"Say "steel" to the average person and he or she will think of Pittsburgh. The average steel maker, however, will think of Detroit. And this year, those thoughts will not bring a smile to his face.

The automobile industry is in the middle of a severe slump that rivals the one it faced in the disastrous 1974-75 recession. As a result, the outlook for the steel industry in 1980 is, in a word, bleak.

For steel, the nation's basic metal, depends heavily on automobiles, the nation's basic industry. In 1978, nearly 22 percent of the steel industry's sales were to the automobile industry.

With car sales slumping in the last half of 1979, the auto makers took only 19.4 percent of steel shipments in the first nine months of 1979 and in recent months, according to Merrill Lynch's Charles Bradford, automakers have accounted for less than 16 percent of the stell industry's business.

If that weren't enough, most other major steel markets are expected to cut back their demand for the metal as well.

Business spending on plant and equipment is due to decline sharply in 1980. According to most analysts, production also will be curtailed. More than 60 percent of the industry's sales are related to so-called capital expenditures such as new plants, machinery and building.

Furthermore, with home building and apartment construction on the decline as well, the demand for appliances such as refrigerators, washers and dryers also will nosedive. Appliance manufacturers and automakers are the major users of the steel industry's most important product: flat-rolled steel.

Steel demand is declining despite the Carter administration's program that sets minimum prices for steel imports, but the decline goes beyond U.S. boundaries.

Indeed, the steel industry claims to be so disenchanted with the so-called trigger price program that it is ready to abandon it in favor of using the laborious method of filing anti-dumping complaints against what it considers unfair foreign pricing.

David M. Roderick, chairman of U.S. Steel Corp., the nation's biggest producer, said last month that the company is preparing to file a slew of anti-dumping complaints against European and Japanese steel makers. What 1980 promises, in other words, is a year of declining production of steel. U.S.Steel forecasts that the industry's shipments will fall to 90 million tons in 1980, from the 98 million tons it shipped in 1978 and 1979.

That will mean a serious decline in profits for an industry that is not all that profitable to begin with. It portends some big layoffs and an acceleration of closings of outdated and marginal facilities.

Merrill Lynch's Bradford anticipates that one or more of the smaller "big" steel companies will either go bankrupt or merge with another company.

Already, Kaiser Steel -- the nation's ninth largest -- has held merger talks with a larger Japanese company. While Kaiser, the only major steel company based on the West Coast, could not come to terms with Nippon Kokan, the two companies are maintaining a "close relationship" that observers think could blossom into a merger at some point down the road. Kaiser has lost money on its steel making for each of the past 13 quarters.

Although steel prices rose about 10 percent in 1979, costs rose even faster. Some analysts think costs of producing steel rose 13 to 15 percent in 1979.

Steel demand was high in the early months of the year, but it levelled off in the summer and has been declining ever since, how about 10 percent below its May levels.

As costs continue to accelerate and slack demand puts pressure on prices, steel executives will have to think seriously about the novel, no-strike pact that nine major producers and the United Steel workers have agreed to.

The so-called experimental negotiating agreement was signed in 1974 and renewed in 1977. In it, the steel workers pledge no nationwide strike in return for significant wage guarantees at the start of bargaining for the next pact (which commences in February).

Many major steel executives, such as U.S. Steel's Roderick, are having second thoughts about the ENA. Roderick said early last month that the price of labor peace may be too high.

Both union leaders and steel executives fear a nationwide strike. It was during the 119-day walkout in 1959 that foreign producers got a toe-hold in the U.S. market that they enlarged every three years as U.S. purchasers built up inventories in anticipation of strikes that never occurred.

In the process, many domestic users found they liked doing business with foreign steel companies, who often undercut U.S. prices, especially during periods of slack demand.

U.S. Steel said it has not yet made the decision to abandon the ENA -- and much of Roderick's public musings may be posturing -- but if the giant should decide to opt out of the ENA, the rest of the industry probably would be forced to go along.

Because of the ENA there is no threat of a strike in 1980 and heavy financial guarantees are on the table already before bargaining commences.

But worker demands for further increases may be moderated by the recent spate of closings -- and attendant layoffs -- that have swept the industry in recent years.

In late November, U.S. Steel announced that it would close 16 facilities, eliminating 13,000 jobs. In the past few years other big steel producers -- such as Bethlehem and Jones & Laughlin -- have closed major operations.

Last year, U.S. Steel asked workers at three of its fabricating plants to take a three-year wage freeze and opt out of the basic steel agreement. The company said it could not remain competitive otherwise. The workers refused.

But at two of the plants the vote was reconsidered after U.S. Steel announced the facilities would be closed as promised. In return, U.S. Steel changed its mind about closing the two plants and instead closed a third one where workers stuck to their guns.

Wage freezes or not, however, 1980 will be a year in which declining steel production will trigger further closings.

Only Inland Steel, the nation's sixth-biggest producer, is optimistic about 1980. The company, isolated from much import competition and probably the best-run company in the industry with a single plant on Lake Michigan near Chicago, always is the most optimistic about the future.

Inland said late last month that it anticipates industry shipments to reach 98 million tons again.

"They always generalize about the industry from their own experience," said one major competitor.

It is not clear, however, where Inland's optimism comes from this year.

Inland sells 32 percent of its product to the nation's auto producers -- more than any major steel maker.