Plant closings, fired workers and layoffs have emerged the new symbols of Big Steel in America, replacing the fire-belching furnaces that once stood as the pride of the nation's industrial might.

America's steel-making capacity has been cut by 16 percent over the past seven years, from its peak of 160 million tons in 1977 to 134.4 million tons this year. In the last two years alone, major plants such as U.S. Steel's South Chicago and Homestead works and Bethlehem Steel's Lackawanna Works -- which as recently as 10 years ago employed almost 50,000 people -- have effectively ceased operation.

In the past decade, moreover, the number of steel industry employes has been cut more than half, from 512,000 in 1973 to 243,000 last year. Most of those job losses have been caused by plant closings and layoffs, but others were the result of the industry becoming more productive, using 15 percent fewer man hours to produce each ton of steel.

Another 1,200 workers lost their jobs as a result of this spring's merger of Republic Steel Corp. with LTV Corp., and as many as 400 more may go before the end of the major restructuring of this new giant -- which has replaced Bethlehem as the country's second-largest steel company.

And even more wrenching plant closings are needed if the American steel makers are to become internationally competitive in a world in which the demand for steel decreases by about 2 percent a year, according to a host of studies, including one released in July by the nonpartisan Congressional Budget Office.

The harsh reality is that the big integrated steel companies that took iron ore, limestone and coal, put them through a process resembling Dante's Inferno, and produced steel products to feed America's industrial might are becoming industrial dinosaurs in the 1980s.

"There's really no hope for the big integrated companies in the United States," said Charles A. Bradford, the well-informed, highly respected steel analyst for Merrill Lynch, Pierce, Fenner & Smith Inc. "Throwing money on that industry can't be justified. It's throwing good money after bad. . . . That's what the guys in Washington don't understand."

"The outlook for the major American steel companies is not promising for the longer term," said Donald F. Barnett, the former chief economist of the industry's trade association, the American Iron and Steel Institute (AISI), who has turned into one of its most potent critics.

He predicts a rosier picture for a reconstituted steel industry that will continue the wrenching process of closing outmoded plants. But Barnett, now with the World Bank, said that Big Steel must go beyond closing facilities to concentrate on producing high-quality products instead of all types of steel.

"Integrated producers must specialize in the high-valued, more sophisticated grades of flat products and heavy structurals, where labor cost disadvantages are outweighed by product quality strengths," Barnett said.

He sees the old-line steel giants at odds with smaller and more modern companies, especially so-called "minimills," which now supply 16 to 20 percent of the American market.

"Unfortunately, what is good for the big steel companies is not necessarily good for the steel industry, and vice versa," Barnett said.

He is not alone in that view. Brookings Institution economist Robert W. Crandall sees "no hope" in modernizing the present steel industry or building any new integrated plants.

"Modernizing many of the existing plants makes as much sense as retrofitting the Maginot Line in order to bring a modernized France back into NATO," he said. "On the other hand, there is no cause for alarm. Out of the ashes of Youngstown and Johnstown a new steel industry is rising."

This, of course, is not the view put forward by executives of Big Steel, who maintain that the major cause of the industry's problems is surging imports (though they admit a role for high labor costs and insufficient capital investment as well).

Their solution is to limit imports to 15 percent of the U.S. market -- the object of an industry-supported bill in Congress and a trade complaint filed by Bethlehem and the United Steelworkers. President Reagan has until Sept. 24 to act on an International Trade Commission recommendation that would give the industry some import relief, but less than it wants.

"Five years of effective and comprehensive relief will allow the industry to invest, modernize, introduce new technologies and otherwise upgrade its facilities and practices to world-class standards," said Bethlehem Steel Corp. Chairman Donald H. Trautlein.

"The steel industry's modernization continues to fall below the level required, and will continue to do so until an effective trade policy for steel is put into place," added U.S. Steel Corp. Chairman David M. Roderick.

Meanwhile, foreign steel makers, fearful that the Reagan administration or Congress will limit their sales in the United States, are pouring their products into this country. July steel imports reached an all-time high of 2.7 million tons, an estimated one-third of the American market.

"The economic recovery is passing us by," Trautlein said. "Clearly, surging imports have completely undermined any opportunity for improved operating levels for American producers."

Industry critics, however, disagree that limiting imports is the answer for America's steel industry. Reagan administration officials, who strongly '' Steel companies forecast drops in demand, but I don't see them doing anything to stop it. 0.000 PTS LEFT ''oppose the quota bill, say restricting foreign steel will remove the incentive for the industry to undergo the painful restructuring process needed for diminished steel needs of the 1980s.

The Federal Trade Commission, the Congressional Budget Office and consumer groups charge that quotas will increase the price of steel while making industries that use steel less competitive here and in world markets. In a study strongly disputed by the steel industry, the CBO says that quotas "would increase prices, output and employment in the domestic steel industry but would generate offsetting losses in the rest of the economy."

Foreign governments have threatened to retaliate with restrictions on U.S. exports, and Canadian Trade Minister Francis Fox told U.S. Trade Representative William E. Brock last week that his government already has prepared a "hit list" of American products.

Farmers fear they will be hardest hit. The American Soybean Association estimates farm exports last year were almost six times greater than the value of foreign steel sold in the United States. Overseas sales of soybeans alone were 1 1/2 times greater than the amount of imported steel.

Meanwhile, an ominous sign has emerged for American steel makers: Incoming orders have been dropping since March, and a predicted July and August upturn has not yet fully materialized. Bradford suggested that the softness in new orders may be due to fears of an auto strike by parts suppliers who apparently are less willing to stockpile steel than car producers themselves.

"Normally, by this time of the year, orders for steel would be on a sharp seasonal upswing that usually begins late in July," Merrill Lynch's Bradford wrote in last week's "Research Comment." "So far this year, based on data we collect from each company individually, there has not been a measurable upswing, although data for the week ending Aug. 19 show what could be the start of such a recovery," he continued.

This falloff in orders has increased costs, "and in some cases profit margins have evaporated," he said. As a result, Bradford has reduced his latest estimates of steel company earnings and now predicts losses for some companies. The industry lost $6.8 billion in the past two years when it went through its worst recession in 33 years.

On the bright side, however, he sees steel industry productivity climbing, although he disputes estimates by other analysts and the industry that it now matches Japan's. "We believe the 30 percent [cost] disadvantage of the U.S. steel makers compared to the Japanese has been reduced to about 10 percent," he said.

Bradford's solution for the industry is simple: Instead of trying to cut imports, it should work to increase the demand for its product the way other industries, such as aluminum, have done.

"Steel companies forecast drops in demand, but I don't see them doing anything to stop it," Bradford said. "The trick in my mind is to get demand growing. Quotas do the reverse" by decreasing demand through increased prices, the substitution of other materials and the increased importation of products made with cheaper foreign steel, such as Japanese cars, he said.