SURVEY OF THE SOVIET STEEL INDUSTRY MIDWAY IN THE SEVEN YEAR PLAN (1959-65)

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• Publication Date: August 1, 1962
• Content Type: REPORT

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CONFIDENTIAL
Economic Intelligence Report
N? 93
SURVEY OF THE SOVIET STEEL INDUSTRY
MIDWAY IN THE SEVEN YEAR PLAN (1959-65)
CIA/RR ER 62-27
August 1962
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
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CONFIDENTIAL
GROUP I
Excluded from avtometic
downsrading and
declassification
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CONFIDENTIAL
Economic Intelligence Report
SURVEY OF THE SOVIET STEEL INDUSTRY
MIDWAY IN THE SEVEN YEAR PLAN (1959-65)
CIA/RR ER 62-27
WARNING
This material contains information affecting
the National Defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Secs. 793 and 794, the trans-
mission or revelation of which in any manner
to an unauthorized person is prohibited by law.
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
CONFIDENTIAL
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FOREWORD
More than 3 years have elapsed since the Seven Year Plan (1959-65)
for the ferrous metals industry of the USSR was put into effect. Some
original objectives of the plan have been revised. The basic pattern
of development envisaged, however, remains essentially as outlined in
the original plan and can now be appraised in the light of results of
the experience of the first 3 years and the prospective trends in 1962.
The record to date not only provides a basis for evaluating the feasi-
bility of the Seven Year Plan for the industry but also gives implica-
tions of the current plan that extend well beyond 1965. The pattern of
principal technical developments underlying the program for 1959-65
provides a nucleus around which Soviet planners are formulating tenta-
tive plans for ferrous metallurgy during the next decade and beyond.
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CONTENTS
Summary and Conclusions
I. Introduction
II. Investment in New Capacity
Page
1
5
8
A. General 8
B. Iron Ore 9
C. Blast Furnaces 12
D. Steelmaking Facilities 13
E. Rolling and Finishing Capacity 17
F. Continuous Casting 21
III. Major Technical Advances 22
A. Auxiliary Fuels 22
B. Oxygen in Steelmaking 23
C. Automation and Mechanization 25
IV. Steel Mill Products 26
V. Foreign Trade 29
Appendix
Source References 35
Tables
1. Production of the Ferrous Metallurgical Industry in the
USSR, 1958-61 and Planned for 1959-62 and 1965 6
2. Production of Crude Steel in the USSR, the US, and NATO
Countries, 1958 and 1961 7
3. New Capacity for the Ferrous Metallurgical Industry in
the USSR, Commissioned 1952 - First Quarter 1962 and
Planned for 1959-65
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Page
4. Sources of Planned Increases in Production of Iron and
Steel in the USSR, 1959-65
5. Selected Types of Rolling Mills in Operation in the
USSR, 1 January 1959 and Planned for 1 January 1966 18
6. Production of Selected Steel Mill Products in the USSR,
1958-61 and Planned for 1965 27
7. Estimated Exports and Imports of Raw Materials and
Products of the Ferrous Metallurgical Industry by the
USSR, 1955-60
8. Exports and Imports of Steel Mill Products by the USSR,
by Geographic Area, 1955-60
9. Exports and Imports of Steel Mill Products by the USSR,
1955-60
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SURVEY OF THE SOVIET SfEEL INDUSTRY
MIDWAY IN THE SEVEN YEAR PLAN (1959-65)*
Summary and Conclusions
Production of steel in the USSR during 1959-61 exceeded the original
goals in the Seven Year Plan and (except for a slight shortfall in 1961)
the revised goals also. In 1961, 70.7 million metric tons** of crude
steel and 55.2 million tons of rolled steel were produced compared with
plan goals of 71.3 million tons and 55.3 million tons, respectively. Out-
put of crude steel in 1961 equaled 37 percent of that in NATO countries
and almost 80 percent of that in the US -- somewhat larger proportions
than the ratios of 34 percent and 71 percent, respectively, in 1958.
Production in the USSR and in NATO countries is shown in the accompanying
chart.
160
54.9
175
60.0
194
65.3
192
70.7
AT
Other
NATO
US
USSR
Million metric tons
76.9
96.0
1958 1959 1960 1961 962
Plan
36366 7-62
965
Plan
* The estimates and conclusions in this report represent the best judg-
ment of this Office as of 1 July 1962.
** Tonnages are given in metric tons throughout this report.
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Although output of steel exceeded the plan goals during the first
3 years of the Seven Year Plan, the expansion program for ferrous metal-
lurgy is operating less smoothly than was planned. Investment goals
have been underfulfilled each year, the largest disparity occurring in
1961, when investment, estimated to have been 1.33 billion rubles,* was
almost 20 percent less than the 1.64 billion rubles in the plan. Part
of the new capacity planned for 1961 was near completion at the end of
the year and was put in operation during the first quarter of 1962. At
the end of that quarter, however, about 1.1 million tons of blast furnace
capacity, 1 million tons of steelmaking capacity, and possibly 1.5 mil-
lion tons of rolled steel capacity remained unfinished.
The growth in the total production has not been seriously affected
by delays in commissioning new capacity, nor is it likely to be during
1962-65 unless current problems increase materially. Output of crude
steel probably will amount to about 76.9 million tons in 1962 as planned
and approximately 96 million tons in 1965, the latter amount representing
the revisions of the original goal of 91 million tons. Shortfalls in
putting new units into operation have been more than offset, in their
effect on production, by increasing output of existing facilities and
probably by continued operation of obsolete units. Of the net increases
planned for production in 1959-65, increases from existing facilities
are planned to account for about 25 percent of the growth in production
of pig iron and rolled steel and for up to 4o percent of the increase in
crude steel. The problems arising from both planning concepts and their
implementation, however, could make it increasingly difficult for the
industry to retire obsolete capcity in the amounts planned and to achieve
the quality and variety of steel mill products and the cost reductions
planned for 1959-65.
Since the beginning of the Seven Year Plan period the USSR has com-
missioned 11 new blast furnaces having a total annual capacity of about
10.4 million tons of pig iron. Two of the furnaces (totaling 2.2 million
tons of capacity) were scheduled for 1961 but were put in operation in
the first quarter of 1962. At the end of that quarter, one additional
blast furnace that was planned for 1961 was still under construction. A
total of 30 million tons of new blast furnace capacity is planned for
1959-65, of which about 24.5 million tons are to be in operation by the
beginning of 1965. Furnaces with a total capacity of 2.9 million tons
are to be retired during 1959-65.
Significant increases in effective capacity of blast furnaces are
being obtained in the USSR, as in the US and other Western steel-pro-
ducing countries, from the use of well-prepared raw materials, auxiliary
* Ruble values in this report are given in new rubles established by the
Soviet currency reform of 1 January 1961. A nominal rate of exchange
based upon the gold content of the respective currencies is 0.90 ruble to
US $1. This rate, however, should not be interpreted as an estimate of
the equivalent dollar value of similar US goods in the steel industry.
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fuels and oxygen in conjunction with high top pressure, high blast tem-
peratures, and other modern practices. The Soviet industry relies
heavily on the use of sintered ores, mostly self-fluxing sinter, and
is increasing total sintering capacity by substantial amounts. The
industry is less advanced in more complex methods of beneficiating
iron-bearing materials. Pelletizing, for example, has progressed only
to the pilot plant stage, although there are plans to construct about
20 million tons of capacity for production of iron ore pellets.
The USSR has commissioned about 13.7 million tons of new crude steel
capacity since the beginning of the Seven Year Plan period. Thirty-three
open-hearth furnaces and 11 electric furnaces have been put in operation.
All electric furnaces planned for 1959-61 were installed in those years,
but seven open-hearth furnaces were unfinished at the end of 1961, 4 of
which were completed in the first quarter of 1962 and 3 scheduled for
later in 1962. Five additional open-hearth furnaces and five electric
furnaces are planned for 1962. A total of 36 million tons of new crude
steel capacity is to be commissioned during 1959-65, of which 28 million
to 30 million tons are to be in production by the beginning of 1965. About
2 million tons of obsolete crude steel capacity are to be taken out of pro-
duction in 1959-65.
The use of oxygen in steelmaking -- a major development in the US
and other Western countries -- has developed less rapidly in the USSR
than was planned and lags behind the US in important respects. Plans
are not being met, mainly because of extended delays in designing and
manufacturing the required oxygen-generating equipment and basic oxygen
converters. The USSR has installed no new basic oxygen converters since
the plan period began. There are seven units in operation which are
estimated to have produced 2.5 million tons of steel in 1961 compared
with 3.6 million tons in the US. The USSR plans to build two top blown
basic oxygen converters in 1962, which are expected to be in production
in 1963, and to build six more in 1963. Oxygen injection practices were
in use in 8 open-hearth shops, having a total of no more than 50 furnaces,
in 1960. About 225 open-hearth furnaces in the US are equipped for oxy-
gen injection.
