Best in Three Years

For the nation's steelmakers it was the best week in years. Output was up to a scheduled 2,212,000 net tons (from 2,056,000 the week before and 1,459,000 a year ago), and orders were piling in so fast that many companies had to start allocating steel and reopen marginal facilities. U.S. Steel's Chairman Roger Blough reported that orders were being received at a faster rate than at any time in 1958, as Big Steel fired up seven of 14 open-hearth furnaces idled at its Pennsylvania Homestead Works last March. Equally cheering, Blough told stockholders that the company earned $90,728,989 or $1.57 a share in the fourth quarter, topping the $90,096,731 or $1.56 a share it netted a year earlier. Youngstown Sheet and Tube Co. relit a Chicago blast furnace and two East Chicago coke batteries it shut down in October 1957.

Nowhere was the steel news brighter than at Bethlehem Steel Corp. President Arthur B. Homer of the nation's No. 2 producer (after U.S. Steel) disclosed that on top of earning $57,678,360 or $1.24 a share in the closing quarter of 1958, the second highest fourth-quarter profit in its history, the company was operating at 80% of enlarged 1959 capacity and planning to go to 85% next quarter. Said Homer: "We've been having quite an upsurge in orders. It looks as if January bookings will be the highest for any month in the last three, and possibly four years."

Bethlehem has dropped its plan to merge with Youngstown Sheet and Tube because of the trustbusters' opposition (TIME, Dec. 1). But it still hopes to compete harder in the Midwest market, possibly by building a plant on its 3,500-acre tract near Gary, Ind.

The strong upturn in steel was in answer to rising consumption, plus a rush to build inventories as a hedge against a steel strike this summer. The three-year contract with the A.F.L.-C.I.O. United Steelworkers runs out July 1, and the steel union has already done some tough talking about the big pay package--estimated at $1 billion a year in wage increases and benefits--it expects to demand. Most steelmen, along with their customers, expect a strike. The automakers, trying to lay in enough steel for their 1959 models and part of their 1960 production, guaranteed their suppliers against loss if they in turn would buy ahead. But many a steel user who had let his inventories get close to bottom was discovering that it was hard to rebuild them enough for strike protection. Allowing for the probable rise in consumption, the maximum buildup in inventories by midyear was expected to be only about 6,000,000 tons, just about what would normally be needed for current needs at that time.

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