Evening star., 1932-01-31
INCREASE IN STEEL
DEMAND IS NOTED
Ingot Production During Last
Week Has Averaged 27
Per Cent of Capacity.
Special Dispatch to The Star.

special DlSpatch to The Star.
PITTSBURGH, January 30-At var
lous times in the past when poor steel
company earning reports were in pros
pect or were being issued there has
been talk in steel market circles that
sitter prices or a encouragement Of
price cutting would result.
Such talk has been ConSpicuouSly
lacking Of late. Whether in the for
mer instance the inference was correct
that steel executive had to see the
quarterly financial report to know how
his company was faring. no one has
suspected of late that executives did not
know fully how bad things were.
Total Earnings.
More attention should be paid to
total earnings and less to lack of earn
ingS per share, whether common or
preferred, for the familiar comparisons
take things out of the proportions that
should be considered in these very un-
usual times. For the December quarter,
for illustration, the Steel Corporation
showed deficit of 1908, Ais after the
aid of S4,997, ,961 special income, max
ing a real deficiency of S20,000,000, Of
which the common dividend paid was
about one-fifth. More than half of the
$4,000, 900 was represented in depreci-
alton and depletion, S11988l90. That
item has become a vague one. Deple-
ton when there was SO little iron ore
mining was small item, and mill ma
chinery wears out to a small extent.
Using the Steel Corporation as an
illustration. the significant thing is that
total earnings after running expenses
and taxes, and before depreciation in
terest. were S3,970,920, on total busi-
ness which may be estimated at sl15,-
100000 to S120,000,000. An altogether
unusual proportion of the turnover
was in general running expenses, sal
aries and taxes, and an unusually small
proportion was in raw materials and
such wages as were paid solely by rea-
son of production. ..
1t is question what a really sub
stantial increase in steel demand
would do to steel prices. One might
suppose that the influence would be
distinctly a stiffening one, but when
increased operation would do SO much
toward distributing running expenses
the temptation to the sales manager
or executive is great. Furthermore,
there is the testimony of all steel mar
ket history that in a general and great
swing the lowest prices have come after
demand had turned distinctly upward.
Individual orders would become larger
and more worth going after There
would be the temptation to get a good
operating rate and backlog first, and
then think about higher prices.
Ingot Production.
Steel ingot production in the last
week has been at fully 27 per cent,
some estimates running two points
higher. From a marketing standpoint
this is a curious showing, interpreted
unfavorably by some, favorably by
others. No one can see that any Of
the various steel consuming industries,
not even the automobile industry, has
markedly increased its requirements,
and thus things do not look we'll On
the other hand, somehow the sum total
of steel demand has increased by one
third or more. If it can do that with
little or no apparent reason or excuse,
it might show remarkable increase
should conditions definitely and viSibly
improve.
(Copyright, 1922