Nine rolling mills commissioned in the USSR in 1959-61 have a total
capacity of 10.9 million tons, or about 1.5 million tons less than was
planned to be commissioned in those years. The shortfall occurred in
1961 and resulted mainly from a failure to install four of the five
cold rolling mills that were in the plan for 1961. Whether these four
mills, one of which reportedly was nearing completion early in 1962,
are among the five to be commissioned in 1962 is not clear.
More serious delays in installing new rolling mills will have to
develop in 1962-65 to jeopardize the goals for production of 59.2 mil-
lion tons of rolled steel in 1962 and 73.6 million tons in 1965. A
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continuation of present trends, however, could well prevent achieving
the steel mill product mix planned for 1965. During 1959-65 a total
of 29 million tons of new rolled steel capacity is to be commissioned,
of which 25.2 million tons are to be in production by the beginning of
1965. Even the installation of all the rolling and finishing facilities
planned would not necessarily assure the improved product mix envisaged
in the plan, however. Revisions of state standards and the provision,
in production plans, of incentives based on quality as well as tonnage
appear to be equally important.
The Soviet steel industry continued development of continuous cast-
ing facilities. Six industrial-scale plants are in operation for re-
search and developmental purposes, and five are planned. Production in
1961 exceeded 700,000 tons and is planned at 1 million tons in 1962 and
8 million tons in 1965.
Progress is being made in mechanizing labor-consuming operations in
ferrous metallurgy and in designing, producing, and adopting automatic
controls of processes and operations, but accomplishments are somewhat
behind the plan. Both in mechanization and in automation the Soviet
steel industry at best is no more advanced than that in the US and in
general lags behind the US. Soviet research appears to be of a high
caliber; problems arise from delays in designing and producing the
necessary instruments and other mechanisms and in applying the product
of research to industrial operations. A basic deterrent to automation
in the Soviet steel industry is the relatively low level of mechaniza-
tion, and until considerable improvement is made, advanced applications
of automatic controls will be greatly delayed.
The pattern of Soviet foreign trade in ferrous raw materials and
products in 1959-61 was essentially the same as in previous years. The
USSR remained a net exporter of raw materials and steel to the European
Satellites, a net exporter of steel to Communist Asia, and a net importer
of rolled steel from the industrial West. Exports of rolled steel were
almost 3.0 million tons and imports 1.5 million tons in 1960, the latest
year for which data are available.
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I. Introduction
Production of crude steel in the USSR rose to 70.7 million tons in
1961 and is planned to increase to 76.9 million tons in 1962, as shown in
Table 1.* The volume of output in 1961 represented an over-all increase
of 15.8 million tons, or 29 percent, since the beginning of the Seven
Year Plan in 1959. By comparison, production in NATO countries increased
32 million tons (20 percent), including increases of 12 million tons
(15 percent) in the US and 20 million tons (25 percent) in other NATO
countries, as indicated by the data in Table 2.** The rate of increase
in production was greater in the USSR than in the US or in the other NATO
countries, and Soviet production equaled 37 percent of NATO output and
almost 80 percent of US production in 1961, a slight increase from the
1958 ratios of 34 percent and 71 percent, respectively. On a per capita
basis, however, Soviet production in 1961 amounted to only 325 kilograms
(kg) compared with US production of 484 kg. Furthermore, in terms of
crude steel capacity the margin in favor of the US is considerably larger.
Soviet production in 1961, which equates to Soviet capacity,*** was only
about 50 percent of estimated US capacity at the beginning of 1960.
Early in the Seven Year Plan period, Soviet planners became con-
vinced that higher levels of production and consumption of steel could be
achieved in 1965 than were envisaged in the plan. The heightened opti-
mism was based in part on the above-plan levels of production obtained in
1959. Revised goals were established for 1960 and were exceeded, except
for a slight shortfall in production of pig iron. Some time in 1960 or
early in 1961 the Seven Year Plan for the ferrous metallurgical industryt
* Table 1 follows on p. 6.
** Table 2 follows on p. 7.
*** Soviet production of crude steel is equated to capacity because de-
mand is set by the plan and not by market forces. Given adequate sup-
plies of raw materials, output of crude steel would be a function of
maximum furnace capacity, factored by normal reductions caused by repair,
maintenance, and other down time.
t The term ferrous metallurgy as used in the USSR includes (1) the ex-
traction and beneficiation of iron, manganese, and chrome ores; (2) the
extraction of limestone and other nonmetallic mineral raw materials; (3)
production of refractories; (4) production of electric furnace as well as
blast furnace ferroalloys; (5) production of coke and coke-chemicals, pig
iron, crude steel, and rolled steel; and (6) production of "metal articles,"
which include not only cold rolled strip, wire, and wire products but also
certain consumer items. Plants considered to be a part of the ferrous 50X1
metals branch of the Soviet economy produce about 88 percent of the coun-
try's total output of crude steel and 94 percent of the rolled steel. The
remainder is made at machine building and other such plants. 1/
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Table 1
Production of the Ferrous Metallurgical Industry in the USSR
1958-61 and Planned for 1959-62 and 1965
Million Metric Tons
Commodity
1958 21
1959
1960
1961
1962 Plan 1/
1965
Plan
Plan12/
Actual 2/
Plan 2/
Actual 2/
Plan 2/
Actual 2/
Original E./
Revised Pi
Usable iron ore
88.8
92.7
94.0
105.5
105.9
116.5 12/
'117.6
N.A.
150 to 160
167.5
Pig iron
39.6
42.7
43.0
47.1
46.8
51.2
50.9
56.0
65 to 70
72.5
Crude steel
54.9
59.Q
60.o
64.9
65.3
71.3
70.7
76.9
86 to 91
96.0
Rolled steel
43.1
46.0
47.0
50.3
51.0
55.3
55.2
59.2
65 to 70
73.6
a.
b. 3/
c.
d. 5/
50X1
f.
g./
h. Estimated.
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Table 2
Production of Crude Steel in the USSR, the US, and NATO Countries
1958 and 1961
Total
(Million Metric Tons)
Per Capita
(Kilograms
1958
1961
1958
1961
USSR
54.9
70.7
265
325
NATO countries
160
192
346
398
Of which:
US
77.3
88.9
444
484
a. Based on estimates of midyear population.
was revised. Instead of as much as 91 million tons of crude steel and
70 million tons of rolled steel, production in 1965 is now planned to be
96 million and 73.6 million tons, respectively.
Production of ferrous metals in 1961 was slightly less than was planned
for the year on the basis of the revised goals for 1965, but the shortfalls
were not significant, amounting to only 300,000 tons of pig iron, 600,000
tons of crude steel, and 100,000 tons of rolled steel. Output of crude
steel was 8.3 percent larger than in 1960 -- a rate of growth consistent
with the average annual rate required to meet the revised goals for 1965.
In the current year, production is planned to increase 8.8 percent, or
6.2 million tons. Assuming that output attains the level planned for
1962, which seems likely, an annual rate of growth of only 7.7 percent
during 1963-65 would assure production of 96 million tons of crude steel
in 1965.
Although the planned rates of growth in production of ferrous metals
are being achieved, the expansion program is proceeding less smoothly
than was planned or is implied in some Soviet propaganda. There are
problems at various levels both in planning concepts and in their imple-
mentation that are delaying the commissioning of new facilities and the
application of technological advances in the industry. Such problems
appear to arise from difficulties in centrally planning and implementing
an increasingly large expansion program in an economy that is growing in
complexity. Over-all production goals have not been seriously affected
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so far, nor will they be during 1962-65 unless current difficulties
increase materially. It could become increasingly difficult for the
industry to achieve other important objectives within the plan, however,
such as the plans for improving the quality and variety of steel mill
products, for retiring obsolete capacity, and for reducing costs of pro-
duction. This report appraises the problems and progress of the key
aspects of the plan in the related areas of investment, technological
change, and product mix.
II. Investment in New Capacity
A. General
The investment program for the ferrous metals industry during
1959-65 greatly exceeds in size any previously undertaken during a com-
parable period of time. Investment is planned to be 10 billion rubles,
of which about 6.32 billion rubles are for construction-assembly* work
and the remainder for equipment. 2/ Actual investment was 4.08 billion
rubles in the preceding 7-year period (1952-58). Almost two-thirds of
the total investment in 1959-65 is for expanding and modernizing mines
and plants in existence at the beginning of the plan period. 12/ Only
one new steel plant -- the Tayshet Metallurgical Plant in East Siberia --
is planned to be put under construction during 1959-65.** When completed
it will be a fully integrated plant having a crude steel capacity of per-
haps 3.5 million tons, although there is evidence that final plans for
the plant are yet to be established. No steel is to be produced at Tay-
shet by 1965, but 3 coke batteries are to be built and the plant's first
blast furnace is to be completed in 1965.
