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MONTHLY QcuiimM et/ieuJ IN THIS ISSUE F E D E R A L RE S E R V E BANK of C LE V E LA N I Regional Expansion in Steel Capacity flc c n e Current Trends in Farm Prices J 9 5 4 . . . . Better Jets Through Ceramic Materials S TEEL INGOT CAPACITY OTHEi U.S. ..... \ GO Fourth District steel capacity has been expanded in recent years, but not as rapidly as capacity outside the District. Consequently the Dis trict's share of the steel market is 20 declining. I See page 21 I 1948 1951 1952 1953 1954 DISTRICT SHARE OF TOTAL CAPACITY . 2 5 12 Regional Expansion in Steel Capacity he n a t i o n ’s steel in d u s t r y has ex in the Fourth District from 1948 through panded its ingot-making capacity 32 per 1953 is due to the small percentage gains in cent since the end of 1947, with the bulk ofcapacity made in the Pittsburgh and Youngs the new or improved facilities coming into town producing areas, where nearly twoproduction during the last three years. Steel thirds of the Fourth District’s steel capacity mills located in the Fourth Federal Reserve is concentrated. During the last six years, District participated in the industry’s expan the capacity of these two areas was increased sion, but not to the same extent as mills out from 33.5 to 36.9 million net tons or only 10 per cent, while the industry elsewhere boosted side the District. Fourth District steel areas, as defined by Iron Age, include Pittsburgh, its production potential 44 percent. With the sole exception of the small Eastern dis Youngstown, Cleveland, the South Ohio trict (New England and eastern New York) River area, and Wheeling. every other steel district increased capacity The proportion of the country’s basic by more than 30 percent. steel-producing facilities located in this Dis trict, in the aggregate, has shrunk from 45.0 The Pittsburgh-Youngstown area is re percent to 40.6 percent during the past six garded by some authorities as a single pro years. Such a shrinkage highlights a trend ducing center. Taken together, the two areas towards greater geographic dispersion of contain nearly 30 percent of the nation’s steel steel furnaces that may continue for the next capacity and comprise the largest concentra few years. tion of steel furnaces in the country. If The relatively low rate of steel expansion Pittsburgh and Youngstown are considered as separate steel-producing areas, they rank second and fourth, respectively, among the LOCATION OF STEEL-MAKING FURNACES IN THE FOURTH DISTRICT country’s thirteen steel districts as delineated by Iron Age. Pittsburgh, traditionally the nation’s top producing center, yielded first place to Chicago in 1953, while Youngstown lost the third-ranking spot to Philadelphia during 1952. :v e i a n o Changes at plants in other Fourth District •F A R R E LL LORAIN WARREN* steel areas during the six years 1948 through YOUNGSTOWN *®S .b u t le r . VCANTON • a l i q u i p p a 1953 ranged from the abandonment of some MANSFIE*LD MASSILLON r PITTSI W E IR T O N -jl facilities to the threefold expansion of others. S TEU B EN V ILLE */ DONORA The biggest percentage increases were made in the South Ohio River steel district where •M ID D LETO W N capacity was expanded nearly two-thirds since 1948. Capacity additions exceeded 70 [WPORT PORTSMOUTH, percent at mills in Portsmouth, Middletown and Newport. Two new mills were built in ASMLAND*i*HUNTtNGTON the same general steel area — one at Owens boro, Kentucky, and one at Huntington, West Virginia; both of the latter happen to fall outside the Fourth District. In the Cleveland producing district (which includes Lorain) individual mill gains ranged from 26 percent to 72 percent, averaging 48 T 2 REGIONAL CHANGES IN STEEL CAPACITY: 1948-1953 (Capacity figures in thousands of net tons as of January 1st) Ir o n A g e STEEL CAPACITY NET INCREASE 1 9 4 8 -1 9 5 3 PERCENTAGE OF TOTAL RANK District 1954 1948 Tons Pet 1954 1948 1954 1948 1 6 12 2 10 12 C H IC A G O ........................ DETROIT............................ ST. LOUIS........................ 2 4 ,5 8 7 6,551 2 ,785 18,856 3,473 1,674 5,731 3,078 1,111 30.4 88.6 66.4 19.8 5.3 2.2 20.0 3.7 1.8 Subtotal....................... 33,923 24 ,0 0 3 9 ,9 2 0 41.3 27.3 25.5 PITTSBURGH.................... Y O U N G S T O W N ............. CLEVELAND...................... SOUTH O H IO RIVER.. . WHEELING....................... 2 3 ,0 1 6 13,896 6,241 4,875 4,8 6 6 2 0 ,8 2 9 12,644 4,2 2 4 2,933 3,4 9 5 2 ,1 8 7 1,252 2 ,0 1 7 1,942 1,371 10.5 9.9 47.8 66.2 39.2 18.5 11.2 5.0 3.9 3.9 22.1 13.4 4.5 3.1 3.7 2 4 8 10 11 1 3 7 11 9 5 2 ,8 9 4 4 4 ,1 2 5 8,7 6 9 19.9 42 .5 4 6.8 •• .. PHILADELPHIA................. BUFFALO.......................... EASTERN........................... 