Feb. 26, 2007 (China Knowledge) – According to the China Iron & Steel Association (CISA), China steel makers in 2006 made a combined profit of RMB 170 billion, 30% higher than 2005, seeing figures that make it the best year for the industry.

With strong economic growth, especially with fast urbanization and the building of infrastructure, the need for steel in China has been surging. In 2006, China produced 404 million tons of pig iron, 19.8% higher than 2005. The production of crude steel reached 419 million tons, 18.5% higher than 2005. In 2006, pig iron and crude steel produced by China accounted for 46.6% and 33.8% of the world’s total production respectively.

Even though China is considered a giant steel maker as a country, the market itself is rather fragmented. In 2006, only two companies produced more than 20 million tons of steel products. Further industry consolidation is expected in 2007.