Prospzct pms L681
The Annual Report of the Iron and Steel Boo-d for 1962, which was publishod on August lst paints a gloomy picture of the state of the industry. Reviewing the industry's overall position, the Board commonts that 1962 was not expected to be a good year for steel, and th wovival in demand which wes hoped for in the latter part of the yoar never natlalised, Operations during tho yoar ranged from 87% of capacity in the wide strip mills down to 68% in the plate mills and onky 62% in the mills producing other constructional steol,
The report deplores the waste of resources invOlved in the great expansion of tho British steel industry in advance of demand. Heavy cepital expenditure on new plant was undertalken in the beliof that in the pericd 1960-65 the national { economy would expand at an average rate of 3.2% per anmm, The actual growth has ’ in practice bsen much amaller than that, The Board is naturally anxious to stress that the growth assumptions were made after full consultation with Government departments, It is vitally interested in the success of the new "4%" growth policy which would help to ameliorate the undercapacity working,
The going will not be easy even then, As ths Board puts it, “the prospects of the industry at present depend principally on a revival of the home market which would result from a sustained expansion in the economy and the associated recovery in business investment." It points out that business investments in fized assets is tho main source of demand for heavy steel products, But the biggest steel consumers in the capital investment field are shipbuilding, co®lmining and railways. The decline in their steel purchasas would not necessarily be reversed if there was a general reviv al in industrial capital expenditure,
Moreover, the steel industry itself has been a large buyer of its own producta for the expansion and modernisation of its mills, as well as the corresponding raw material, shipping and handling facilities, The Board says that the steel industry's capital expenditure has fallen off from a peak of nearly £200 millions in | 1961 to just over £170 million last year, Outlay is likely to go on falling steeply. In 1962 the Board was asked to approve new projects at a total cost of only £8 millions against £78 millions in 1961 and £223 millions in 1960.
di study of future demand made in connection with the imiustrial plana of MEDC has shown that "the estimated demand for steel in 1966 can be met without any major additions to plant capacity beyond those approved and in the main already implemented," Estimates of demand for iron and steol after 1965 show that little additional investment apart from normal modernisation would be required up to 1966. This is valid even on the assumption that national production is speeded up from now on to an annual rate of 4%, ay 2
If that rate of growth is not achieved the steel capacity already baing provi- ~ ded would not be adequately employed for yoarse to come, With capital outlay in steol in loneterm decline and little hope of increased spending in shipbuilding, coalmining and railways, it is not easy to see how and when the steel industry can achieve full employment again. It is a grim prospect, and it is not made any brighter by the fact that modern steal capacity is standing idle both in the United States and in Europe while now plants ara still coming into production,
based on a Guardian article