STEEL POSITION

New Zealand Herald, Volume LXXV, Issue 22939, 18 January 1938, Page 5

STEEL POSITION

MARKET CONTRADICTORY PRESSURE IN BRITAIN AMERICA UNDER CAPACITY Many extraordinary contradictions are presented by the world steel industry. In Great Britain domestic consumption is so largo that production is lagging behind demand, but in the United States mills are operating at only 35 per cent of capacity ami in consequence American producers aro at tempting to exploit markets which they have not previously entered. The decision to stabilise prices in tho United Kingdom suggests that manufacturers there believe that the peak of production costs has been reached, and that any increase in prices would be more than counter-balanced by a falling off in demand. Leaving prices unchanged has meant a certain sacrifice of immediate profits, because steel manufacturers in Britain have sufficient orders booked to provide steady employment until the middle of the y§ar. Those orders were booked at prices ruling at the date of delivery, and few of them would have been cancelled had prices been raised.

Manufilt'turers, however, havo apparently deeideel- that the sacrifice of immediate profits was well worth while in order to assist tho maintenance of steady production. The high capital cost of steel plants requires that they should bo operated at or near capacity if protits aro to be earned. In recent years steel manufacturers havo urged consumers to postpone development schemes of a non-essential nature until the peak demand for rearmament purposes had been passed. Any substantial increase in prices might well have delayed those schemes for lengthy periods after the completion of ilio defence programme.

American mills arc facing a radically different problem. With production only 35 per cent of capacity, America is seeking outlets in Scandinavia and South America in competition with members of the Cartel, in which the United States has no membership. In th« past, American producers have usually confined their exports to particular markets, and this development may affect British steel makers, who, because of the domestic demand, have not been able to devote the customary attention to overseas customers. The circumstances are exceptional, and any suggestion that the United States should jyin the Steel Cartel would raise many difficulties. British and Continental makers have always relied on exporting a much larger proportion of output than the United States of America, which is now attempting to increase its exports. The older members of the Cartel would probably resist strenuously an agreement based on the present abnormal conditions. GRAIN AND PRODUCE TRADE IN AUCKLAND __ CONDITIpNS MORE ACTIVE POTATO " CROP DISEASE Brisk conditions are being experienced by Auckland grain and produce merchants. Business is settling down again to normal proportions, but shortages in staffs because of thq holidays and the necessity for arranging deliveries from overseas are keeping the trade active. The most interesting event of the week has been advice of the delivery next month of a shipment of fowl wheat at 2d a bushel cheaper. Barley and pollard have recorded advances and potatoes are easier for inferior lines, of which there is a majority because of disease to much of the crop. POTATOES Because of the infection of supplies by • rust, a large proportion of the potatoes coming on to the Auckland market are of inferior Quality. Best sorts are dearer at from Os to <fs Od a bag, ex store, but inforior lines are selling very cheaply, at from about 'Js (id to -Is (id a bag. Pukekohe supplies aro now almost finished, but there are stocks on the market from the Manawatu and there are plenty of supplies on hand to hold the market until the main body of Manawatu-grown potatoes arrives in about a fortnight. Autumn new potatoes are also almost ready, and when they come forward in about three weeks the market will be plentifully supplied. ONIONS The last of the stocks of Canadian onions being held by merchants aro now being cleaned out in expectation of the arrival 011 the market soon of local supplies. They are being disposed of at approximately lis to r_'s a bag. The quality is good. FOWL WHEAT Fowl wheat is selling very freely, although I stocks on hand aro not particularly largo, i A further shipment is due to arrive at Auckland on February 1. It is being offered at a reduction of 'Jd a bushel ex wharf, although (here is no indication whether this decrease is to bo permanent. MAIZE The market for maize is firm, both in Gisbotno and the Bay of Plenty. Inquiries are now being made in Java with the idea of bringing a shipment to New Zealand as the result of the Government's decision to allow imports after April 'JO. Indications, however, are that prices will probably be a little higher. BARLEY Prices for barley remain much about the same. Because of tho continuous rise in price in Australia, however, deliveries from February to June are expected to be about 2d a bushel in advance of current rates. OATS AND CHAFF Prices for outs and chaff on the Auckland market are unaltered, with a good firm demand keeping them stendy. Ihe rate for oats is about -is ltd to -Is lld a bushel. Chaff is selling at from £lO "»s to £lO 10s 11 to "' BRAN AND POLLARD With continued rises in price for pollard in Australia imported stocks will be coming forward at about 5s a ton dearer. Ample supplies of local bran are available at unaltered rates, prices being about £7 a ton. PUKEKOHE PRODUCE POTATOES AND OX lONS CHEAPER [from our own correspondent] PUKEKOHE, Monday With the demand weakening, Pukekohe potatoes have fallen in value from lis Oil to 10s per cwt. f.o.r. Pukekohe since lust Monday. Most districts throughout New Zealand now have ample locally-grown supplies, and there has been a heavy reduction in the orders received at Pukekohe. Pukekohe onions have fallen 2s per cwt. in value since last Monday, to-day's price being 8s f.o.r. Pukekohe. Excellent harvesting weather is at present being experienced and the work of gathering in the onion crops is well under way. Some inquiry has been received in the last few days for onions for export. Cabbages are quoted to-dny at 5s a sack, carrots and green peasant is 6d a sugar bag. French beans at 6s a sugarbag, large marrows at 5s a dozen, rhubarb at 3s 6d a, dozen bundles, Red Warren pumpkins at 8s 6d per cwt., lettuce at 7s a case, and tomatoes at 5s 6d a case. In fruit, plums are selling at 5s a case and Gravenstein cooking apples at 7s 6d,