16,386 6,452 733 11,505 4 ,423 6 34 4,881 2 ,0 2 9 99 4 2.4 4 5 .9 15.6 13.2 5.2 0.6 12.2 4 .7 0.7 3 7 13 4 6 13 Subtotal........................ 23,571 16,562 7 ,0 0 9 42.3 19.0 17.6 Total N. E. States............ 110,388 8 4 ,6 9 0 2 5 ,6 9 8 30.3 88.8 89.9 WESTERN......................... SOUTHERN....................... 8,883 5 ,0 6 0 5 ,7 0 6 3 ,8 3 7 3 ,1 1 7 1,223 5 5 .7 3 1.9 7.1 4.1 6.1 4.1 5 9 5 8 TOTAL U. S..................... 124,330 9 4 ,2 3 3 3 0 ,0 9 7 31.9 100.0 100.0 FOURTH DISTRICT.. 50 ,5 3 8 4 2 ,4 3 5 8,103 19.1 40.6 4 5.0 •• ♦• OTHER U. S..................... 7 3 ,7 9 2 5 1 ,7 9 9 2 1 ,9 9 4 4 2.5 59.4 5 5.0 Subtotal............ .. American Iron and Steel Institute data. Compilations by Iron Age and Federal Reserve Bank of Cleveland. Details may not add to totals because of rounding. The subtotal for the Iron Age districts of Pittsburgh, Youngstown, Cleveland, South Ohio River and Wheel ing differs from the Fourth District total because: (1) several plants included in the Pittsburgh and South Ohio River districts are not in the Fourth District; and (2) several Erie, Pa. plants, which are located in the Fourth District, are included with the Buffalo district. 3 percent for the three companies in the area. Percentage gains in capacity in both the South Ohio River and Cleveland districts thus exceeded the 44 percent average increase posted by all U. S. mills outside the Pitts burgh-Youngstown area. The increase in the Wheeling area aver aged 36 percent, with a Steubenville mill nearly doubling its capacity. Other plants in the area are located at Weirton and Toronto. Geographic changes in the location of steel capacity that have occurred in the last six years are given in an adjoining table. The regional compilations were made by Iron Age from the comprehensive reports of American Iron and Steel Institute. As the table suggests, the Iron Age districts of Pitts burgh, Youngstown, Cleveland, South Ohio River and Wheeling are almost identical with the Fourth District. As might be expected, most of the new or expanded steel facilities added since 1947 have been located in the nation’s “ industrial belt,” which may be defined roughly as the states east of the Mississippi River and north of the Ohio River and Mason-Dixon line. The geographic relocation of steel furnaces in recent years has been largely a shift to the east and west of the Fourth District within the limits of this “ industrial belt.” The Fourth District “ lost” capacity mainly to the Chicago, Detroit and St. Louis steel districts on the west and to the Philadelphia and Buffalo steel districts on the east. The Western district increased its share of the U. S. total from 6 to 7 percent during this interval, while that of the Southern district remained unchanged at 4 percent. Factors in Location There are several reasons for the location of most of the new and improved furnaces outside the Pittsburgh and Youngstown areas. First, these two districts have traditionally been surplus production areas. Rising freight rates have made the proximity to metal fabricating markets an important factor in determining the location of expansion pro 4 grams. Economies in transport costs dictated locations in, or nearer to, areas of production deficits. This helps account for the large additions to capacity in the Chicago and Detroit districts, since both areas have long been ones of production deficits. A second factor is the age of furnaces in the Pittsburgh and Youngstown areas. The steel industry, as we know it today, traces its beginnings to this area as the historic meeting place of iron ore and coal. It would be only natural to find that the area has a higher proportion of older furnaces than newer steel-making centers. Since 1948, the retirement of tired facilities has served to offset, somewhat, improvements and addi tions. In the Pittsburgh area, for example, one major steel company has retired 1.8 million tons of old capacity since the end of World War II, while adding 3.7 million tons of new capacity. During 1953, the scrapping of old furnaces in the Pittsburgh district more than offset expansion in the area, reducing the area’s annual capacity by more than 2 percent. Some of the abandoned furnaces were first fired in 1900. Further reductions will take place this fall, when other marginal high-cost facilities in the area are scheduled for retirement. Scrapping older furnaces results in operating economies and improves the area’s competitive position. A third factor that bears on the differen tial growth rates exhibited among the vari ous producing areas