Iron and Steel

The expansion in production and trade, and the upward trend in raw material prices, were both strongly maintained. Perhaps the most interesting and significant examples of economic tendencies now visible throughout almost all lines of business, have been furnished by recent developments in iron, steel, oil, cotton.

The first named industry is now experiencing a veritable boom, attended with record production and mounting prices. Current production of pig iron has surpassed even the unusually active month of March, 1920, which followed the futile steel strike of 1919, and is now only some 3 or 4% below the huge war-time output attained in September, 1918, just before the Armistice. Despite this sensational rate of production recently attained, however, the demand is so urgent and extensive that new price advances have occurred in pig, and in both semi-finished steel and several steel products. Last month the Steel Corporation's unfilled orders--a favorite barometer of general business conditions in this country--increased 373,000 tons. The independent companies, however, have no such proportion of their business booked ahead.

The demand for iron and steel comes from a variety of sources-- indicative of the wide extent of the business recovery this winter. Railroads are purchasing much needed equipment, as was seen when the $31,500,000 issue of Pennsylvania Railroad 5% Equipment Trust Certificates was bought out last week. Another heavy buyer has been the automobile industry, which is preparing for another banner year. The increasing production attained by oil companies has led to large purchases. Likewise, the building boom is absorbing quantities of structural steel. In addition, curtailment of operation in the Ruhr district has caused appreciable foreign purchases in this country by European nations.

Yet there is some indication in trade circles that recent price advances are already checking buying. This is natural enough, with pig selling at practically $30 per ton, or about $11.58 above the level of a year ago. In the present type of steel market, the first indication of an important curtailment of either production or prices will, of course, be seen among the independent companies, rather than with the more stable and less speculative Steel Corporation.