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Longhai Steel Inc. Announces Record Fourth Quarter Production and Sales


January 26, 2012 - Xingtai City, China

Longhai Steel Inc. ("Longhai") (OTCBB: LGHS), a producer of high quality steel wire products in the People's Republic of China, today announced record Fourth Quarter 2011 output and sales volume of steel wire.

With additional capacity beginning to come on line from its newly-opened second production facility, Fourth Quarter 2011 steel wire output was 293,862 Metric Tons, up 23% from 238,912 Metric Tons in the same period of 2010. Fourth Quarter 2011 steel wire sales volume was also a record at 335,229 Metric Tons, up 30% from 257,871 Metric Tons in the same period of 2010.

Once fully ramped, Longhai's new production line will increase overall capacity by approximately 60%. The new line also has the capability to produce alloy steel, cold forging steel and welding rods. This new, higher margin product will allow Longhai to address demand in markets in addition to construction and infrastructure.

Mr. Steven Ross, Executive Vice President of Longhai, said, "This increase in capacity is part of our long term corporate growth strategy. The higher quality steel wire from this facility will diversify our product base, and give us the ability to maintain our growth trajectory in 2012."

About Longhai Steel Inc.

Longhai Steel Inc., is a leading producer of high-quality steel wire. Downstream manufacturers process Longhai's wire into screws, nails, and wire mesh used to reinforce concrete and for fencing. Longhai's newly opened second production line also produces higher quality steel wire for specialized applications such as steel wire rope, steel strand, steel belted radial tires, and steel welding rod. All of its sales are delivered in China. Longhai competes using advanced production equipment and process technology, high product quality, fast order fill, and competitive prices. Its rolling and drawing facilities are among the most advanced in the world.

Safe harbor statement

Certain statements in this news release are forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. These forward-looking statements can be identified by terminology such as "anticipate," "believe," "could," "estimates," "expect," "future," "intends," "may," "plans," "should," "will," and similar statements.

The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding China's economic growth, general industry conditions including local supply and price of wire, environmental risks, Longhai 's business or growth strategy, the success of Longhai 's investments, risks, and uncertainties regarding fluctuations in earnings, its ability to sustain its previous levels of profitability including its ability to manage growth, intense competition, wage increases in China, its ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, its ability to successfully complete and integrate potential acquisitions, withdrawal of governmental financial incentives, political instability and regional conflicts, and legal restrictions on raising capital or acquiring companies outside China. Although Longhai believes that its expectations stated in this press release are based on reasonable assumptions, actual results may differ from those projected in the forward-looking statements. Although these expectations and the factors influencing them will likely change, we are under no obligation to inform you if they do. These and additional risks that could affect Longhai 's future operating and financial results are more fully described in its filings with U.S. Securities and Exchange Commission. These filings are available at www.sec.gov.

Longhai may, from time to time, make additional written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 10-K, 10-Q, and 8-K, in its annual report to shareholders, in news releases and other written materials, and in oral statements made by its officers, directors, or employees to third parties. Longhai does not undertake to update any forward-looking statements that may be made from time to time by or on its behalf, except as required by law.

For more information, please contact:

Longhai Steel Inc.
Steven Ross
(English)
Telephone: 949-720-1265
sross@longhaisteelinc.com

Cindy Han
(English and Chinese)
Telephone: +86-139-3099-8773
dhan2625@163.com

MarketWire

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