If the global steel industry is to be sustainable and create value into the future, the Chinese steel industry must consolidate, Aditya Mittal, president and CFO of Mittal Steel Co. told a London conference on Nov. 29. Mittal Steel is the world's largest steel producing company. Among the world's nations, China is the largest single-country producer and consumer of steel.
Mittal described the Chinese steel industry as "very fragmented," a contrast to the what he termed the "considerable consolidation" of the industry in North America and Europe. "The benefits of this consolidation are now visible with producers adopting a more market-oriented approach to their business." For example, "for the first time in the history of the steel industry we have been able to sustain value in an over-supply environment by temporarily cutting production." However, China's fragmented market makes it "very difficult for producers to cutback on production in the same way it has been possible for the European and American producers," Mittal said.