The amount of investment planned for the components of ferrous
metallurgy in 1959-65 is known only in part. One-third of the total
(3.3 billion rubles) is for ore mining and concentrating facilities and
the construction of sinter plants. 12/ Investment in the pipe and tube
industry is planned to be 637 million rubles compared with an actual out-
lay of 311.4 million rubles in 1952-58. 11/ More than 100 million rubles
are to be invested in oxygen plants for the ferrous metals industry I_LV
and 450 million to 500 million rubles in intraplant transportation facili-
ties. 12/ These amounts total 4.5 billion rubles, leaving about 5.5 bil-
lion rubles for investment in all other components of ferrous metallurgy.
* Construction-assembly costs include the cost of constructing fixed
buildings and structures and the cost of installing production equipment
but not the cost of the equipment.
** Twenty-four new installations are in the construction plan of the
ferrous metallurgical industry, including (in addition to the steel plant)
eight ore-mining enterprises, five refractories plants, three ferroalloy
plants, one coke-chemical plant, one powder metallurgy plant, one pipe
plant, three metal specialities plants, and one precision alloy plant. 11/
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Investment plans have been underfulfilled annually since the be-
ginning of the plan period. The actual investment of about 1.02 billion
rubles in 1959 (the amount indicated by a reported increase of 22 per-
cent above the 840 million rubles invested in 1958 1//) was about
7 percent less than the 1.10 billion rubles planned for 1959. 1f/ In-
vestment in 1960 is estimated to have been 1.19 billion rubles,* or about
7 percent less than the 1.28 billion rubles in the plan for that year. XX
The underfulfillment was considerably larger in 1961, when investment,
estimated to have been 1.33 billion rubles, was almost 20 percent less
than the 1.64 billion rubles ?_5/ in the plan. Investment in 1962 is
planned to be 1.47 billion rubles, an amount that is 10.6 percent 21/
larger than estimated actual investment in 1961 but is about 10 percent
less than was planned for 1961. Investment in 1962 is to be directed
primarily to the completion of projects unfinished at the beginning of
the year.
Most of the new capacity to be commissioned during the 7-year
period, which is shown in Table 3,xxx will have to be in operation or
near completion by the end of 1964, according to the plan for produc-
tion. For example, the investment plan for the 7 years provides for
commissioning new steelmaking facilities having a total annual capacity
of 36 million tons of crude steel. In the production plan, new facili-
ties are expected to account for output of 28 million to 30 million tons
of crude steel in the last year of the plan period.
B. Iron Ore
Commissioning of new capacity for mining iron ore has been some-
what behind schedule so far in the Seven Year Plan period, but by increas-
ing production of existing mines and probably by continuing to operate
mines that otherwise would have been retired,t the industry has been able
to maintain output of iron ore at levels above those planned for 1959-61.
Annual production of crude iron ore is not reported by the USSR, but
* The 1,468 million rubles planned for 1962 as reported in source 12/
and the planned increase of 10.6 percent in that year as reported in
source 20 indicate that actual investment in 1961 was about 1.33 billion
percent larger than in 1960,
of about 1.19 billion rubles
the preliminary Soviet esti-
rubles. Actual investment in 1961 was 11.5
according to source 21/, indicating a total
in 1960. This amount is slightly less than
mate of 1.25 billion rubles. 22
** The amount planned for 1960 was 25 percent larger than actual in-
vestment in 1959 according to source and 26 percent larger according
to source LI/.
*XX Table 3 follows on p. 10.
t Mines having a total capacity of 25 million tons are to be retired
during 1959-65. 2f/
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Table 3
New Capacity for the Ferrous Metallurgical Industry in the USSR 2/
Commissioned 1952 - First Quarter 1962 and Planned for 1959-65
Million Metric Tons
Commissioned12/
Remainder
Commissioned
Additional
Remainder
Commissioned
PlannedI
Required
First Quarter
Capacity Fanned
Required
Type of Capacity
1952-58 2/
1959-65 1/
1959-60
1961
1962-65
1962 2/
1962 f
1963-65 5/
Blast furnace
16.3
30
6.2
2.0
21.8
2.2
4.2
15.4
Steelmaking
12.4
36
7.5
4.8
23.7
1.4
3.8
18.5
Rolling mill
6.8
29
8.0
2.9
18.1
N.A.
N.A.
N.A.
a. Excluding additions to capacity resulting from enlarging existing facilities and from technological and other sources of in-
creased production from existing facilities.
b. Data for 1959-60 are residuals obtained
for 1959-61 reported in source
c.
d.
e. Estimated capacities
commissioned until early
f. Estimated capacities
capacities of additional
five electric furnaces).
g. Assuming that plans for 1962 are fulfilled.
of 2 blast
in 1962.
of the remaining units not completed in 1961 (one blast furnace and three open-hearth furnaces) and
facilities planned for commissioning in 1962 (three blast furnaces, five open-hearth furnaces, and
by subtracting amounts commissioned in 1961 as reported in
furnaces and 4 open-hearth furnaces
that
source 22/
from the totals
were scheduled for completion in 1961 but were
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output of usable iron ore* in 1959-61 exceeded the original goals by
9 million tons and was 2.8 million tons in excess of the amount re-
quired by the revised annual plans.
The aggregate capacity of new mines put in operation during
1959-60 was only slightly less than was planned for those years. A
total of 23 million tons of crude ore mining capacity was commissioned
in 1959 _31/ compared with the goal of 26.3 million tons. LI/ The plan
for 1960 was essentially fulfilled with the commissioning of all but
_/
1 million tons 35 of the 31 million tons of capacity planned to be put
g
in operation. 3 The amount of new capacity commissioned in 1961 is un-
known, although a sizable underfulfillment is indicated inasmuch as only
50 percent of the 40 million tons of capacity planned for construction LY
had been commissioned by the end of November. Al/ In 1962, 34 million
tons of ore mining capacity are to be put in operation. 12/ An average
of about 30 million tons of such capacity will have to be commissioned
annually during 1959-65 to fulfill the plan for constructing a total of
218 million tons of ore mining capacity.** 112/
At least 12 iron ore concentrating plants are to be constructed
during 1959-65, and production of concentrates is planned to increase
from 32 million tons in 1958 to about 96 million tons in 1965. LI-1/ New
concentrating plant capacity has been commissioned in the Krivoy Rog
Basin, at the Kursk Magnetic Anomaly, and at other major deposits.
At a higher level of ore processing, it is estimated that the
construction of 60 million tons of sintering capacity/2/ and 20 mil-
lion tons of pelletizing capacity is planned for 1959-65. lg./ Produc-
tion of sinter has increased substantially, from 50.8 million tons in
1958 to 74.1 million tons in 1961. LiA/ Nineteen new sinter lines are to
be installed in 1962.2112/ The total capacity of these new facilities is
unknown but may be on the order of 15 million tons.***
* The term usable iron ore as used in the USSR includes (1) iron ore
that is used in blast furnaces and open-hearth furnaces without further
processing and (2) the product of ore beneficiation plants (that is,
concentrates, pellets, and sinter). Production of usable ore is not
equal to the sum of output of shipping grade ore and of beneficiated
ore, however, because shipping grade ores as well as poorer ores in-
creasingly are being further processed in order to improve their physi-
cal and chemical properties.
** Increases planned for capacity and production in the iron ore indus-
try are based in part on the increasing amounts of ore that the USSR will
supply the European Satellites. Shipments are planned to be about 25 mil-
lion tons in 1965 compared with 11.8 million tons in 1958 and 14.8 million
tons in 1960.
*XX The total annual capacity of eight sinter lines to be installed in
the Ukraine is 6 million tons LY or an [footnote continued on p. 12]
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After a number of years of research and development work the
Soviet authorities claim to have in operation an industrial-scale pel-
letizing plant at Krivoy Rog, although a report by Western visitors to
the plant describes it as being on an experimental scale. Production of
380,000 tons of pellets (possibly an annual rate in 1960 or 1961) is
claimed, which is an amount more appropriate to an experimental plant
than to a full-scale enterprise. Two additional plants, each with a
capacity of 5.4 million tons, are said to be under construction in the
Krivoy Rog Basin, and two more are to be built by the end of 1962 --
one at the Kachkanar deposit and one at the Sokolov-Sarbay deposit.
The capacity of each of the latter plants is to be 5 million tons.
Development of pelletizing in the USSR is considerably behind
that in the US, and US plants were among the facilities that the USSR
was most anxious to include in a recently discussed exchange agreement.
US production of iron ore pellets in 1960 was 13.8 million tons,112/
and annual capacity late in 1961 totaled 17.6 million tons. 22/ About
4.9 million tons of new capacity are scheduled to be put in operation
in the US in 1962-63. 21/ In addition, plants in Canada that were
largely financed by US companies and whose output is largely for con-
sumption in the US have an aggregate capacity of 9.6 million tons, 22/
with 5 million tons in addition scheduled to be put in operation in
1962-63. 2V
C. Blast Furnaces
Soviet plans for 1959-61 provided for commissioning 12 new blast
furnaces having an aggregate capacity estimated at 11.5 million tons.
