China''s steel industry profit surges to $22 billion in 2006

26 Feb 2007

Mumbai: China's iron and steel industry saw its profit surge 30 per cent year on year to a record $22 billion in 2006, figures provided by the China Iron and Steel Industry Association said.
China accounted for 33.79 per cent of the total global steel production, at 418.78 million tonnes of crude steel in 2006, up 18.48 per cent year on year. The country also accounted for 46.6 per cent of the total world pig iron production, at 404.17 million tonnes last year, up 19.78 per cent year on year.

The iron and steel industry secured 279.5 billion yuan in pre-tax profit in 2006, an increase of 23.95 per cent over the previous year, amid robust market demand and a construction boom, the association said.

China's stainless steel output jumped by a whopping 68 per cent year on year to 5.3 million tonnes, ranking the first in the world, figures released by the Chinese Special Steel Association said.

China's iron and steel industry has undergone a consolidation phase, directed by the governments' macro economic policies, vice president of the China Iron and Steel Industry Association Luo Bingsheng said.

He said the strict measures adopted by Chinese government since 2004 to curb surging investments in the industry, including closing some steel mills, has helped the industry shape up.

Rising steel prices also brought huge funds into the industry. Most of the country's steel giants now are state-controlled.

China emerged the world's largest exporter of steel last year, with an export volume of 43 million tonnes. China imported 2.5 million tonnes of stainless steel products in 2006, down 20.13 per cent.

China, however, is witnessing a fall in exports since December and the declining trend is expected to continue throughout the year. The negative trend in exports from December 2006 to January 2007 has been attributed to a slowdown in production and reduction in tax rebates. Net exports of rolled steel and steel billets are expected to decrease by 10 million tonnes for the whole year.

China exported 4.38 million tonnes of steel in January, up 142.2 per cent on last year. But the figure decreased by 21 per cent from December last year, reports quoting customs figures said.