Business & Finance: Steel Costs

Competition in the steel business is such that all producers are straining every nerve to slash production costs as never before in the history of the industry.

For many years U. S. steel makers have largely disregarded their waste products. Meanwhile German steel manufacturers have largely compensated themselves for their inferior supplies of raw materials and their smaller ordinary output, by utilizing to the limit all waste products of steel making. Now U. S. companies are following suit in a manner resembling that followed by Chicago packers with meat products years ago.

U. S. steel mills now make cement out of their “slag,” which was formerly thrown away as waste. Gases arising from coal-burning, instead of being allowed to escape, are now distilled in by-product coke ovens, and yield petrol, benzol and other derivative products employed in explosives, dyes, etc.

A process of rebuilding and remodeling old and inefficient blast furnaces is also going on. This has led U. S. steel to dismantle some of its oldest plants in the Pittsburgh district, and to rebuild more efficient ones at Youngstown.

The present price of steel products, at an average of $50.84 per gross ton, is only 37% over the 13-year pre-War average of $37.11. On the other hand labor costs, which constitute about half of steelmaking costs have risen very greatly since 1913. Common labor, for example, now costs 130% more than before the war. Without economies obtained by using waste products and modernizing plant facilities, most steel companies would now be operating at heavy losses instead of profits.