How Goes Steel?

For the world's biggest steelmaker, the blast furnaces never blazed higher. In the first three months of 1956, U.S. Steel Board Chairman Roger M. Blough reported sales of $1.1 billion, a record for any quarter, while earnings of $104 million, up $32 million, touched off a first-quarter peak. But with the expanding good times came an issue for hot debate in the industry: should steel prices be boosted in 1956? As far as Big Steel's Chairman Blough, whose company is the industry's traditional price-setter, was concerned, the answer was no. Though heavy wage demands by the United Steelworkers may force U.S. Steel to change its mind, current business was good enough to carry much of its 2,500,000-ton expansion program without jacking prices higher now. Said Blough: The company "contemplates no general advance in prices of its steel mill products at this time."

Chairman Blough's words were echoed by Bethlehem Steel's Chairman Eugene G. Grace, whose company was also driving to new heights: record first-quarter sales of nearly $600 million, $148 million higher than 1955. Grace said that his company would also make no price moves until the summer bargaining session was over, though "any increase in the cost of producing steel should be recaptured through the price route."

Most steelmen saw reason to think that 1956 would live up to its first-quarter promise. Though auto production, already down, slipped another notch to 129,048 cars last week, orders from other big steel users (notably railroads and the construction industry) have boosted U.S. Steel's backlog to 7,500,000 tons v. 6,300,000 tons at this time last year. Looking at the flood of orders, U.S. Steel's Blough thinks many customers are buying to build up inventories in fear of a steel strike this summer. But Bethlehem's Grace is equally certain that in the expanding U.S. economy, steel is being used as fast as the mills can turn it out.

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