Nine of these furnaces, with a total capacity of 8.2 million tons, were
in operation at the end of 1961, as shown in Table 3.* Two furnaces
with a combined capacity of 2.2 million tons were commissioned in the
first quarter of 1962, but the remaining unit, having an annual capacity
of 1.1 million tons, was still under construction.
Although the USSR has commissioned most of the new blast furnaces
that were planned to be put in operation in 1959-61, time schedules have
not been met. In 1959, when five furnaces were to be built, three were
completed by the end of the year and one was commissioned in May 1960
and the other in July 1960. Three new furnaces were to be built in 1960
(excluding those carried over from 1959), of which two were completed
average of 750,000 tons each. Assuming that this average applies to all
lines to be installed in the USSR, a total capacity of 14.2 million tons
is indicated. The largest capacity unit now in operation in the USSR
reportedly has an annual capacity of 950,000 tons. Li-72
P. 10, above.
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during the year and one was commissioned in June 1961. The plan for
1961 provided for four furnaces, of which one was in operation by the
end of the year, two were brought in in February 1962, and one (under
construction at the end of March 1962) is one of four furnaces in the
plan for 1962.
The lags in commissioning new blast furnaces contributed to
minor shortfalls in the annual plans for production of pig iron in
1960 and 1961.* New furnaces, most of which must be in operation at
the beginning of 1965, are planned to provide 24.5 million tons of pig
iron in 1965, as shown in Table 4.** With 10.4 million tons of new
capacity installed as of the end of March 1962, achievement of this
goal will require the commissioning of 14.1 million tons of additional
capacity by the end of 1964. About 4.2 million tons of capacity are
planned for 1962, and an average of nearly 5 million tons a year will
be required in 1963-64. Through the first quarter of 1962, commissioning
of new capacity was at an average annual rate of 3.2 million tons.
D. Steelmaking Facilities
A total of 12.3 million tons of crude steel capacity was commis-
sioned in 1959-61. There were slight shortfalls in the first 2 years of
the plan period, but most of the capacity planned for those years was
completed by the end of 1960. New capacity commissioned in 1961 totaled
4.8 million tons compared with 7.2 million tons in the plan, although
1.4 million tons of capacity were near completion at the end of the year
and were put in operation early in 1962. At the end of the first quarter
of 1962 the over-all lag may have been approximately 1 million tons.
In spite of delays in commissioning new steelmaking capacity,
production of steel in 1959-61 was about 0.8 million tons larger than
required by the revised annual plans and reportedly was 9.2 million tons
in excess of the original plan goals. 22/ New facilities built during
the Seven Year Plan period are expected to account for output of 28 mil-
lion to 30 million tons of steel in 1965. Thus 14.3 million to 16.3 mil-
lion tons of new capacity must be completed during the remainder of the
plan period, most of which should be in operation by the end of 1964.
The annual rate of 5.2 million to 5.9 million tons*** that thus will be
necessary is somewhat larger than even the best year's performanCe.
* Production of pig iron in 1959-61 was 1.6 million tons greater than
was expected in the original control figures for those years 2V but was
0.3 million tons less than the total revised annual plans.
** Table 4 follows on p. 14.
xxx Calculated on the basis of 2.75 years, which allows for capacity in-
stalled in the first quarter of 1962.
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Table 4
Sources of Planned Increases in Production of Iron and Steel in the USSR
1959-65
Million Metric Tons
Pig iron
Original plan
Revised plan
Crude steel
Original plan
Revised plan
Rolled steel
Original plan
Revised plan
Plus Increases in Production from:
Actual
Production 2/ New Units
1958 Put in Operation Existing Units Other 2/
39.6
54.9
43.1
19.5 2/ 10.9 2/
24.5 51 8.4 f/
2.9
2.9
Less Retirements 2/
2.9
2.9e
Planned
Production
1965 2/
70.0/
72.5 72.5
29.5 1/ 8.6 2/ 0 2.0 91.0 1/
28.0 to 30.0 12/ 14.0 to 16.0 II/ 0 2.0 12/ 95 to 99
21.9 1/ 7.0 2/ 0 2.4 69.6 1/
25.2 1/ 7.6 1/ 0 2.4 1/ 73.6
a. /
b. These data represent the first year's production of blast furnaces commissioned late in 1958. 21/
c. Retirements according to the revised plans are assumed to have been the same in the original plans.
d. Residual representing the amount required to achieve the net increase in production after allowing for production from existing
units (and "other" sources in the case of pig iron) and for retirements.
e. 2f1
f. Upper limit of the plan.
g. 59
h.
j. This figure represents production in 1960 of the mills to be retired, the total capacity of which was 3.0 million tons.
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The construction of new open-hearth furnaces was largely on
schedule during 1959-60. Ten units were completed in 1959, as planned,
and 9 of the 10 furnaces in the plan for 1960 were commissioned. The
remaining furnace, at the Kazakh Metallurgical Plant, was not reported
to be in operation until early in 1962. The plan for 1961 provided
for constructing 17 open-hearth furnaces, including the unit not com-
pleted in 1960 at the Kazakh Metallurgical Plant, of which 10 were in
operation at the end of the year, 4 were completed early in 1962, and
3 remained under construction at the end of March 1962. The plan for
1962 provides for the construction of five new open-hearth furnaces, g.../
excluding the seven units carried over from 1961.
Of the 33 open-hearth furnaces commissioned through the first
quarter of 1962, 22 were built at 4 plants. Seven furnaces were put in
operation at the Cherepovets and Magnitogorsk plants, five at the Krivoy
Rog plant, and three at the Ilyich-Zhdanov plant. At least four of the
furnaces built at these plants are 600-ton units, and the remainder are
500-ton units or larger. More than one-half of the new open hearths to
be built in 1959-65 are to be 500-ton to 600-ton furnaces. LI/
Plans for installing electric furnaces were met in 1959-61 with
the commissioning of 11 new furnaces. A total of 25 electric furnaces
is to be put in operation during the Seven Year Plan period. The USSR
is considerably behind the US in the design and operation of this type
of steelmaking facility. The largest electric furnaces installed in the
USSR have rated capacities of 80 tons, although their actual output in
some cases ranges up to 90 to 100 tons. Development of larger units has
been greatly delayed. Designing of a 180-ton furnace was undertaken in
1956, but development work was still underway in January 1961. J.,g
Furnaces of this size have been in operation in the US industry for a
number of years, and units with capacities of 200 tons or more have been
installed. Soviet interest in electric furnace technology in the US is
evidenced by the inclusion of this phase of steelmaking operations in
Soviet proposals concerning the US-USSR technical exchange program.
The most conspicuous Soviet lag, relative to developments in the
US and other major Western steelmaking countries, is the failure of the
USSR to install any new, basic oxygen converter capacity during 1959-61.
The USSR has a total of seven top blown oxygen converters installed at
two plants (the Krivoy Rog Metallurgical Plant and the Petrovsk Metal-
lurgical Plant in Dnepropetrovsk 7_1), all of which were built before
the beginning of the Seven Year Flan period. g/ Bessemer converters
have been adapted to the use of oxygen, but the USSR has constructed no
additional basic oxygen converters of the type which, in the West, rep-
resents one of the major developments in steelmaking.
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The USSR has about 3.8 million tons of basic oxygen converter
capacity, ?2/ but, because of technical and other problems, the units
have operated considerably below capacity. Production in 1961 is esti-
mated to have been 2.5 million tons, which is little more than double
the output of 1.2 million tons in 1958. 12/ During the same period,
output in the US increased from 1.2 million to 3.6 million tons. US
capacity, which was 3.7 million tons at the beginning of 1959,/1/ is
estimated to have been 6.8 million tons at the beginning of 196 2 E/
and on the basis on present plans is expected to total 10.2 million
tons by the beginning of 1965. /2/
In the USSR, two 100-ton converters are to be built in 1962 and
are to be in production in 1963, and six additional units of this size
are to be built in 1963. 'Pi/ Designing of 250-ton converters is to be-
gin in 1962.i2/ The largest units in the US (which are to be in oper-
ation in 1962 have a rated capacity of 272 tons. 76/
The significance of the Soviet lag in developing basic oxygen
converter capacity is not the effect on total production of steel, be-
cause production goals are being exceeded. The lag is important in
view of the Soviet effort to increase production rapidly, the relatively
low capital investment required per ton of capacity for oxygen converters
compared with open-hearth furnaces, and the high production rates (and
lower production costs) of converters.* Various reasons for the lag
have appeared in Soviet reports. Representatives of the Central Scien-
tific Institute for Ferrous Metallurgy attribute it to faulty planning
and to indecision at Gosplan, USSR, and the State Economic Council. /2/
Representatives of Gosplan, however, attribute it to "the backwardness
of industry in developing new types of equipment," :142/ a criticism that
is concurred in implicitly by the director of one of the two Soviet steel
plants presently operating oxygen converters. .?1/
Indecision at the planning levels probably has been based mainly
on reservations concerning the wisdom of greatly increasing investment
in converter capacity in view of the lack of significant progress in the
technology of oxygen converter design and operation relative to that in
open-hearth furnace technology. Converter technology has improved but
is less advanced in the USSR than in the US, according to reports in
Soviet technical journals. L?_/ Moreover, technical advances in open-
hearth furnace operations in the USSR as in other countries (notably the
use of oxygen) were increasing production rates substantially. At the
same time, however, serious difficulties were being encountered in de-
signing and producing large-capacity facilities for generating oxygen.
