Evening star., 1942-01-11
Coal Prospects
Aided by Big
War Demand
Heavy Bituminous
Consumption Cited by
Standard & Poor's
Special Dispatch to The Star.

NEW YORK, Jan. 10.-DeSpite
reduced demand from non-essential
manufacturers, industrial consump-
ton of bituminous coal should con-
tinue at a high level, according to
a survey by the Standard g. Poor's
Corp.
Maintenance Of currently large
stocks also appears probable, so that
gains in production and sales are
forecast, at least after the first
quarter. The outlook for anthracite
sales is less favorable. but gen.
orally higher prices should limit any
decline in earnings.
First quarter bituminous coal out
put may fall moderately below the
1874 100000 tons produced IN the
first quarter of last year. Oper-
ations rose to capacity in March
194l, as industrial consumers stocked
in anticipation of the April strike
Since stocks are now near the recorc
highs of 1927 while serious labor
trouble appears unlikely, further
stocking will be limited.
1912 Increase Anticipated.
For 1912 as a whole, a fair gain
in production may be recorded. Re-
fecting the predominantly indus
trial use of bituminous coal, de-
mand is running at the highest level
since 1929, when 535 .0O0,0 900 tons
were mined. Many non-essential
industries must curtail their use
and many defense industries have
been operating at capacity for some
time. But lengthening hours and
additions to plant facilities, not tc
mention the greater military estab-
ishments, will prove the more I'M
portant factors. Competition from
other fuels has declined. while ex-
port demand is the best since 1875
Thus the years output may exceed
that of 1929 by a small margin.
Minimum prices for bituminous
coal. set on october l, 1910. were
based on 1936-1937 costs. Since that
time, greater and more efficient pro-
duction has reduced some costs
and the wage agreement has in
creased others.
Thus, the Bituminous Coal Divi'
sion is revising minimum prices
with changes likely to parallel those
recommended by the examiner, ar
average increase of 7.2 cents a ton
or "a per cent. Because the two
year wage agreement, effective May
! !, 194l, raised producers costs about
27 cents a ton in the South, as com.
| pared with about 20 cents ton II
the North, increases in minimum
prices will be more marked in tht
Southern districts and will make
for competitive gains for Northern
producers.
| Maximums Discussed.
The division is also conducting
hearings on maximum prices. bu
it is doubtful whether any action viii
be necessary.
| The divisions consumer cOunSe
has suggested a level 20 per cen
above the minimum prices still il
effect. Such level would be mod
erately above prices now prevailing
in most fields.
Following the strike settlement
operators were able to advance post
ed prices roughly IS cents ton
and price advances generally wer'
sufficient to Offset increased wag'
| costs.
Bitulninous coal producers shoult
maintain earnings close to presen
favorable levels Further increase
in costs, particularly taxes, canno
be offset through higher prices. bu
volume gains after March will b.
beneficial. Likely changes in mini
I mum prices will again benefit North
ern producers, and Southern op
orators may have their area of com
petition further reduced.
AS was the case with bituminou
coal, anthracite consumers stocked
hcavily during the summer and early
fall Of 1941. The schedule of ad
vancing prices, doubts whethel
transportation facilities would prov
adequate. and the threatened fue
oil shortage in the East, with it
temporary ban on oil burners, al
encouraged advance buying.
With the last of the wage increas'
taking effect october l, producer
preferred to concentrate production
just prior to that. date. AS a con
sequence, anthracite producers op
Grated five days week, the maxi
mum permitted by union agree
ments, from July 4 until the frs
week of october. Output gains dur
ing this period largely accounted TO
the full years rise of about So pc
cent to 54,00O,00O tons.
Except in the event of protracteo
mild weather, price wars anything
like those of 1899 are most unlikely
Every effort will be made to main.
tain the producers ALLEGATION agree
ment, forecasting continued restric'
tions on output in order to remove
threats to the price structure.
Meanwhile, favorable demand fac
tors are at work. Fuel oil for house.
hold use should be in ample supply
but that for industrial use will be
limited. Coke is being diverted from
household to industrial use, anc
some oil consumers have converted
to anthracite. Finally, Canada Il
expected to require about 100000
tons of anthracite this winter, ane
a moderate gain In anthracite pro-
duction appears likely for 1912.
Higher Wages Offset.
After a one-day strike in May,
2-year agreement was approved
which provided, effective May l
l94l, q 71a per cent increase on al
day and contract wage rates to Oc'
tober /, 1941, and a 10 per cent in
crease thereafter, and a $40 toker
payment each year for vacations
Based on 200 days operation a veal
and average output per man o.
3.o2 tons day, the cost increase Il
5000 q ton.
BY not listing the customary
spring price cut of SOC a ton ane
then introducing the regular sum
mer schedule advancing prices, pro-
ducers carried the mine price fo1