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^ ’ Approved For Release 2000/08/22 : CIA-RDP61 -00391 R0001 0009001 1-9 

General Background Information on the 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, colurribium (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 t 

Product 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-Renn process). 

Open hearth (Siemens -Martin) furnaces, converters, 
(Bessemer, Thomas, oxygen), electric furnaces. 

Rolling mills -- blooming and slabbing, plated bar, 
rod, sheet, strip, pipe, -tube, rail, structural, 

Presses, hammers, etc. 

Foundries . 

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 
value and strategic significance add to their importance. 






Pig iron 
Crude steel 

Rolled steel 



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The Ferrous Metallurgical Industry of Hungary (October 1958) 

!Ehe ferrous metallurgical industry of Hungary lacks an adequate domestic supply 
of raw materials and is in need of modem 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, 8*5 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 
i ndus trial! zati on * 

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. 

1. Plans for Development 

a . Background 

Specific information on the Three Year Plan, I958-I96O, 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 90 * 3 percent of total industrial investments as compared 
.to 92 o2 percent originally allocated for the Five Year Plan (1956-60). 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 i960 goal ff 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 

as available; 

For the Three Year Plan, 1958 -i960, 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 o 

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 . 

3» 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 . 

3* Costs and Prices 

a , Background 

Hie 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) * 

5. The annual cost to the government of subsidizing the 
industry . 

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