Evening star., 1941-06-11
O. p. N. Order Places
Extra Problems ON
Steel Industry
Plants Scramble for
Defense Work, Customers
Hunt Substitutes
BY the Associated Press.

BY tne Associated Press,
NEW YORK, June 11.-Iron Age
said today two significant develop
ments have followed the o. P. M s
steel preference order of May %:
% A scramble among manufac-
turers TO obtain defense work; ~
The redesigning of some consumer
products so that plastics and other
materials can be substituted for
steel.
The publication review noted q
sharp curtailment of steel ship
mentS to non-defense distributors
and users as result of steel
preference action.
Problems Increased.
The steel industry's distribution
problem. it continued, has not
been solved, but in fact has teen
more seriously complicated by the
preference order.
Whatever steel is left after
priority orders are satisfied can be
distributed among each company S
regular customers. but as the total
amount thus remaining is not going
to be sufficient to supply all COM
mercial requirements, the problem
of dividing up such tonnage is ore
which admits of no satisfactory
solution. Shipments of steel to nLn-
defense consumers are now estl-
mated to be less than consumption,
with the result that inventories are
being reduced and curtailment OF
some manufacturing operations will
inevitably result.
Expansion Planned.
The recommendation of the Office
of Production Management for an
increase of 10000 900 tons in the an
nual capacity of the steel industry
was a surprising development In the
light of the Gano Dunn report that
such an expansion would require A.
10000 tons of ingots and take two
years to complete However pre-
liminary plans have been worked
out for such an expansion. Prob
ably not more than five or six COM
panies will participate in the pro-
gram. the tentative allotment of
capacity additions being as follows
United States Steel Corp. 5000. 900:
Bethlehem Steel Co, 100000 tons
Republic Steel Corp, 100000 tons.
the remainder to be divided among
the Jones e. Laughlin Steel Corp.
the National Steel Corp. and the
American Rolling Mill Co. About 95
open hearth furnaces and from II
to 20 new blast furnaces would be
required. Additions to the Great
Lakes ore feet would also be part
of the program.
Steps have been taken by the
o. P. M. toward the alteration of
continuous sheet-Strip mills so that
they can produce wider and thicker
plates for ships and railroad equip
ment Freight cars now on order
will require about 1.400 600 tons of
steel over the remainder of the year
and further additions to car orders
are in prospect, particularly tank
cars to relieve the oil transporta-
ton problem. Orders placed in the
past week totaled 1925 freight cars
and 80 locomotives. with inquiries
for $500 cars pending.
Scrap Shortage Grows.
"Complicating the steel supply
situation is the growing shortage
of scrap. An Eastern mill may be
forced to shut down some open
hearths this week unless its supply
Is augmented. Meanwhile the Treas
ury Department will soon allocate
orders for 100000 tons of scrap to
be shipped to Great Britain, also
orders for 100000 tons of steel
and 100000 tons of pig iron.
Ceiling prices for pig iron may
be announced shortly by the Office
of Price Administration and Civilian
Supply. There is a growing shortage
Of pig iron despite high production.
Scrap composite is unchanged
at sl9.17."