China Armco Metals Inc announced that Armet Renewable Resource Company Ltd its wholly owned subsidiary has signed a contract to supply a major Chinese steel producer with up to 230,000 tonnes of scrap steel in 2010.
The contract calls for the delivery of up to 23,000 tonnes of scrap steel per month for 10 months beginning in March 2010. Based on the current spot price of scrap steel, this supply contract is valued at over USD 100 million.
The management of China Armco Metals anticipates this supply contract will allow the company to sell all of the initial production from its recently completed 1 million tonnes recycling facility during the first several months of operation. In addition, management anticipates the recycling facility to reach a full capacity run rate sometime in the fourth quarter of 2010. At full capacity, the facility is capable of processing about 1 million tonnes of scrap steel per year. This is over USD 400 million annually at current spot prices for scrap steel.
Mr. Kexuan Yao chairman and CEO of China Armco Metals stated that “We are very excited to have secured such a sizable contract with this leading steel producer. 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.”
China Armco Metals Inc is engaged in the sale and distributi