China Armco Metals Inc., with a U.S. office in San Mateo, Calif., has announced that its wholly owned subsidiary, Armet Renewable Resource Co. Ltd., has signed a contract to supply a major Chinese steel producer with up to 230,000 tons of ferrous scrap in 2010. The contract calls for the delivery of up to 23,000 metric tons of scrap steel per month for 10 months, starting in March.
China Armco anticipates the 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 during the fourth quarter of 2010. At full capacity, the facility is capable of processing about 1 million metric tons of scrap steel per year.
“We are very excited to have secured such a sizable contract with this leading steel producer,” says Kexuan Yao, chairman and CEO of China Armco. “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.”