Longhai Steel Inc a producer of high-quality steel wire products in the People's Republic of China, today announced it commenced initial production of high quality steel wire in its second production facility at the end of the second quarter of 2012. The Company expects to ramp production of high quality steel wire to full capacity by the end of 2012.

The Company's 600,000 MT production facility, completed in the third quarter of 2011, is located in Hebei, China, the largest steel producing province in the country. The state-of-the-art facility has a high-speed production line capable of producing a wide variety of conventional and higher value steel wire. Longhai Steel sold all of the initial production to a major distributor in Hebei for domestic and export markets, which significantly reduces the transportation costs and inventory risks. The Company has also received positive feedback and indications of interest from other distributors regarding future orders.

Mr Steven Ross Executive Vice President of Longhai Steel said "We are pleased with the smooth production ramp at our second facility. Since we commenced test production, we have met or exceeded all of our internal performance and production goals. We will complete testing by early August and commence volume production by the end of the third quarter. The addition of high quality steel wire from this facility will expand our customer base, diversify our end market exposure and boost our margins."