General Steel Holdings Up 20% On First Direct Iron Ore Supply Agreement, Lower Costs

China-based General Steel Holdings (GSI) inked its first direct supply agreement with Rio Tinto Iron Ore Asia Pts Ltd, which will provide GSI’s Longmen Joint Venture at least 1.5 million metric tons of imported iron ore at a favorable price.

Pricing will be based on the average monthly iron ore index upon delivery.

The steel producer’s CEO Henry Yu stated, “The ability to directly procure from one of the world’s largest supplier will significantly lower our sourcing costs and ensure timely delivery of the highest quality imported iron ore. We believe the large guaranteed supply coupled with pre-determined favorable pricing terms provides us with more operational flexibility and greater cost advantages.”

GSI shares are up 20% at $1.32 per share on 480.000 shares, twice average daily volume, in afternoon Monday trading. The stock trades in the upper half of a 52-week price range of $0.80 – $1.58 per share.

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