is the development of new sources of iron ore, notably in Venezuela and Canada. Two steel companies have developed properties in Venezuela. One com pany began shipments in 1951 after several years of development work and imported more than 2,000,000 tons of iron ore last year. First shipments from the other Vene zuelan mine were received at an Eastern port this January, with shipments for the current year expected to exceed 2,000,000 tons and to increase gradually for several years. An entirely new steel works was con structed on the Delaware River to use the output of the newest Venezuelan property. (Continued on Page 9) Current Trends In Farm Prices this year are estimated as about on a par a g r i c u l t u r e is a big enough with 1953 in tonnage. Contrasting situations, factor in today’s industrialized econ such as shortages of hogs and surpluses of omy to “ make or break prosperity” is still dairy products, again illustrate a wide vari debatable. The economic well-being of count ation among specific products. less towns and villages throughout the nation in 1954, however, will rest directly and un questionably upon the level of farm income. Milk To these may be added the large industries Milk prices in April (Ohio prices) were such as farm machinery, feed processing and the lowest at wholesale in four years and the fertilizer manufacture, as well as a host of lowest for any April since the end of World other nonfarm enterprises, whose sales are a War II. Despite evidence of a prolonged direct function of farmers’ ability to buy. cost-price squeeze, however, milk production It is reassuring in this respect both to farm throughout the nation during the first quar and to many nonfarm groups that farm ter of 1954 continued to expand, reaching a prices have held within a fairly narrow range record level about 5 percent above the yearof fluctuation since last spring. Such sta ago output. Even after allowance for popu bility has followed a precipitous price decline lation growth, milk production is the largest which extended over two years. Many prob since early in the postwar period. lems and an element of uncertainty still Continued high milk production without prevail, however, as farm production plans corresponding demand has brought the gov for 1954 are being pushed into action. ernment into prominence as a buyer of dairy products. Continued failure to adjust out put to market needs has forced a lowering of Farm Income support rates on dairy products from 90 per During the first four months of 1954, sales cent to 75 percent of parity as of April 1 of of farm products, nationally, totaled some this year. These support prices are indicated what short of $8i/2 billion—moderately below in a later table. a year ago. The net contribution to national Adjustment to the milk-price dilemma income continues short of $12y2 billion at an seems particularly difficult for dairymen. annual rate, as compared with an approxi mate $16 billion rate in early 1951 and a still Compared with recent years, prices are lower, higher rate in the early postwar years. marketings are steady to larger, Income has eased. Farm-product prices in the aggregate have IN DEX O NITEO STATES I9 3 5 - 3 9 ‘ <Q0 shown a strong tendency so far this year to level out very near to the year-ago position, although they have been decidedly lower than in the corresponding periods of 1951 CASH RECEIPTS and 1952. Prices received by farmers in April, for example, were less than one per cent below the comparable date of 1953. As 3 0 0 -' usual, any such aggregate measure fails to ^ -P R IC E S RECEIVED reveal the contrasts among individual com A > PHYSICAL — / “X volume OF” modity lines. jJ \m a r k e tin g s / I V- . Similar comments apply to the physical ------ 1 9 3 5 -3 9 A ve ra g e -----------volume of farm marketings. Farm products hauled to market during the first quarter of W h e th e r Milk prices and egg prices have dropped sharply this spring. Attempts to lower unit production costs usu ally yield an end product of higher aggre gate production, while basically the problem is already one of greater production than the market will take at prices favorable to the producer. In addition, the introduction of cost-cutting mechanization into the dairy operation frequently requires substantial sums in new capital investment — a difficult decision to make when net returns have been whittled away year after year. That dairymen are attempting to boost output per cow and per man is illustrated in the current rate of grain consumption per cow and the larger average size of herds. There are numerous indications, however, that much of this feed is going into “ extra” cows which are not paying their way, as con trasted with use of the feed in other livestock enterprises. Accurate accounting methods would probably reveal the slaughter-house as the most profitable current use for many dairy cows which would have returned a profit at the higher prices of a few years ago. Eggs Eggs, a popular supplementary enterprise on dairy farms, have also suffered from sharper than expected price drops so far into 1954. What at first appeared to be a seasonal drop “ just a bit more severe than 6 last year” failed to reverse on schedule in late winter. This is shown by the Ohio prices in the accompanying chart. Forecasts of the U. S. Department of Agriculture anticipate egg prices below a year ago until mid-year, although still high enough to provide ‘ ‘ favor able returns.” Large production is apparently responsi ble for the price weakness in eggs. Some in crease in production and lowering of price is normally expected during the late winter and early spring season. This year, however, impetus has been added to these seasonal movements by the greater number of layer hens on farms and a corresponding increase in the rate of lay per hen. A current increase in hatchery output is providing some further apprehension con cerning the egg price outlook for late this year. March hatchings of chicks in com mercial hatcheries topped last year by 12 percent and broke a monthly record of ten years standing. The margin over a year ago for the first four months of 1954 averaged about 11 percent. Most of the gain in number of hatchings has been in chicks for layingflock replacement. Hogs Hog price trends provide a sharp contrast to both milk and eggs as indicated in the charts. Reduced slaughter supplies of hogs this year have pushed prices up to and fre quently above the 1947 all-time highs for the comparable months. The spring seasonal price decline, which is quite pronounced in most years, was barely discemable in 1954. The currently light hog receipts are still a reflection of farmer adjustments to over production and a profitless output back in 1952. For the most part, the restricted supply of hogs has met with strong demand for over a year. Furthermore, profitable prices still seem assured for the light marketing months of the early summer. Numbers of pigs born this spring and to be marketed next fall have not as yet been determined. An official U. S. Department of Agriculture count of the spring pig crop will be released in late June. By all indications available, however, a substantial expansion has again occurred in the nation’s hog enter prises. Cattle Beef cattle have also experienced consider able recent price improvement. The winter and spring of this year marked the first pro longed price advance since early 1951. In Ohio, at any rate, April was the fifth con secutive month of price increase for the aver age of all types and grades of beef, as shown in the accompanying chart. It will be noted, however, that as of April, the 19 percent gain since last November has lifted prices only to a par with a year ago. Current beef cattle prices are still decidedly lower than the unusually prosperous 1947-52 period. The price series shown in the chart serves as a guide to the trend for beef cattle; how ever, it does not reflect satisfactorily the sell ing prices of specific grades. Finished cattle prices at Fourth District markets, for exam ple, are substantially improved from a year ago at $22 per hundredweight for the goodchoice grades. Conversely, beef cows and light cattle have shown some improvement from late last year, but prices of these grades still appeared weak during the opening months of 1954 by comparison with a year ago. Beef cattle fall gradesI still undersell hogs; both have shown substantial recent price advances. Current cattle supplies likewise show sub stantial variations by grades. Heavy liqui dation of steers last year, and the slightly reduced numbers in feedlots now, have con tributed to the improvement this spring in finished cattle prices. On the other hand, net increases in the 1953 cow and calf inventory are being reflected in the continued weak ness of cow and light-cattle prices as out lined above. Western range conditions are a critical element in the cattle picture this year. De spite recent rains, drought again poses a threat which could force heavy liquidation and consequent further disruption of markets. Even with something akin to normal weather, there are indications that the long predicted downturn in cattle numbers will begin to materialize by the year’s end. “ Heifer slaughter” last year was in excess of numbers actually reaching this state of growth, and thus