* The record heat at one US plant is 175 tons in 43 minutes for a rate
of 244 tons per hour, /// while good open-hearth furnaces in the US pro-
duce at the rate of 36 tons per hour, tap-to-tap time. y2,',/
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The BR-2 unit, which is capable of producing oxygen at a rate of 35,000
cubic meters (cu m) per hour, D./ was not designed until 1960, and the
_.7/
first unit was produced only in 1961. 84 It was intended to be put in
operation (at the Azovstal' steel plant in the fourth quarter of 1961
and, on the basis of its performance there, to be produced serially be-
ginning in 1962. f2/ The unit had not been assembled as of mid-January
1962, however.
In view of the technical problems involved, the converter program
may well have been delayed at the Gosplan level during 1959-60 in the ex-
pectation of success in purchasing the Austrian-owned Linz-Donawitz (L-D)
process. Inability to reach agreement on the method of payment (in hard
currency or commodities) apparently has forestalled conclusion of the deal,
which would provide the USSR with at least one L-D plant having a capacity
of 2 million tons or more, including complete technology and oxygen-gen-
erating facilities. fg
E. Rolling and Finishing Capacity
The USSR plans to commission 23 million to 29 million tons of
rolled steel capacity during 1959-65 and to have in operation enough new
mills to provide 25.2 million tons of the 73.6 million tons of rolled
steel to be produced in 1965. The new facilities not only will sub-
stantially increase total output of rolled steel in the USSR but also
are expected to materially improve the quality and variety of steel mill
products available to steel-consuming industries.* The number of some
types of rolling mills in operation in 1958 and planned to be in produc-
tion in 1965 is shown in Table 5.**
During 1959-65, 55 new hot rolling mills f// and 11 cold rolling
mills 21 are to be put in operation. Among the hot rolling mills to be
commissioned are 13 plate and sheet mills having an aggregate annual
capacity of 21.6 million tons L2/ -- enough to increase the total of such
capacity in the industry to about 36 million tons by the end of the plan
period after allowing for retirement of some obsolete capacity. The in-
dustry plans to retire 91 rolling mills which, although having a total
capacity of about 3 million tons, 22/ in 1960 produced about 2.4 million
tons. 21/ Among these are 52 plate and sheet mills which in 1960 pro-
duced about 1 million tons of products. E/ Some obsolete capacity is
being retained on a standby basis to be used for producing small-lot
runs. 21/
In addition to new rolling mills, the plan provides for a sub-
stantial increase in heat treating facilities, a type of equipment
* For a discussion of planned changes in the product mix, see IV, p. 26,
below.
** Table 5 follows on p. 18.
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Table 5
Selected Types of Rolling Mills in Operation in the USSR 2/
1 January 1959 and Planned for 1 January 1966
Type of Mill
Mills in Operation
1 January 1959
Mills Planned to be in Operation
1 January 1966
Number
Production in 1959
(Thousand Metric Tons)
Number
Capacity
(Thousand Metric Tons)
Pipe billet
3
1,269
3
1,850
Rail-structural
5
4,544
5
5,350
Strip (skelp)
3
932
4
2,42o
Large bar
55
8,099
1+3
13,249
Medium bar
29
3,797
31
8,236
Small bar
36
3,670
36
7,722
Special section bar
0
o
3
172
Wire
16
2,932
19
6,225
Plate and sheet
.144
11,680
104
35,933
a. 21
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considerably less advanced and less widely used in the USSR than in the
US. New finishing line equipment to be installed includes continuous
galvanizing and electrolytic tinning lines, which also are facilities
in which the USSR lags.
A large increase in pipe mill capacity is planned, particularly
in facilities for production of large-diameter pipe required for the gas
and oil pipeline program.
The USSR has put in operation a total of 10.9 million tons of
rolling mill capacity since the beginning of the Seven Year Plan period.
Annual plans were met in 1959-60, but in 1961 only 2.9 million tons of
new capacity were commissioned of the 4.4 million tons planned for the
year. 22/ The lag in 1961 was mainly in commissioning cold rolling
facilities: five such mills were to have been put in operation, but
only one was commissioned by the end of the year. Continued delays dur-
ing the remainder of the plan period would jeopardize achievement of
plans for improving the rolled steel product mix and for retiring obso-
lete capacity. Unless current problems multiply, however, the goal for
the total production of rolled steel in 1965 still can be achieved.
Deficiencies in output of rolling mill equipment partly explain
the delays in putting new facilities in operation. Long lead times are
characteristic of the designing, production, and installation of rolling
and finishing equipment in the USSR. In terms of the weight of equip-
ment produced, output was smaller in 1958 than in either of the 2 pre-
ceding years, dropping from 111,300 tons in 1956 to 96,100 tons in 1957
and 86,900 tons in 1958.* The level of production increased to 102,300
tons in 1959 and 120,600 tons in 1960. 2.Y In 1961, however, output was
estimated to be 110,000 tons, which not only was significantly less than
was planned (150;000 tons) but was below the 1960 level.
All the blame for the lag in commissioning new rolling mills
cannot be assigned to the machine building industry, however. Basic
rolling mill assemblies, once delivered to the steel plant, frequently
became operative after the planned date because of lagging deliveries
of other equipment. Faulty coordination of deliveries, in turn, fre-
quently can be attributed to deficiencies at the planning and adminis-
trative levels. Although the significance of such problems can be over-
estimated, the record to date clearly indicates that strains exist in
the planning, designing, production, and installation of new rolling and
finishing facilities -- strains that could make it increasingly difficult
for the industry to supply the variety and quality of steel mill products
planned for 1965.
* Data on production of rolling mill equipment include that produced
for the nonferrous as well as the ferrous metals industry.
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Four primary mills, including three blooming mills and one slab-
bing mill, have been commissioned since the plan period began. Two of
the blooming mills were commissioned early in 1962, 3 months behind
schedule in each case. Another blooming mill was planned for 1961 but
was not completed and has been rescheduled for 1962. At least four more
are to be installed during the remainder of the plan period, some of
which are to be 1,300-millimeter (mm) mills which are of recent design
and are said to be fully automated and to have an annual capacity of
5.5 million to 6 million ions. 21/ A slabbing mill, originally scheduled
for 1958, was commissioned at the Magnitogorsk plant in March 1959. An
1,150-mm slabbing mill, described as having the largest capacity of any
such mill in the USSR, was nearing completion in January 1962 at the
Ilyich-Zhdanov plant. Slabs rolled from ingots weighing up to 35 tons
will supply the plant's 1,700-mm sheet mill, which was completed in
1960. 2f/
Two plate mills and four hot rolled sheet mills have been put in
operation. The two plate mills, each of which is a 3-stand (two 2-high,
one 4-high), 21800-mm mill with a rated capacity of 800,000 tons a year,
were installed at the Cherepovets (1959) and Novo Troitsk (1960) plants.
There were plans for installing a 4,200-mm plate mill at the Novo-Lipetsk
plant, to be used, at least in the near future, to supply wide plate for
production of 1,020-mm line pipe. This plan was canceled in 1961, when
it was decided to install spiral-welding facilities at various plants for
production of 1,020-mm and other large-diameter line pipe.* 22/ Hot sheet
mills installed to date include a continuous, 12-stand, 2,500-mm mill at
Magnitogorsk (1960), a semicontinuous, 3-stand, 2,300-mm mill at Chelya-
binsk (1961), and two continuous 1,700-mm mills -- one a 6-stand mill at
the Cherepovets plant and the other an 11-stand mill at the Ilyich-
Zhdanov plant (1960). A 1,700-mm mill was planned to be in operation
at Chelyabinsk in the third quarter of 1961 but was incomplete at the
end of the first quarter of 1962. This mill and the 2,300-mm mill are
to be used mainly for producing stainless steel sheet. 100/
Four cold rolling mills have been installed. One, a carryover
from the previous year, was commissioned in 1959 at the Asha Iron and
Steel Works. Three cold strip mills have been installed -- a 5-stand,
4-high, 1,200-mm mill at Novo-Lipetsk (1960), a 1,700-mm mill at the
Zaporozh'ye Metallurgical Plant (1960), and a cold strip mill at the
Leningrad Steel Rolling Mill. Three cold rolled sheet mills and a cold
strip mill were scheduled for 1961 but were not completed. Included
were a 2,800-mm mill at Zaporozh'ye, 1,700-mm mills at Cherepovets and
* Spiral-welded pipe is made from sheet of sizes produced in the USSR.
The 4,200-mm mill would roll wide plate which would be used in making
1,020-mm pipe on a straight-seam, single-weld basis.
