Knocking on Wood

As they gaze around their gleaming, steel-furnished executive offices, U.S.

steelmen may well be looking for some wood to knock on. With only a little bit of luck, they have a chance to make 1966 their third straight year of rec ord production.

This is so despite the fact that autos, which used up 21.7% of steel production in 1965, have not been selling as well so far this year. It once was a truism that what was good for Detroit was vital for steel, and vice versa. This year's performance seems to indicate that steel, while still dependent on Detroit, can do very well even during a downturn in auto sales.

First-half estimates of steel production run to about 69,000,000 tons, as against 71,000,000 during the same period last year, when buyers were ordering and storing up in anticipation of a nationwide steel strike. Forecasts for the second half of this year are so optimistic as to raise possible total production to 134,000,000 tons, as against 131,462,000 in 1965.

The reasons are several. Competition from abroad has eased, as U.S. steelmakers have improved their production techniques. Other steel consumers have moved in where autos used to reign. Example: Railroads plan to build 90,-000 new freight cars this year, against about 65,000 in 1965. In smaller measure, the steel industry is benefiting from an all-out drive to use its products as substitutes for copper, in everything from plumbing to refrigerator tubing. Reason: copper prices have been driven sky-high by copper-rich countries, such as Chile and Zambia, cashing in on a world shortage.

What would absolutely assure another record-breaking year, steelmen realize, would be a bigger buy by their old ally, Detroit. And steel orders for new production models, which go on the line in August, are just beginning to come in.

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