It's tempting to characterize 2007 as the year of consolidation in the metals industry. But if there's a good reason not to, it's because there's every chance that what we've seen during the past year will pale in comparison to what might take place in 2008. As long as the China-fueled commodities boom lasts, there will be demand for natural resources—and producers, profiting from high prices, will have money to spend on acquiring competitors, suppliers or customers.

The steel, aluminum, copper and scrap sectors have all experienced major consolidation during the past year. But if the players in any one of those sectors need any reminder that the consolidation process probably still has some distance to run, they need look no further than recent events in the iron ore industry.

The potential takeover by BHP Billion of Anglo-Australian rival Rio Tinto has caused quite a storm, and rightly so. Steel mills, particularly in China, are concerned about a potential combination of the second- and third-largest producers of a key raw material. But steel producers not reliant on Australian iron ore, and even...