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Ilyich-Zhdanov, and a 2,000-mm cold strip mill (the second section of an
electric sheet shop) at Novo-Lipetsk which reportedly was nearing com-
pletion in January 1962. 101/
A number of bar, rod, wire, and other mills, including pipe and
tube mills, have been commissioned since the beginning of 1959. Although
there are shortages of other sizes of pipe, the greatest pressure has been
on facilities for producing pipe that is 426 mm and more in diameter --
particularly in the larger sizes, 500 mm and above. Since the plan period
began the USSR has commissioned one spiral weld mill designed to produce
up to 720-mm pipe; one 820-mm electric weld mill; and, in November 1961
at Novomoskovsk, the industry's only facilities for making 1,020-mm pipe.
Another mill for making 1,020-mm pipe is being installed at the Chelya-
binsk Pipe Plant and is planned to be completed in 1962, although the
equipment reportedly had not been ordered as of January 1962. 102/
Spiral-weld mills capable of making pipe of up to 820-mm diameter are to
be installed in 1962 at the Novomoskovsk and Ilyich-Zhdanov plants. 103/
F. Continuous Casting
The Soviet industry has worked intensively for more than a decade
on the development of continuous casting facilities. The continuous cast-
ing process is designed to permit casting of molten steel directly into
billets or slabs, eliminating the pouring of ingots and their reduction
in intermediate mills. The advantages, according to Soviet writers, are
reductions in metal losses and in the number of workers required, an in-
crease in operating efficiency, lower costs of production, and possibly
a reduction in capital requirements. 104/
Industrial-scale equipment has been installed in six plants, and
five more installations are planned. Total output is planned at 8 mil-
lion tons in 1965. 105/ Since the beginning of the plan period, two
strands with 90-ton ladles were installed in the electric furnace shops
at Novo-Lipetsk. A 4-strand unit -- said to be the largest in the
world -- was put in operation at the Donetsk (formerly Stalino) plant.
This facility has 140-ton ladles and is operated with the open-hearth
furnace shop.
These and other continuous casting facilities in the USSR, al-
though built on a commercial scale, are operated in part on an experi-
mental basis, the entire process still being in the developmental stage.
For that reason, if no other, the USSR has no plans as yet for discon-
tinuing the construction of blooming and slabbing mills. Production in
1961 exceeded 700,000 tons and is planned to be about 1 million tons in
1962. 106/
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III. Major Technical Advances
Significant increases in capacities are resulting from the wide-
spread application of technical and operating advances. How much pro-
duction is being obtained in these ways is unknown, although Soviet
estimates claim that output of open-hearth furnaces has increased
almost 2 million tons as a result of "technical improvements and the
use of new repair methods." 107/ In the 7 years, 1959-65, increased
output of existing facilities is planned to account for at least
25 percent of the net increase in production of pig iron, up to 40 per-
cent of the net increase in crude steel, and 25 percent of the net in-
crease in rolled steel (see Table ).i.*). The more important of the tech-
nical advances are the use of well-prepared raw materials** and auxiliary
fuels in blast furnaces, the use of oxygen in blast furnaces and in
steelmaking, and the mechanization and automation of operations and
processes in the industry -- developments closely paralleling similar
trends in the West.
A. Auxiliary Fuels
Supplementary fuel injection practices will be adopted increas-
ingly in the USSR as in the US, although currently they are applied more
extensively in the USSR than in the US. The incentives are reductions
in consumption of coke, which is a high-cost material in each country
although relatively more expensive in the USSR than in the US; the higher
rates of production achieved at blast furnaces; and the savings, or at
least postponement, of capital investment in coke ovens and blast furnaces.
The question is whether, at specific plants, the supplementary fuel will
be natural gas (which the Soviet steel industry is emphasizing currently)
or oil or pulverized coal or some combination. The answer depends essen-
tially on the relative costs of the various types of fuel and their avail-
ability at specific locations.
The use of natural gas as a supplementary fuel in the blast fur-
nace was undertaken in the USSR on an experimental basis in 1957, 108/
and in 1958 this practice was used at 13 blast furnaces which produced
5.1 million tons of pig iron -- 13 percent of the total production of
pig iron in that year. The Seven Year Plan provided for converting more
than 50 blast furnaces to the use of natural gas, 109/ and most new fur-
naces are to be equipped for this practice. The use of supplemental fuel
injection practices in blast furnaces has been greatly extended since the
plan period began. By the end of 1960, 46 furnaces with a total output
of pig iron in that year of 19.3 million tons ()4-1 percent of Soviet pro-
duction) had been converted, 110/ and in mid-1961 it was reported that
* P. 14, above.
** See II, B, p. 9, above.
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53 blast furnaces had been or were about to be converted. 111/ Furnaces
using natural gas were to produce about 29 million tons of pig iron in
1961 (56.6 percent of the total), according to the plan. 112/
B. Oxygen in Steelmaking
The extension of oxygen injection practices in steelmaking and,
although to a lesser extent, in blast furnace operations* is one of the
most important developments envisaged for the Soviet steel industry dur-
ing 1959-65. One Soviet estimate is that output of open-hearth furnaces
in operation in 1958 could be increased 8 million tons a year by adopt-
ing oxygen injection practices. 112/
In the original plan for 1959-65 the total production of steel
in oxygen-fed furnaces is to increase from 24 percent of the steel pro-
duced in 1958 to 70 percent in 1965 116/ -- or from 13 million to 64 mil-
lion tons, based on production of 91 million tons of steel, which was the
original goal for 1965. If it remains the objective to make 70 percent
of the steel in oxygen-fed furnaces, the revision in the production plan
would raise the amount to be made with the use of oxygen to 67 million
tons in 1965.
The plan provides for installing a number of new, basic oxygen
converters; converting Bessemer furnaces to top blown oxygen units; and
greatly extending the use of oxygen in open-hearth and electric furnaces.
All open-hearth and electric furnaces at major plants are to be equipped
for oxygen injection by the end of 1965. 117/ Consumption of oxygen,
per ton of steel, in 1965 is planned at 35 cu m for open hearths, 55 cu m
for converters, and 15 to 20 cu m for electric furnaces. 118/
The magnitude of the over-all program and the importance assigned
to it by Soviet planners are shown by the fact that more than 100 million
rubles are to be invested in oxygen-generating facilities for the ferrous
metals industry. 112/ Where oxygen will be used in blast furnaces and in
steelmaking, steel plants are to be equipped with oxygen plants having
capacities of 12,500 cu m per hour or 35,000 cu m per hour. 120/ A total
of 30 oxygen stations of these sizes is planned for 1959-65 121/; the
* The application of this practice, as planned, to all blast furnaces
in operation in 1958 could increase their production by 3 million tons
a year, according to Soviet estimates. 113/ The combined use of oxygen -
natural gas injection practices would increase production of pig iron by
15 million tons and would reduce consumption of coke by a comparable
amount. 114/
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number of each size is unknown. Smaller units, with a capacity of 5,000
cu m per hour, also will be installed in steel plants.*
The evidence indicates, however, that production of steel with
the use of oxygen is not increasing at the rate planned. To increase
output of oxygen-fed furnaces from 13 million tons in 1958 to 67 million
tons in 1965, as planned, would require an average annual increase of
about 26 percent. On this basis, production of 18.4 million tons in
1960 123/ was 2.4 million tons less than would be expected.
The lag in 1959-60 apparently resulted mainly from the failure to
increase production of steel in oxygen-fed open-hearth and Bessemer fur-
naces as rapidly as planned. Production of basic oxygen converter steel
in 1960 was 2.5 million tons, 124/ which was slightly more than would be
required (2.1 million tons), assuming the average annual rate of increase
of about 35 percent indicated by the plan to raise production to 9.6 mil-
lion tonsxx in 1965. Production of steel in Bessemer converters, all of
which reportedly have been converted to top blown oxygen units, was about
800,000 tons less than the 2.7 million tons that would be required by the
planned rate of increase in 1959-65. It can be inferred from these esti-
mates that production of oxygen-fed open-hearth steel was behind the plan
by as much as 1.8 million tons in 1960. At that time, only 8 open-hearth
shops with perhaps no more than 50 furnaces were equipped to use oxygen. 126/
The results achieved in 1961 are not yet available. Data for the
first 9 months, however, indicate that production of basic oxygen converter
steel was no larger than in 1960 -- 2.5 million tons -- compared with an
estimated planned output of 2.9 million. Production of Bessemer furnace
steel may have increased slightly but was perhaps 1.5 million tons less
than the plan.