limited the extent to which discarded beef cows might be replaced. Crops So far in 1954, of the crops most promi nent in Fourth District agriculture, soybeans alone have been traded freely at a price which is well above support levels and which has been determined independently of gov ernment support activity. A shorter than expected crop last year (due to drought) coupled with strong domestic and foreign demand have boosted prices to levels seldom before enjoyed by farmers. April prices aver aged $3.57 per bushel in Ohio — a 26 per cent increase from the year before. Wheat and corn, unlike soybeans, are heavily indebted to the price-support pro gram for their current price position. Both of these crops showed substantial seasonal price declines last summer and fall, but have since recovered nearly all of the losses. April prices in both instances were within a few cents of year-ago levels. Wheat stocks on the July 1 close of the current marketing year are expected to total about 875 million bushels — well over a third above the previous record high inventory of 7 1942. A carryover of this magnitude would be somewhat in excess of a full year’s export and domestic consumption needs at 1953 rates of use. Furthermore, it is expected by the U. S. Department of Agriculture that almost all of this carryover of wheat will be held in Commodity Credit Corporation in ventories or under reseal programs. Besides a high rate of production, the growing wheat glut is complicated during 1953-1954 by the lowest disappearance rate since the early years of "World War II. This weakness stems primarily from the loss of export demand. Corn inventories on April 1, nearly six months before a new harvest, were more than 10 percent greater than a year ago. An esti mated two-fifths of these stocks were under price-support loan and purchase agreements; however, most of the price-support stocks were inventories of grain acquired prior to the 1953 crop. Substantial quantities of the old inventories have recently been offered for sale at a reduced price. At the close of the current crop year on October 1, a corn inventory of 900 million bushels is considered plausible by the U. S. Department of Agriculture. These stocks, about one-sixth larger than last October 1, would nearly all be under loan or owned by the Commodity Credit Corporation. Corn and wheat prices are near early 7953 posi tions, bat soybean prices have soared to new heights. O H IO PRICES Do lia r s p e r bushel 8 Among the other crops important to the Fourth District are oats, the prices of which have held stable throughout the winter and spring. Current selling prices are within a penny or so per bushel of last year’s quo tations. Selling prices of hurley tobacco for the auction season which ended in February were at a record high. Price support levels for major district crops are indicated in the following table. U. S. Average Support Prices Price 1954 1953 . $2.20* . 1.62* . 2.22 .46* . 1.15 .75 Mfg. milk, cw t.......... . 3.14 .56 Butterfat, lb .............. .32 Cheddar cheese, l b ... Nonfat dry milk .15 solids (spray), l b . . Wheat, b u .................. Corn, b u ..................... Soybeans, b u ............. Burley tobacco, lb . . . Barley, b u .................. $2.21 1.60 2.56 .47 1.24 .80 3.74 .67 .37 .16 % of Parity 1954 1953 90% 90 80 90 85 85 75 75 75 90% 90 90 90 85 85 90 90 90 75 90 ^Minimum forward price, may be increased as market ing season approaches. Source of data: Commodity Credit Corporation. Crop Plantings In view of decided surpluses of wheat and corn, the Department of Agriculture has announced production controls on 1954 crops as a prerequisite to price-support aid. Also, marketing quotas were declared for wheat so as to place a penalty upon excess plant ings. The actual cut in seeded wheat acreage will amount to an estimated 19 percent. For com, no clear indication was given by the March 1 planting-intentions report. Allotments had called for a 17 percent smaller acreage, but farmer plans at that time were for practically no change. The assignment of allotments to individual farms since March 1 is expected to cause some sig nificant acreage reduction in corn. Due to the limited incentives afforded by the support program to farmers who feed rather than sell most of their corn, however, it is doubt ful whether corn plantings will be cut as drastically as the allotment program suggests. An expansion in acreages of soybeans, oats and barley was indicated by the March 1 planting intentions report. Much of the in crease for these crops has been on acreages diverted from wheat. A perplexing problem faced by crop farm ers generally is how to divert