CAB129-45 — Page 29

29

Page 29

11657-Economic Survey-Galley 9

Steel

42. The output of steel ingots and castings rose from 15.55 million tons in 1949 to 16.29 million tons in 1950, thus exceeding the forecast of 15.75 to 16 million tons given in the Economic Survey for 1950. The figures are set out in Table 4. Imports of steel, approximately 454,000 tons, were about half the 1949 level. Deliveries of finished steel to the home market were about 10.2 million tons, though there are some indications that actual con- sumption may have been somewhat higher than this. Exports (including tinplate) rose from 1.7 million tons to 2.35 million tons. During the first half of the year home supplies were generally in balance with demand, except for sheet and tinplate, production of which cannot increase until new finishing capacity is completed; in these circumstances it was possible to abandon the allocation of general steel". In the second half of the year the position changed: demand hardened, and by the end of the year most order books were full up for months ahead.

66

43. Capacity for iron and steel making will increase in 1951, and it is estimated that 16.75 million tons of ingot steel could be produced if full supplies of raw materials were available. Unfortunately, however, supplies of raw materials (especially imported scrap and rich iron ore) are not likely to be adequate to keep capacity fully employed. It would accordingly be unwise to rely on a crude steel production of more than 16 to 16.25 million tons, and even this may prove to be an optimistic assumption unless the drive to recover home-produced scrap is pressed ahead with the utmost vigour. Further, imports of steel may fall below the 1950 level because of increased demand abroad. Considerable quantities of steel will begin to be required for the rearmament programme in 1951, and though these will not necessarily all be a net addition to demand, the total requirements of the home market will increase. It will therefore be necessary to reduce exports below the high rate achieved in 1950.

44. Difficulties may arise over the supply of special types of steel such as alloys. As for sheet and tinplate, the new mills at Margam and Trostre will start up in the second half of 1951 and are expected to produce some 130,000 tons of sheets and some 40,000 tons of tinplate this year. Un- fortunately, because of threatened limitations on crude steel production, the improvement in supplies of these products will probably be to some extent at the expense of production of other categories of finished steel.

Other Raw Materials

45. The industrial output of the United Kingdom is dependent upon the import of vast supplies of raw materials of every kind. Reductions or dis- turbances in the flow of world trade in these materials can imperil the entire economy. In the past five years the danger has been that we could not pay for the materials needed to support our rising output: today it is rather that the required supplies cannot be found.

46. Industrial demand for raw materials everywhere was already high and rising in the summer of 1950, and even before rearmament began consumption of a number of commodities was outstripping production. The world-wide rearmament drive has imposed heavy new demands, both for current arms production and for strategic and commercial stockpiling. This has greatly accentuated the shortages and has driven up the prices of many raw materials. One result has been a rapid extension of public controls over raw material exports by countries anxious to conserve indigenous supplies. Thus, in common with other countries, the United Kingdom is finding great difficulty in obtaining its requirements of a wide range of materials. The most dangerous shortages at the present time are of sulphur and sulphuric acid, zinc, and copper. Past consumption figures for these and other main materials are set out in Table 5.

47. The scarcity of sulphur is without doubt the most threatening of all. Sulphur and sulphuric acid are consumed either directly or indirectly in almost every industry in the United Kingdom. While the largest single consumers are the fertiliser and rayon industries, sulphuric acid is also vital to a great many important processes in the rubber, chemicals and metal industries. The United States produces about 95 per cent. of the world's natural sulphur (i.e. pure sulphur, as opposed to sulphur-bearing compounds such as pyrites and anhydrites) and provides almost the whole of the United Kingdom's imports. In 1950 this country consumed some 460,000 tons of natural sulphur, of which 105,000 tons were used directly in industry and 355,000 tons were used to manufacture sulphuric acid. The acid made in this way provided some 55 per cent. of our total requirements.

Page 29

Page 29

30