QualityStocks would like to highlight
Armco Metals Holdings (
NYSE: AMCO), engaged in the sale and distribution of metal ore and non-ferrous metals throughout China, and the recycling business in China. Customers include some of the fastest growing steel producing mills and foundries throughout China. Raw materials are acquired from a global group of suppliers located in various countries, including, but not limited to, Brazil, India, Indonesia, Ukraine, and the United States. Armco Metals' product lines include ferrous and non-ferrous ore, iron ore, chrome ore, nickel ore, magnesium, copper ore, manganese ore, steel billet, and recycled scrap metals.
In the company’s news,
Armco Metal Holdings announced its entrance into a steel supply agreement with Hong Kong-based Midland Resources (China) Company Limited (Midland Resources). Midland Resources serves as the exclusive agent for Shagang Steel Group for sale of its steel products in Hong Kong markets.
Midland Resources posting fulfillment of sales of over 400,000 tons of steel products for the steel group in 2013. Shagang Steel Group is known as one of the largest importers of steel scrap in China.
In the agreement, Armco Metal Holdings will serve as a sourcing agent for Midland Resources for Midland Resources’ importation of scrap steel into China. Midland Resources is able to use its import licenses and financing capabilities for importation of scrap steel for direct processing by Armco Metal Holdings.
With this processing capability in place, Armco Metal Holdings is strongly positioned for strengthened cash flow and expansion of its processing capabilities. Armco Metal Holdings believes that the agreement is a solid first step toward it becoming a processing base for both Midland Resources and Shagang Steel Group.
Commenting on the agreement, Kexuan Yao, Chairman and CEO of Armco Metal Holdings, stated, “Steel scrap is the only raw material in short supply in the steel industry, however, the challenges faced by declining steel prices has placed a huge burden on the whole industry supply chain. This situation has severely hampered our working capital in second half of 2013 as we were faced with customer defaults and declining inventory values. Our management team has reacted by implementing a strategic plan to establish a ‘platform strategy’ to help stabilize margins and achieve sustained profitability. Our profits, by nature, are mainly generated from scrap processing fees at our plant and this agreement with Midland allows for our new partner to manage much of the cash outlay for the importing and transportation of the steel scrap so we can increase our throughput in a far more profitable way.”
Yao continued, “We believe that this importing partnership with Midland will be a win-win scenario for both companies for years to come. Additionally, we are seeking environmental regulatory approval to increase our importing license from 5,000 tons to 20,000 which we expect to receive in 2014. We see this as an important move for future expansion when steel markets cyclically recover and our cash flow improves.”
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Forward-Looking Statement:
This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Risks and uncertainties applicable to the company and its business could cause the company's actual results to differ materially from those indicated in any forward-looking statements.
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