acres from crops in surplus without creating new market gluts for other products. Larger acreages of grass appear prominent in this respect, as a widely recommended opportunity. EXPANSION IN STEEL should be taken of the strides made in the processing of lower-grade domestic ores. On the Upper Lakes, large reduction mills are under construction to process low-grade taconite into high-grade concentrates. The 1954 ore shipping season on the Great Lakes was opened by a boat carrying 18,000 tons of taconite pellets. It was the first large ship ment of concentrates to come down the lakes. The pellets, processed during the winter at Babbit, Minnesota, were destined for blast furnaces in Middletown. Also on the Upper Lakes, a new mine is being developed in the Steep Rock area of Ontario. Thus, it would appear that there will continue to be an abundant supply of iron ore available to steel mills in the Lower Lakes area for many years to come. (Continued from Page 4) Canadian Ores Although eastern mills will be the main recipients of Venezuelan ores, steel mills on the Lower Lakes will use most of the high and medium grade ores from the new Labra dor field. Some Labrador ore will begin mov ing to East Coast ports later this summer and shipments to Lake Erie ports will start in 1955. The iron ore will be moved the first 360 miles over a new railroad built to link the Labrador field with Seven Islands on the St. Lawrence River. Large ocean-going carriers will then take the ore upriver to Montreal, where it will be transshipped to a fleet of 40 to 50 small lake freighters that can navigate the present locks and canal system. Completion of the St. Lawrence Sea way will enable the large ore carriers to make the complete 1,100-mile trip from Seven Islands to the Lower Lakes. Large deposits of medium and lower grade ores have also been discovered in the Ungava Bay region of northern Quebec. Although easily accessible — the deposits have been described as being located practically on the shoreline with no overburden to remove — the nearest markets are in Europe. Opening the St. Lawrence River to large ocean-going freighters may make the Quebec ores com petitive with Lake Superior and Labrador ores at Lower Lakes ports. In addition to the recent and prospective developments in Canadian ores, account Types of Furnaces Another facet of the steel industry’s recent expansion program is the changes that have occurred since 1947 in the three major kinds of steel-making furnaces — open hearth, Bes semer and electric. In the last six years, electric-furnace capacity was nearly doubled, open-hearth capacity about equaled the na tional rate of increase, but rated Bessemer capacity was contracted, thus continuing a trend that has persisted since the turn of the century. In the Fourth District, per centage gains in open-hearth and electricfurnace capacity were about half that of the rest of the country while, contrary to the national trend, Bessemer capacity was ex panded. At the beginning of 1948, electric furnaces 9 comprised 5.7 percent of the nation’s steel capacity, on a tonnage basis, as against 8.4 percent (or 10.4 million net tons) this year. Although still a relatively small proportion of the total, electric furnaces have shown the most rapid growth in the postwar period, expanding 94 percent in the last six years. The reasons are not hard to find. Electric furnaces can produce most known grades of steel, although they excel in the production of stainless and special alloy steels. Not only has the demand for these special steels skyrocketed, but, assuming location in a favorable scrap-producing area with low power rates, the electric furnace can produce carbon steels at costs comparable with, or sometimes even below, that of openhearth steel. With the increased emphasis being placed upon furnace location nearer to steel-consum ing markets, this factor, along with the electric furnace’s advantages in producing alloy steels, has stimulated its development. It is not surprising, then, to find that electricfurnace capacity in the Fourth District in creased only about half as rapidly during the last six years as that of the rest of the country. The open hearth remains the dominant furnace, however, accounting for about 88 percent of all steel ingot capacity in the United States. Nearly 85 percent of the capacity added in the country since 1947, or 25.5 million net tons, has been in openhearth furnaces. The open hearth has several major ad vantages over the other two types of fur naces. First, the ratio of scrap to pig iron may be varied over wide limits in charging the open hearth, whereas electric furnaces STEEL CAPACITY BY TYPE OF FURNACE (Capacity figures in thousands of net tons as of January 1st) CAPACITY NET INCREASE 1 9 4 8 -1 9 5 3 Area and Furnace PERCENTAGE OF TOTAL 1954 1948 Tons Pet 1954 1948 TOTAL U. S............................ 124,330 94 ,2 3 3 3 0 ,0 9 7 31.9 100.0 100.0 Open Hearth..................... Bessemer............................. Electric................................. 