China's biggest steel producer, the Baoshan Iron and Steel Co., Ltd., reported a net profits of 3.68 billion yuan (477 million U.S. dollars) in the first quarter this year, up 156.38 percent from the same period last year.

The earnings per share rose 156 percent to 0.21 yuan, according to the quarterly report filed by the Shanghai-listed unit of Shanghai Baosteel Group Corporation on Thursday.

The country's largest steel producer gained 1.37 billion yuan in net income the same period last year, with 0.08 yuan in earnings per share. The company reported net profits of 13.01 billion yuan in 2006, up 2.7 percent year on year.

Price hikes in steel products and efficiency measures increased its profit margins, according to the report.

The company forecast a rise in net income of more than 50 percent in the first half of 2007, as new projects would be put into production and prices of production materials like carbon steel would stay low, it said.

The group has planned to boost annual production capacity to 30million tons by 2010 and become one of the top three steel producers in the world.

China has more than 6,600 steel producers. The output of the four largest only accounts for 18.5 percent of the national total.

The other three top Chinese steel manufacturers include Wuhan Iron and Steel (Group) Corporation, Angang Steel Co., Ltd. and Shougang Group, formally known as the Beijing Capital Iron and Steel Group.

The government plans to establish two or three conglomerates each with an annual production exceeding 30 million tons by 2010, according to the steel industry policy issued by the National Development and Reform Commission in 2005.