The lag in the oxygen steelmaking planxx* reflects, essentially,
delays in designing, producing, and installing oxygen-generating equip-
ment. The failure to install new basic oxygen converter capacity during
1959-60 apparently did not affect the rate of increase in output in those
years but became a retarding factor in 1961. New converter capacity that
is being built is not expected to be in production until 1963. Yet, by
that time, production of steel in basic converters should approximate
5.3 million tons (more than double the level of 1961) in order to recover
the rate of growth required to meet the plan for 1965. Achievement of
,* Units producing 12,500 cu m per hour are the BR-1 units, those with
a capacity of 35,000 cu m per hour are BR-2 units, and the 5,000 cu m per
hour units are designated BR-5. 122/
** Basic oxygen converter steel is now planned to be 10 percent of the
total in 1965. 125/
*** See II, D, pp. 13 ff.
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the planned objectives is unlikely in view of the relatively slow prog-
ress being made toward eliminating the sources of delays in developing
new capacity. Failure to accomplish the plans, however, would not pre-
vent the total steel production from reaching the level planned for 1965,
although it could jeopardize plans for retiring obsolete steelmaking
capacity and for reducing costs of production.
C. Automation and Mechanization
Plans for developing and applying modern methods of mechanized
materials handling and devices and systems for automatically performing
or controlling operations and processes in the steel industry are stated
largely in general terms in available reports. During 1959-65 the in-
dustry plans to "automate" 114 blast furnaces, 177 open-hearth furnaces,
and 45 rolling mills. 127/ What are described as "complex systems for
regulating the blast furnace processes" reportedly are to be installed
on 33 new blast furnaces and on almost all blast furnaces to be recon-
structed during 1959-65. 128/ The "level of mechanization and automa-
tion" in ferrous metallurgy is to be raised to 80 percent by 1965.J29/
Specific operations at many plants will be equipped with automatic con-
trols during the 7-year period. Six plants, however, have been desig-
nated for special efforts in this respect and are to be made into "model"
plants as regards automation and mechanization -- the Kuznetsk, Magnito-
gorsk, Nizhniy Tagil, and Dzerzhinsk steel plants, the Bagley coke-
chemical plant, and the Zaporozh'ye refractories plant. 130/
The USSR is heavily committed to the program for increased mecha-
nization and automation in the steel industry. Capital outlays for the
program for ferrous metallurgy as a whole during 1959-65 reportedly are
planned at 370 million rubles. 131/ The larger share of this investment
undoubtedly is intended for equipment to improve materials handling --
that is, for mechanization -- which, in the ferrous metals industry gen-
erally, is considerably less advanced than in the US. The low level of
mechanization in fact partly explains the lag in developing and applying
automatic controls. "Until the problem of mechanization has been solved,
it is practically impossible to start work on automation." 132/
Assessment of progress to date is made difficult by the lack of
sufficient detailed information to evaluate specific, claimed advances.
Soviet reports of applications of "automation" to specific production
units frequently prove to refer only to more advanced instrumentation or,
in some instances, to mechanization of an operation. Apparently, more
progress has been made in automation and mechanization in the blast fur-
nace and steelmaking segments than in the rolling and finishing segment
of the industry. In general, however, the program is advancing less
rapidly than planned.
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A considerable amount of sophisticated research on basic pro-
cesses and on instruments and systems for automatic control of processes
and operations in the steel industry is being done in research institutes
and plant laboratories as shown by reports in technical literature and
by reports of Western visitors to the USSR. Research is being undertaken,
for example, on blast furnace and steelmaking processes in an effort to
develop data required to construct mathematical models essential to the
development of computer control of these processes. Similar research is
being done in the US.
Computers reportedly have been installed in several Soviet plants,
mainly for experimental work on the problem of adapting computers to blast
furnaces and steelmaking units. Soviet claims concerning some computer-
controlled operations have proved to be exaggerated, however. Western
visitors to Novo-Lipetsk in 1961, for example, found "no automation on
blast furnaces [although they] had learned in 1959 that at least one furnace
was, or would be in 1960, computer controlled. In fact, no such arrange-
ment exists and none of the personnel was aware of any such plans." 133/
Reports that a converter at Krivoy Rog was computer-controlled also proved
to be unfounded. "The converter practice at Krivoy Rog is completely
conventional and, if anything, is well behind the degree of automatic con-
trol presently achieved at ... [one US plant]." 134/ Concerning auto-
mation of blast furnaces at Krivoy Rog, including one described by the
USSR as the world's most highly automated, these observers report that
the furnaces are "fairly well instrumented but nothing in advance of good
American practice." 135/ Regarding plans for computer control of blast
furnaces at Krivoy Rog, the system being worked on was described as a
"simpler approach than is presently contemplated in the US and one which
can hardly be regarded as complete computer control." 136/
At the plants to be made into "model" plants during the plan
period, a number of specific operations have been mechanized and auto-
matic controls adapted to some. The program is behind schedule, however,
at least at some of the plants. At the Nizhniy Tagil plant it is lag-
ging about 1 year. 137/ The Dzerzhinsk plant is 2 years behind its
plan, 138/ and the program for Magnitogorsk apparently was not accom-
plished in 1961.
IV. Steel Mill Products
The plan for production of major categories of steel mill products
in 1959-65 is indicated by data in Table 6.* Major emphasis is on ex-
panding output of flat rolled products and pipe and tube -- particularly,
in the former category, production of cold rolled sheet and end products
* Table 6 follows on p. 27.
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Table 6
Production of Selected Steel Mill Products in the USSR
1958-61 and Planned for 1965
Thousand Metric Tons
Product
1958
1959 2/
1960 2/
1961 12/
1965 Plan
Rails 2/
Heavy sections
Light sections
Wire rods
Strip, hot rolled
Plate
Sheet, hot rolled
Selected end products
Cold rolled sheet
Cold rolled strip
1,837 2/
8,653 2/
2,900 2/
2)934 11
2,041 2/
6,490 2/
4,853 2/
1,171 2/
329 1/
N.A.
N.A.
N.A.
3,180
2,093
N.A.
N.A.
1,390
N.A.
N.A.
N.A.
N.A.
3,547
2,756
N.A.
N.A.
1,533
N.A.
N.A.
N.A.
N.A.
3,800
3,200
N.A.
N.A.
1,700
N.A.
2,700 1/
13,625 2/
4,400 2/
5,480 2/
N.A.
13,690 1/
12,660 1/
6,450 1/
510 1/
Electrical sheet
388 2/
463
494
600
930 E/
Transformer sheet
25 Ili
N.A.
N.A.
N.A.
268 12/
Tinplate
269 11
304
312
330
600 2/
Of which:
Electrolytic
13 1/
N.A.
N.A.
N.A.
342 1/
Total pipe
4,623 2
5,215
5,805
6,400
10,210 1/
Seamless pipe
2,737 ?2/
N.A.
3,266
3,400
5,008 2
Welded pipe
1,886 1/
N.A.
2,539
3,000
5,202 ,2
Electric welded
(under 426 mm)
357 1/
N.A.
N.A.
N.A.
1,238 1/
Electric welded
862 1/
N.A.
N.A.
N.A.
2,400 1/
(426 mm and above)
Furnace welded
667 1/
N.A.
N.A.
N.A.
1,564 1/
a. 139/
b. Estimated on the basis of production for 9 months as given in
source 140/.
c. For broad-gauge track.
d. 141/
e. Estimated on the basis
f. 143/
g. Estimated on the basis
h. 145/
i. Production in 1958 was 5 percent of the total amount of tinplate pro-
duced and in 1965 is planned to be 57 percent. 146/
j. 147/
of source 142/.
of a 140-percent increase during 1959-65. 144/
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such as transformer and electrical sheet, which are in short supply.
Large increases in production of electric welded pipe are planned in
order to meet the expanded requirements of the oil and gas industries.
In addition to increased tonnages of the total output of rolled
steel, a wider assortment and improved quality of steel mill products
are major objectives of the Soviet steel industry. The relatively
limited range of the products produced in the USSR is indicated by the
fact that only about 600 standard sizes are available, 148/ whereas
the US industry, oriented to consumers' requirements, produces several
thousand.
Plans for improving the quality of steel mill products involve a
number of considerations, one of which is the increased production of
low-alloy steel in order to expand output of lighter weight, high-
strength steel mill products and thus to reduce the volume of steel
required in specific applications without loss of performance charac-
teristics. Production of low-alloy steel is planned to increase from
1.35 million tons in 1958 to 6 million tons in 1965. Substantial in-
creases also are planned for production of stainless and other alloy
steels, but the rates or amounts of increase are unknown. The effort
being made to improve the quality of proaucts also is indicated by the
emphasis being given to the installation of heat treating facilities
and cold rolling mills.
Annual plans for the total production of rolled steel in 1959-61
were fulfilled, and planned increases in output of at least some main
categories of products were achieved. Production of cold rolled sheet
in 1961, for example, was approximately 1.7 million tons, about the
amount planned for that year.* Similarly, the total production of pipe
has increased at about the rates planned. There is considerable evi-
dence, however, that production goals within these and other broad cate-
gories are not being achieved and that such disparities -- between the
accomplishment of over-all objectives as compared with goals for specific
products -- may well characterize the trend in production of rolled steel
during the remainder of the plan period.