109,095 4 ,7 8 7 10,449 83,611 5 ,2 2 6 5 ,3 9 7 25 ,4 8 4 — 439 5,052 30.5 — 8.4 93.6 8 7.7 3.9 8.4 88.7 5.5 5.7 FOURTH DISTRICT................ 5 0 ,5 3 8 4 2 ,4 3 5 8,103 19.1 100.0 100.0 4 2 ,3 5 3 3,951 4 ,234 3 5 ,8 4 7 3 ,824 2 ,7 6 4 6,5 0 6 127 1,470 18.2 3.3 53.2 83.8 7.8 8.4 84.5 9.0 6.5 OTHER U. S........................... 73 ,7 9 2 5 1 ,7 9 9 2 1 ,9 9 4 42.5 100.0 100.0 Open Hearth..................... Bessemer............................. Electric................................. 66,741 836 6,215 47 ,7 6 4 1,402 2,633 18,978 — 566 3,582 39.7 — 4 0.4 136.0 90.4 1.1 8.4 92.2 2.7 5.1 Compiled from reports of American Iron and Steel Institute. Details may not add to totals because of rounding. 10 use practically all scrap and Bessemer con verters require about 95 percent pig iron. Since from 25 to 30 percent of the ingots produced in a mill are reduced to scrap in the finishing operations, the ability to use this scrap is important. Secondly, open hearths can be built much larger than either the electric furnaces or Bessemer converters. The open hearth’s ability to produce large quantities of steel under easily controlled conditions and to take advantage of relative changes in the cost of scrap and pig iron by varying their ratio in the furnace charge have made the open hearth the dominant process in the steel industry. One major point of difference between Fourth District and other U. S. mills during the 1948-1953 period has been the expansion of Bessemer capacity in the District and its contraction in the rest of the country, as previously noted. More than four-fifths of the nation’s rated Bessemer capacity is lo cated in the Fourth District. The figures on Bessemer capacity (shown in the adjoining table) are somewhat misleading, however, since they do not show the country’s po tential Bessemer capacity. About a third of the Bessemer converters in the country (10 out of 33) are used solely to provide blown metal for open hearth charges and their ton nage is not included in total capacity. The modem Bessemer shop is located near the open hearth furnaces to take advantage of the duplex process; e.g., using hot-blown metal from the converters as part of the pigiron charge for the open hearth. This speeds up considerably the open-hearth operation by shortening the time of the heat and lengthen ing the life of the open hearth. An open hearth, which averages 15 heats per week using scrap-pig or scrap-ore charges will average 40 heats using the duplex process. The process does not require much scrap, an advantage when scrap is scarce and costly. Bessemer steel is interchangeable with open hearth steel in many mill operations. The converter provides a quick, cheap means of converting pig iron into steel. Its main drawbacks are that it generates more scrap than it consumes and that the conversion occurs so quickly (a blow takes only 10 to 15 minutes) that it is difficult to control the chemical changes to obtain steels of varied chemical composition. Today, Bessemer steel is principally used for butt-welded and seam less pipe, wire, free-machining bars, flatrolled products and castings. 11 Better Jets Through Ceramic Materials By CLYDE WILLIAMS, President and Director, Battelle Memorial Institute t u r b o j e t e n g i n e , relatively unknown before World War II, now dominates the field o f highperformance military aviation, and is invading the field o f commercial transportation. The flight speeds and altitudes o f which turbojet-powered air craft are capable represent substantial advances above those for conventional reciprocating-engine aircraft. Jet fighters have reached speeds above 750 miles per hour, and a jet bomber has flown at an altitude above 63,000 feet. The first U. S. jet transport is scheduled to begin trial flights this fall. Jet propulsion has been compared, in principle, to the behavior o f a toy balloon. When a balloon is filled with air and the opening sealed, the balloon is inca pable o f motion unless it is propelled by some external force such as a gust o f wind. Open the seal, however, and the rush o f the compressed air out o f the opening sends the balloon zooming away in a direction opposite from that towards which the air is expelled. This is a homely illustration o f the principle that, for every action, there