Today before the
opening bell, Armco Metals announced its subsidiary Armco (Lianyungang)
Renewable Metals, Inc. was on a list of companies that have received approval
for operation in the scrap steel processing industry. The list of companies was
published by China’s Ministry of Industry and Information Technology on June
16, 2014. It contains only 131 companies in total and signifies the final step
in Armco Metals’ attainment of approval for entering into China’s scrap steel
processing industry by the ministry.
Since September
2012, the Ministry of Industry and Information Technology came up with a set of
stringent policies binding across many company facets as necessary standards
for a company to enter into China’s scrap steel processing industry. Known as
the “Standards for Entering the Scrap Steel Processing Industry”, these
standards include policies for corporate layout, construction requirements,
scale, technology and equipment, product quality, energy consumption and
resource utilization, environmental protection, training of personnel,
production safety, occupational health, social responsibility, supervision, and
management. In 2013, Armco (Lianyungang) Renewable Metals attained Model Scrap
Processing and Distribution Center” status from the Chinese Scrap Application
Association, and earlier in 2014, it attained ministry authorization for market
entry.
Armco Metals sees
this as a company milestone because of the small number of companies that have
been noted to be capable of operating within the policy guidelines. The Chinese
government has been pushing for strengthened policies regarding efficiency and
environmental responsibility, and Armco Metals is strategically positioned for
taking advantage of those policy shifts. The policy shift toward environmental
responsibility is forecasted to help promote scrap metal as a market
alternative to iron ore for production purposes. At present, scrap steel usage
in the Chinese steel industry is only about 8%, or approximately one-seventh of
the scrap steel usage in the U.S. and Europe.
Kexuan Yao, Chairman
and CEO of Armco Metals Holdings, stated, “We continue to see progress at our
Renewable Metals subsidiary as we work to position our Company for the future.
Our efforts have resulted in this important inclusion in the list of approved
operators that we believe will pay big dividends down the road as the
Government looks to increase industrial efficiency while reducing pollution.
China’s scrap industry has been slow to develop due to many producers opting to
use less costly and more pollutive production methods. As the government
implements these new initiatives, we see steel producers moving to models that
more closely resemble that of the U.S. and Europe which should lead to
significant need for scrap steel produced by the small circle of companies who
are approved by the government to operate in this industry.”
For more
information, visit: www.armcometals.com
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