New Peak in Steel?

By day and by night, over the nation's great steel centers from Sparrow's Point to Fontana, the belching smoke and cherry glow of the furnaces made dramatic testimony to steel's comeback. The order books were filled for months ahead, and the mills were pouring at near-record rates. The figure last week: 86% of the industry's newly expanded capacity, 2,439,000 actual tons and a volume within hollering distance of the 2,525,000-ton alltime peak set in December 1956. As customers hurried to build up depleted inventories and hedge against the threat of a strike or higher prices in July, some mills even began to ration short products on an informal basis. Steelmen expect the big demand to run through the second quarter at least, make it the biggest in steel's history.

The industry still had some slack left, but it was not enough to feel really comfortable, and steelmen were thinking of expanding once again. National Steel Corp. Chairman George Magoffm Humphrey and President Thomas E. Millsop announced that they will build the industry's biggest new finishing plant since U.S. Steel Corp. put up the $500 million Fairless Works (TIME, Dec. 22, 1952).

Costing at least $150 million, the 2,200-man plant will rise on 750 acres of sand dunes along Indiana's Lake Michigan shore, will wedge National into the big-league Chicago market. It will process steel from National's Great Lakes Steel Corp. in Detroit, where National will add 500,000 tons of capacity, boost its total to 7,500,000 tons, only 500,000 tons behind fourth-ranking Jones & Laughlin. Counting further expansion at Steubenville, Ohio and Weirton, W. Va., National will spend $300 million through 1961.

The jump in steel came largely from the pickup in autos. Sales of 128,000 new cars in February's first ten days rode ahead of the year-ago pace, and production last week climbed 36% above a year ago. The continuing production pickup pushed freight carloadings more than 6% above last year's level, the fifth straight weekly rise. Total industrial production in January moved up for the ninth straight month to 143% of the 1947-49 average, just four points below the all time peak of December 1956. Personal income was also up by $2.4 billion to a record $362.3 billion, and spurred buying. In mid-February, department stores rang up 8% more sales than last year.

Despite the rising demand, the consumer price index inched up only one-tenth of 1% in January, to 123.8% of the 1947-49 average, still below the peaks of last July and November. The price index has ridden on a plateau for the past nine months, the longest period of price stability since the U.S. started to compile monthly figures in 1935.

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