is an equal and opposite reaction. For practical application o f this principle in the turbojet power plant, it has been found that the air craft gas turbine must operate at a temperature o f about 1550 P. It is also known that turbine perform ance increases tremendously with increases in operat ing temperature. Therefore, to achieve higher speeds and better performance, aeronautical engineers are now seeking materials for the construction o f turbine parts that will withstand a temperature o f 2500 F. Their studies show that such materials would permit design for 60 per cent more thrust or jet power from an engine o f the same size and air-flow capacity; or, conversely, that present power output could be achieved with considerable reduction in aircraft size and weight. The search for better heat-resistant materials is proceeding in three principal directions. First, with out changes in engine design, efforts are being made to increase the safe operating temperature o f severely stressed turbine parts by 100 F, or up to 1650 F. This may be done by improving the properties o f presently used nickel- and cobalt-base alloys. Second, consider able research is in progress that may lead to coatings or other means o f protecting molybdenum against oxidation at elevated temperatures. When such pro tection is achieved, molybdenum may find use at temperatures up to 2000 F. This range is usually con sidered the maximum useful service temperature limit for known metals in adequate supply to meet massproduction needs. Third, ceramic materials and ceramic-metal combinations, or “ cermets,” are being T he Editor’s Note— While the views expressed on this page are not necessarily those of this bank, the Monthly Business Re view is pleased to make this space available for the discus sion of significant developments in industrial research. 12 extensively investigated for service at temperatures up to and beyond 1800 F. Although difficulties are still to be overcome, ceramic materials and cermets may eventually prove the best solution to realizing the maximum performance o f the turbojet power plant. Ceramic materials offer real promise because they have excellent corrosion resistance, and a wide variety o f them far exceed most metals and metal alloys in their ability to withstand very high temperatures. In one tabulation, seventy-seven different ceramic mate rials are listed with melting points ranging from 3000 F to 7500 F. Also an attractive feature o f many ceramic materials is their relative lightness, which minimizes centrifugal stress in parts rotating at high speed. Furthermore, ceramic materials are generally in much greater supply than metals and metal alloys now being used, or being considered for use in turbo jet applications. In common with some metals, although to a more pronounced degree, the main shortcoming o f ceramic materials is their brittleness. This may cause “ brittle fracture” under conditions o f severe stress. One approach to the use o f ceramic materials under such conditions is to fit the materials to meet the engineering requirements o f the present aircraft gas turbine. This is being done through the development o f ceramic-metal combinations. These attempt to combine the high-temperature and corrosion-resistance properties o f ceramic materials with the greater stress and shock resistance properties o f metals. Progress is well advanced on the development o f turbine blades made from combinations o f titanium carbide and such metals as nickel and cobalt. Many opportunities still exist for investigating combinations o f metals with oxides, carbides, nitrides, silicides, and other refractory ceramic materials. Another approach to the use o f ceramic materials in the turbojet engine is to explore the possibilities o f redesigning the turbine to reduce the severity o f stress concentrations and thermal shock to which ce ramic parts are subjected. Proper engineering design has already proven a major factor in the successful use o f ceramic materials as linings in the combustion chambers o f rocket motors. This experience, together with more knowledge about the conditions encountered in turbines and o f the mechanism o f brittle fracture o f ceramic materials, could play an important part in the development o f ceramic parts for use in the turbojet power plant. To evaluate and use ceramic materials, close cooper ation is required between industrial ceramists and gas turbine engineers. With this close cooperation today, ceramic parts might well be developed that will set the standards o f speed and performance for tomorrow’s aircraft power plants.
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