Things sure can change in two years.

In the summer of 1975, American steel makers, if not jubilant, were happy. A big-profit year in 1974 convinced them that the long-run outlook for their industry was good. Today that ebullience has diminished as many of the same factors which made steel executives despondent in 1972 have returned, primarily imports and low profits.

But long-run prospects for the steel industry remian good, according to Thomas C.Graham, president of Jones and Laughlin Steel Corp., who worries nonetheless that the low-profit steel companies will be unable to come up with the funds needed to modernize and expand.

Today's problems reflect the world'wide recession which has jolted the U.S. hard and foreign countries even harder, he says. Some of his colleagues may be wringing their hands more than the facts merit, Graham suggests.

"Steel is a cyclical industry," according to Graham. "When things are going good, people think they'll never be bad again and when they're bad, people feel they'll never be good again."

Things have been going bad recently.

Vast quantities of foreign-made steeel again are coming in. Profits have deteriorated markedly for almost all major companies. Demand is down for many products despite two years of recovery. Industry and administration officials again have clashed over steel prices.

Compounding the industry's difficulties, the expensive no-strike buyout of labor peace also may have been for naught as more than 15,000 ore workers walked off their jobs in Michigan and Minnesota last week, despite what the industry contends is a prohibition of such walkouts under the national pact with the United Steel Workers. Naturally, the steel workers disagree.

Two years ago, after 15 years of losing business and profits to foreigners, domestic producers were coming off the best two years the industry had put together in decades. And many of them thought the industry was on the way up, apparently never to falter again.

Although a severe recession had hit the economy, and steel orders were expected to fall in 1975 (as indeed they did), steel executives and observers brought a new lens to the glasses they wore when examining the battered U.S. giant.

The industry, after years of low profitability, was flush with money and confidence. Floating exchange rates had boosted the cost of foreign-made steel, the old nemesis. In 1974, during a period of worldwide steel shortages, wage differentials between the U.S. and foreign producers appeard to be narrowing. Labor peace seemed to be at hand, too, as the United Steel Workers and the major companies had signed an experimental agreement under which the workers agreed not to strike - the year of which, both sides agreed, sent American steel buyers abroad in search of secure supplies - in return for some expensive buyouts on the companies' part. And the United States, unlike Japan especially, was nearly self-sufficient in the raw materials needed to make steel.

Even the stock markets were beginning to awaken to the potential of the industry, so much so that in 1976 several steel companies sold new issues of stock for the first time in 25 years.

Steel executives dusted off expansion plans shelved by years of low profits and by late 1975 had announced designs on installing as much as 23 million tons of new steel-making capacity by 1980.

About 10 million tons of that expanded capcity have been put in place over the last few years, according to Fordham University economist an steel expert Rev. William T. Hogan, S.J. Another 5 million to 6 million tons will be put in place, although companies will not spend the money as fast as originally planned (stretching out the investment).

But, Father Hogan says, about 6 million tons of that expansion has been cancelled by the downturn in the steel industry in 1975 that has continued in many products until the present.

After the industry shipped a record 111.5 million tons in 1973 and a near record (and much more profitable) 109.5 million tons in 1974, its shipments plunged to 80 million tons in 1975 ad 89.5 million tons last year. Things have no gotten much better this year.

Today steel companies are reporting low profits - for the second quarter, Bethlehem, after U.S. Steel Corp. the largest producer, reported a pre-tax loss - and low orders. Shipments this year are up only marginally over last year.

Imports, on the other hand, are gaining an increasing share of the United States market: 18.2 per cent in May and 17.4 per cent in June compared with 12.6 per cent in April and 12.1 per cent in March.

The plight of the steel industry is that it is desperately dependent on volume, notes one government economist. The United States industry, for example, although it has producing plant that on balance is technologically inferior to the Japanese facilities, can turn out steel as efficiently as Japan when it produces at the same rate of capacity utilization.

But in times of worldwide gluts of steels, as now, the American industry claims foreign steel makers dump their excess production in the largest open steel market they can find: the United States. To induce U.S. buyers to purchase foreign-made steel, these foreign steel companies sell at prices well below those charged by U.S. procduders, American executives complain.

American steel companies contend that foreign steel producers are as concerned with keeping their employment up as they are with making a profit and that, when their domestic demand falls, they continue to produce falls, they continue to produce steel even though they may lose money on the sales.

"Take British Steel Corp.," said J&L's Graham. "Ask anybody in the international steel community who is the most inefficient, highest-cost producer, and the unanimous agreement will be British Steel Corp. But British Steel Corp. will put one million tons of steel in the U.S. market this year."

The American Iron and Steel Institute, the industry trade group, launched a massive assault on imports last May at its annual meeting, releasing a study by a consulting firm that showed that foreign companies sell below cost in the United States.

But the study, by Putnam, Hayes and Bartlett, Inc., also documents that Japan is now a more efficient producer of steel - in terms of output per hour worked and also in terms of material inputs per ton of steel, even though Japan must import nearly all the raw materials it uses in its steel industry.

American steel makers deny that they have been left in the technological dust by Japan, but argue that they have not been able to take advantage of new technology as fast (much of which has been developed in the United States) because of a shortage of investment capital and less need to build new, expensive plants from scratch. American steel makers also have been unable to take advantage of economies of scale by building, say, massive blast furnaces because American plants are not big enough to handle the iron output from such giant blast furnaces.

But even with Japan's first rate equipment, given comparable operating rates, American producers would be able to match Japanese productivity, Graham and other steel executives say.

But critics of the industry both in and out of government contend that until th American industry wants to become price competitive boosting prices when demand is high and lowering prices when demand falls off - the American industry will always lag.

Charles L. Schultze, chairman of the President's Council of Economic Advisers, has acknowledged that steel companies too often are the target of federal grousing about their pricing policies. At the same time, Schultze has said, when American steel companies try to raise prices during periods of weak demand as they announced last month, they are hurting themselves in their attempt to become competitive on international markets.

Although the Council on Wage and Price Stability calculates steel companies are producing structural steel at only 55 per cent of capacity and despite a growing incursion of structural steel imports, the major companies last month announced large price increases on the steel used in heavy construction.

Whether those prices will stick in a weak market is one thing: Many observers think they will not. But the fact that the steel companies tried to raise prices during weak demand is indicative of their lack of desire to be price competitive, one government economist observed.

Steel men have another explanation. Their costs are rising amore rapidly than their prices and they must cover costs to produce. Furthermore, it would not matter to foreigners what price American producers charged. Foreigners would undercut that price when they wanted to sell steel in the American market, they say.

But the same factors that excited steel makers in 1975 exist today. Many countries including Japan, have scaled back their expansion plans so that, depending on the state of the world economy, the steel glut that has existed in most of the last 15 years (except for 1973 and 1974) may disappear.

In the short run, the recent decline in the American dollar will make foreign steel even more expensive and lower the cost of exports (although the steel industry does not sell much steel abroad.)

Furthermore, although the U.S. economy is expected to slow a bit, investment appears to be picking up. While the most visible uses of steel may be in appliances and cars, fully two-thirds of the nation's production is used to make bridges, machinery and other business equipment.

Notes one critic of the industry. "They (steel makers) can iron out a lot of their problems if they operate at high rates of utilization.