Evening star., 1947-07-30
Steel Price Increases
Can Be Passed ALONG
10 Public, 0Ids Says
BY ths Assoeiotsd Press


= NEW YORK, July 3O.--Steel
CONSUMERS, studying the S. to $40
. ton price increase of the big
producers, we're told by big
steels" chairman they could pass
It on without threat of buyers
resistance at the retail level.
= irving s. Olds. United States Steel
Corp. chairman. announced an
Imminent average increase of IS on
IT'S products, with the possibility Of
around $3.50 more to follow II the
fecent coal wage settlement increases
steel production costs as much as the
industry now estimates.
: Trade sources estimate this rise,
along with increases by Bethlehem
Steel. Republic, National, Jones &
Laughlin, Inland, Youngstown Sheet
e. Tube, and others, will raise the
Nations steel bill $300,000,000 to-
370,00o.000 year.
But Mr.. Olds told a press confer
ence yesterday that, translated into
retail products, the increase would
mean about $40 for an automobile, or
30 cents for refrigerator.
; Five Months Backlog on Hand.
Because of the great demand for
products into which steel goes, I
question If any consumer resistance
will be engendered at this time," he
said.
Big Steel itself has a backlog of
orders calling for near capacity pro-
duction for five months. Mr.. Olds
said there was mo indication of any
slsckening in the overall demand
for steel, and nothing in the wind
except perhaps the steel scrap
scarcity, that could change our pro-
duction rate"
United States Steel operated at 81
per cent of capacity last week and
was scheduled for 992 per cent Of
capacity this week, he added.
Iron Age. national Woodworking
weekly. estimated the round of steel
price increases added $3.50 ,000,0 to
370.000.000 to the consumers an
nual bill, and said the price level
now was 81 per cent above the aver
age prevailing in 1889.
1t added: Prices on practically
all items using steel will soon be
higher"
The papers weighted finished
steel composite price rose this week
$3.50 ton, and would go to two
week total of s6.17 next week if an
expected increase in the price of
rails materializes, Iron Age said.
with the current steel price ad-
vsnces effective Immediately on all
shipments, third-quarter earnings
for the steel industry as whole
should approximate first-quarter
records-among the highest in steel
industry history" Iron Age said.
The Iron Aage steel scrap aompo-
site went to new record high of
S40.33 a gross ton, up SO cents from
last week.
Steel Ingot Production Rises.
Steel ingot output rose half
point to 94.5 per cent and the paper
predicted 1947 output will ap-
proach the all time war boom year
Of 1914 when $4,000 900 tons were
turned out" -.- .
United States Steel reported sec
ond quarter net income of $29 1885,
1868, equal to s265 a share, compared
with $13,900,270. or 81 cents a share,
In the second quarter last year, when
operations were affected by two
month coal work stoppage.
Finished steel shipments set a
record at 5,2Ss,716 net tons, COM
pared with 4,S43,674 in the preceding
quarter and 3,168,589 in the similar
1s46 period.
United States Steel set aside
s26 1897, ,602 for depreciation and
depletion, compared with $14,131 ,343
in the 1946 second quarter. Mr.. Olds
explained that "the present-day cost |
Of new facilities to replace those
worn out through use in production
is substantially more than the orig
inal cost of the facilities so re-
placed"
Mr.. Olds said the directors were
mindful Of their responsibility not
to do anything that could throw the
economic machine out of balance"
and did not want to push prices up
higher than necessary"
Production costs have already in
creased more than IS a ton of
finished steel, he said, due to higher
wage scales, mounting cost Of raw
materials, increased cost of goods
and services, and greater cost of
replacing worn-out facilities. He
said the company hoped to effect
some economies in production costs.
An increase of $40 ton in steel
scrap prices in the last two months,
he said, would mean about $40, ,000,-
n00 Additional cost q year to IInited |