.The variety of steel mill products apparently is not increasing as
rapidly as planned. A Soviet technical journal, reviewing progress in
the steel industry in 1959-60, noted that there was an increase of 80 in
the number of rolled shapes being produced but that increases were 'being
accomplished all too slowly." 150/ A similar criticism was expressed in
September 1961 by a spokesman for the State Committee on Automation and
Machine Building of the Council of Ministers, USSR, who also was highly
* An increase of 42 percent above 1958 was planned. 149/
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critical of the quality of steel supplied to the machine building in-
dustry. 151/ Complaints appeared in the Soviet press in January 1962
concerning deficiencies in supplies and in the quality of large-diameter
pipe. 152/
The installation of additional rolling mills and other facilities
planned for 1959-65 should alleviate but will not necessarily solve
the steel industry's problems in providing steel mill products that
satisfy consumers' requirements. To a large extent these problems
originate in basic concepts of the centralized planning system. Pro-
duction in the steel industry is planned in physical terms -- that is,
tons of rolled steel or tons of cold rolled sheet -- rather than in
terms of products of specific grades with specified tolerances and per-
formance characteristics. This concept, which is designed to assure
the availability of a sufficient tonnage of steel mill products to meet
rapidly increasing requirements, had more validity in early stages of
Soviet economic development than it has now or will have in the future.
Because it provides rewards for tons of output rather than for quality
and variety of output, this concept has become increasingly inadequate
to assure supplies of steel that meet the more demafiding requirements
of steel-consuming industries.
State standards for steel mill products could be modified to meet
consumers' requirements, and such revisions are being made. The pricing
system for steel mill products could be revised to widen the application
of extra charges for products meeting specifications above those for
standard products. Neither of these approaches is likely to solve the
problem, however, unless at the same time the planning of production is
altered to provide incentives for quality and variety as well as for tons
of output. Such changes in planning may well be forced in the future by
the cost, to tile economy, of continuing a method of planning that is
wasteful of materials, manpower, and capital.
V. Foreign Trade
During the first half of the Seven Year Plan, Soviet foreign trade in
ferrous metallurgical raw materials and products followed essentially the
same pattern as in prior years. The USSR continued to be a net exporter
of raw materials and rolled steel to the European Satellites, a net ex-
porter of rolled steel to Communist Asia, and a net importer of rolled
steel from the industrial West. Exports and imports of principal com-
modities are shown in Table 7.* The geographic distribution of trade
in rolled steel is shown in Table 8.**
* Table 7 follows on p. 30.
** Table 8 follows on p. 31.
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Estimated Exports
by the Ferrous
Table 7
and Imports of Raw Materials and Products
Metallurgical Industry in the USSR 2/
1955-60
Thousand Metric Tons
Commodity
1955-57
12/
1958
1959
1960
Exports
Imports
Exports
Imports
Exports
Imports
Exports
Imports
Iron ore
9,752
0
11,919
o
13,446
o
15,182
0
Manganese ore
858
0
833
979
973
Chromite
212
0
215
272
427
Nickel 2/
5.3
Negl.
5.8
Negl.
6.1
4.6
6.3
8.2
Molybdenum c
N.A.
1.1
N.A.
2.6
N.A.
2.8
N.A.
3.0
Tungsten c
Negl.
22
0.7
28
0.7
30
2.2
30
Cobalt
0.137
N.A.
0.209
N.A.
0.199
N.A.
0.217
N.A.
Ferroalloys
100
4
110
5
131
2
155
13
Coke 1/
1,457
5
1,739
o
1,836
o
1,988
Pig iron
1,262
411
1,046
160
1,433
138
1,801
208
Steel mill products
2,002
613
2,411
949
2,696
1,200
2,996
1)531
a. Source 153/ unless otherwise indicated.
b. Average per year.
c. Estimated.
d. Excluding the following amounts of Polish coke shipped to East Germany on the Soviet account
(appearing in Soviet import and export statistics): average for 1955-57, 469,000 tons; for 1958,
678,000 tons; for 1959, 630,000 tons; and for 1960, 658,000 tons.
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Table 8
Exports and Imports of Steel Mill Products
by the USSR, by Geographic Area
1955-60
Thousand Metric Tons
Area
1955-57 12/
1958
1959
1960
Exports
Imports
Exports
Imports
Exports
Imports
Exports
Imports
Sino-Soviet Bloc
European Satellites
1,121
169
1,679
215
1,947
311
2,229
356
Communist Asia
386
30
281
67
224
13
235
26
Total Bloc
1,507
199
1,960
282
2,171
324
2)-i-64
382
Industrial West
123
406
89
662
140
854
162
1,099
Underdeveloped areas
74
0
37
o
344
o
307
o
Unknown
77
7
-7
5
Total
2L___ 002
_
613
2,411
949
2,696
1_L___ 200
2,996
1,531
a. 154/
b. Average per year.
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Soviet imports of pipe have increased substantially, particularly
imports of large-diameter welded pipe and other pipe required by the
petroleum and natural gas industries, as indicated in Table 9.* Most
of the large-diameter pipe imported in 1959-61 was 1,020-mm pipe for
major Soviet pipelines which the USSR, until near the end of 1961,
did not produce. The principal supplier was West Germany, whose ship-
ments to the USSR amounted to about 480,000 tons in 1959-61. The USSR
contracted for 240,000 tons of 1,020-mm pipe from Italy to be delivered
during 1961-63, of which 30,000 tons were to have been shipped in 1961.
The USSR also has a contract to purchase 135,000 tons of this size pipe
from producers in Sweden, with deliveries to be made in 1961-64.
Continued access to Western supplies of 1,020-mm pipe would minimize
for the USSR the adverse effects of delays in developing domestic capacity
to produce this pipe, thus facilitating the construction of pipelines re-
quiring 1,020-mm pipe in spite of the inadequacy of Soviet pipe-making
capacity. The ability to import other sizes of large-diameter pipe from
the West affords the USSR an opportunity to obtain optimum utilization
of its pipe mill capacity, inasmuch as facilities capable of making 820-mm
pipe, for example, also must be used to make pipe of smaller diameters.
Late in 1961 the USSR contracted with firms in Western Europe to fur-
ther prOcess semifinished products shipped to Western mills from the USSR.
Almost 200,000 tons of hot rolled coils were to be re-rolled into cold
rolled sheet at mills in the UK 155/ and 200,000 tons at mills in West
Germany, 156/ with deliveries to the USSR scheduled for 1962. In addition,
the USSR contracted to supply billets, valued at $2 million, to be rolled
into bars and wire rods, half to be procured in West Germany and the re-
mainder elsewhere in Western Europe. 1E/ These transactions would in-
volve heavy transportation costs and, depending on the provisions of the
contracts, could be relatively expensive for the USSR. Aside from the
costs involved, they reflect the lag in developing rolling capacity in
the USSR.
The USSR began importing nickel from Free World sources in 1959 fol-
lowing the relaxation of COCOM controls, such, imports totaling about
16,000 tons in 1959-61. The principal sources were France and Canada.
Purchases from Canada were discontinued at the end of-19611 the cancel-
lation coinciding with the availability of nickel oxide produced at
properties in Cuba formerly owned by the US. It is estimated that pos-
sibly as much as 9,000 tons or more of nickel (metallic content) were
obtained from Cuba in 1961.
* Table 9 follows on p. 33.
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Table 9
Exports and Imports of Steel Mill Products by the USSR 2/
1955-60
Thousand Metric Tons
Product
1955-57 12/
1958
1959
1960
Exports
Imports
Exports
Imports
Exports
Imports
Exports
Imports
Rails
150
11
187
0
201
0
204
Rail accessories
63
3
35
o
50
o
44
Beams, channels, and piling
144
o
126
o
137
o
103
Structurals, sections
338
165
422
268
46o
261
502
293
Structurals, construction steel
89
90
92
210
130
191
125
260
Sheet and plate
590
114
728
209
714
162
865
276
Tool steel and sectional steel
3
2
4
2
4
2
4
5
Stainless steel sheet and sections
3
o
4
1
5
17
6
15
Dynamo steel
6
7
9
17
8
18
10
22
Transformer steel
6
6
8
27
8
26
lo
41
Galvanized sheet
lo
10
10
7
14
o
17
Tinplate
15
N.A.
19
N.A.
27
N.A.
40
N.A.
Wire rods
59
52
55
49
66
16
86
23
Oil line pipe
loo
38
106
73
96
163
89
186
Welded pipe (large diameter)
7
71
22
8o
24
249
18
266
Rolled pipe
42
13
36
2
36
48
4o
58
All other pipe and tube 2/
50
8
51
2
56
40
58
69
All other steel mill products
327
23
497
2
660
7
775
17
Total
2L___ 002
_
613
2,11.11
949
2,696
1_L___ 200
2,996
1,531
a. 158/
b. Average per year.
c. Including the following exports and imports of
the average per year in 1955-57 was 1,449; in 1958,
imports, the average per year in 1955-57 was 2,512;
thin-walled pipe (in thousand meters): for exports,
1,082; in 1959, 2,025; and in 1960, 2,928, and for
in 1958, 1,000; in 1959, 13,500; and in 1960, 24,800
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