Crude steel output in China, the world's largest steel producer, surged 18.48 percent year-on-year to reach 418.78 million tons last year, according to the nation's top economic planning agency.

The National Development and Reform Commission said in a report that production of pig iron in China jumped 19.78 percent on the year-on-year basis to 404.17 million tons, while the output of steel products was up 24.45 percent to 466.85 million tons.

The commission said that in spite of macroeconomic policies, the nation's steel sector in China still expanded fast due to huge market demand boosted by the booming economy.

It noted that a large number of illegal and backward steel firms have been established across the country since 2003 to cash in on the huge business opportunities.

The government will focus on restructuring and closing the small, heavy-polluting steel companies and reducing energy consumption in the steel industry in the coming four years through 2010, according to the commission.