GENERAL BACKGROUND INFORMATION ON THE IRON AND STEEL INDUSTRY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP61-00391R000100090009-2
• Release Decision: RIFPUB
• Original Classification: C
• Document Page Count: 4
• Document Creation Date: December 9, 2016
• Document Release Date: July 13, 1998
• Sequence Number: 9
• Content Type: REPORT

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General Background Information on tie Iron and Steel Industry
The ferrous metallurgical industry, in addition to the production of iron and
steel, includes the mining and preparation of raw and alloying materials consumed
in such production. The principal raw materials of the industry are iron ore,
manganese ore, metallurgical coke, and limestone. The ores and concentrates of
chromium, cobalt, molybdenum, nickel, tungsten, columbium (niobium), titanium, and
vanadium constitute the principal alloying materials. The iron and steel industry
processes these materials into finished rolled, cast, and forged shapes for con-
sumption by the manufacturing, construction, and other industries.
The principal components of the industry are as follows:
Ores
Concentrates
Ferroalloys
Metallurgical
coke
Pig iron
Rolled steel
Forgings
Castings
Type of Facility
Open cast (open pit, open cut), underground (shaft)
mines.
Crushing, washing, beneficiating (enriching) plants,
agglomerating, sintering and pelletizing facilities.
Smelters, electric and blast furnaces, refineries.
By-product and beehive coke ovens.
Blast furnaces, rotary kilns (Krupp'-Rena process).
Open hearth (Siemens-Martin) furnaces, converters,
(Bessemer, Thomas, oxygen), electric furnaces,
Rolling mills blooming and slabbing, plate, bar,
rod, sheet, strip, pipe, tube, rail, structural,
etc.
Presses, hammers, etc.
Pig iron is produced in two major categories: conversion pig iron for con-
sumption in the production of steel and foundry pig iron, for use in the production
of iron castings.
Crude and finished steel are produced in multitudinous variations of carbon
(mild, Siemens-Martin, Thomas, etc.) and alloy grades. Alloy steels rarely
account for more than 8 to 10 percent of total crude steel tonnage but their higher
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The Ferrous MetallurgicalIndustry of Hungary (October 1958)
The ferrous metallurgical industry of Hungary lacks an adequate domestic supply
of raw materials and is in need of modern processing equipment. Because of low
labor productivity and indifferent technology, the industry operates inefficiently
and at high cost, requiring heavy subsidization. In spite of these deficiencies,
the production of crude steel in 1957 of 1.375 million tons, 845 percent of that of
the European Satellites, supplied the Hungarian economy with approximately 90%
of the steel products consumed by the machine building, manufacturing, and other
industries which are substantial exporters as well as the principal means of domestic
industrialization.
Of the raw materials needed for the making of iron and steel, domestic production
is able to supply only limestone and manganese in sufficient quantities. Deposits of
low grade iron ore are being depleted rapidly, and approximately 80 percent of the iron
ore consumed is imported, principally from the USSR. Reserves of coking coal are
limited and are not suitable for the production of high grade metallurgical coke.
More than 90 percent of requirements of metallurgical coke are Imported from Poland
and Czechoslovakia. Production of pig iron is supplemented by shipments from the
USSR and Communist China. All alloying materials are imported, almost entirely from
the Sino-Soviet Bloc.
Production of rolled steel is augmented by imports of plate, sheet and tubing,
largely from Austria and West Germany. Imports of sheet and plate should be elimi-
nated by 1963, if the hot and cold sheet mills are completed on schedule at the
Danube Metallurgical Combine in Sztalinvaros
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Questions on the Ferrous Metallurgical Industry of Hungary
The following questions are grouped in descending order of priority. All relate
to IPC basic requirements and targets.
Plans for Development
a. Background
Specific information on the Three Year Plan, 1958-1960, and on
long range plans for the ferrous metallurgical industry of Hungary is lacking.
The information available indicates that investments in heavy industry during the
Three Year Plan are to be 90x3 percent of total industrial investments as compared
to 92.2 percent originally allocated for the Five Year Plan (1956-~o). The pre-
liminary allocation of investments, however, indicates a marked shift to the
electric power industry at the expense of the engineering and metallurgical indus-
tries. Investments in the metallurgical industry are scheduled to drop from 20.4
percent to 7.8 percent of total industrial investments and are to be used princi-
pally for the continuation of the construction of the Danube Metallurgical Combine,
Sztalinvaros, and. for the modernization of the Lenin Iron and Steel Plant, Diosgyor.
Production goals are to be cut back from the original 1960 goal ' 2.24 million
tons of crude steel to approximately a 30 percent increase over 1957 production, or
about 1.8 million tons of crude steel. Authoritative information on development
plans of the metallurgical industry of Hungary is essential to an assessment of the
future role of the industry in the national economy.
b . Questions
For the Three Year Plan, 1958-1960, and for the yearly plans
1. Production goals for all raw materials, iron ore, manganese,
metallurgical coke, and iron and steel products.
2. Investments in the various components of the industry, such
as iron ore and manganese mining, metallurgical coke, and
individual iron and steel plants.
3. Rate of growth.
4. Planned coefficients of utilization of blast furnaces and open
hearth furnaces for the industry as a whole.
5. Introduction of new technological processes, such as the
installation of high top pressure and the use of controlled
moisture in the blast furnaces, the use of oxygen for fuel
enrichment and for carbon reduction in open hearth and elec-
tric furnaces, and the installation of the oxygen converter
process of making steel.
6. For long range plans, to 1975, the above information as it may
be available,
7?
Indications, other than the lowered investment allocation, of
a de-emphasis of the expansion of the Hungarian iron and steel
industry as a result of CEMA planning or for other reasons.
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2. Production and Distribution of Iron and Steel
a. Background
Although reports are received occasionally on the amounts produced
and the consumption of the individual types of steel in Hungary, annual reports on
the product mix and the distribution of steel products, including castings and
forgings, are not available. Information of this nature may throw some light on
the capability of the industry to support the production of military hard goods.
b. Questions
1. Annual production of semifinished and finished steel, by
type of product, for the industry as a whole.
2. Annual production of alloy steel, by grade, shape, and
class.
Annual reports of the distribution of semifinished and
finished steel, by type of product, to consumer group,
including ordnance and other military items, and to
export.
Costs and Prices
Background
The ferrous metallurgical industry of Hungary operates ineffi-
ciently, at a high cost and is subsidized heavily by the government. Authoritative
reports on costs and prices, to permit an analysis of the industry, are not available.
b. Questions
1. The average cost of producing one ton of iron ore, mangan-
ese ore, metallurgical coke, pig iron, crude steel, and the
various types of rolled steel.
2. An annual breakdown of the total costs of operating the
industry into materials, services, wages and employment
benefits, amortization, and other costs.
3. The current price list of iron and steel products and the
prices per ton paid for imported iron and steel products.
4. the total number of employees and the wage bill of the
ferrous metallurgical industry annually, broken down into
administrative (above the enterprise level), engineering
and technical personnel, administrative and office per-
sonnel (at the enterprise level), blue collar-workers,
and others (including apprentices, servicing attendants
and watchmen).
The annual cost to the government of subsidizing the
industry.
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