
the prices of such raw materials
as steel scrap, pig iron and coke
are weak.
Some steel-buying industries
are doing fairly we'll. For exam
pie. the tin plate mills report
gains in activity and are operat-
ing al about IS per cent of capac-
ity. The manufacturers of cleo
trio refrigerators, steel furniture
and gas stoves are going ahead
fast enough to be increasing their
requirements of steel sheets.
In spite of financial difficulties
there has been a pickup in pipe
line projects, which has brought
some sizeable orders for the steel
plates used in making the pipes.
Buyers Holding Off
But the important standard
customers of the steel business are
holding back. The railways are
buying little. January freight car
orders we're the smallest of any
month since the war. The Chi
cago report of the Iron Age says:
"The unwillingnesS of rail-
roads to release (Order) rails
against new contracts is as
diScOuraging as their SIOwneSs
in making commitments for
1881"
In building. the chief hope of
the steel industry seems to lie in
public works, and Just now this
source of demand is slow in de.
veloping. BY spring, however,
there should be a good gain in
reinforcing bars, concrete mesh
and structural steel.
The automobile producers are
showing very mixed operations.
Chevrolet is up to 10000 cars a
month, which is just about the
same as the Ford output. On the
other hand, Studebaker is re-
ported to be producing only 300
cars daily. Chrysler subsidiaries
are barely fair. Hupmobile's op-
erations remain low. AS a re-
port from Cleveland to the Iron
Age says:
aside from Ford and Chev-
rOIet only two or three motor
car companies are operating
we'll"
Comeback To Be Slow
So in view of Cd the slow
ness of the demand from the
chief steel consuming industries,
90 the small demand for steel
scrap and 90 the evidences of
price concessions by steel manu-
factllrerS we Should MT eYDect
any large increase in steel pro-
duction during the next two or
three months.
Steel prices are more likely to
fall than rise. No turn is yet in
sight for steel company earnings.
Know the convenience of car owner
Ship-it C8n he had easily by turning
to the offerings in tOday's Classified
Ads.