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Inserted on 06 03 2010 by dimaggio. EN - International news
Site URL : money.cnn.com
China Armco Metals enters into scrap steel supply contract with major China steel producer.
China Armco Metals, Inc., a distributor of imported metal ore and metal recycler with a new state of the art scrap metal recycling facility in China, announced that Armet Renewable Resource Company, Limited, the Company's wholly owned subsidiary, has signed a contract to supply a major Chinese steel producer with up to 230,000 tons of scrap steel in 2010. The contract calls for the delivery of up to 23,000 metric tons of scrap steel per month for 10 months beginning in March of 2010. Based on the current spot price of scrap steel, this supply contract is valued at over $100 million.
Management anticipates this supply contract will allow the company to sell all of the initial production from its recently completed 1 million ton recycling facility during the first several months of operation. Additionally, management anticipates reaching a full capacity run rate sometime in the fourth quarter of 2010. At full capacity the facility is capable of processing approximately 1 million metric tons of scrap steel per year or over $400 million annually at current prices.
Commenting on the supply contract, Mr. Kexuan Yao, CEO and Chairman of China Armco Metals, Inc., stated, "We are very excited to have secured such a sizable contract with this leading steel producer. This essentially has pre-sold the first several months of production from our newly opened facility as we ramp up capacity over the coming quarters. We are confident that this contract coupled with our other operations will enable our company to experience significant revenue growth and enhanced earnings power for the foreseeable future."
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