China Gerui Comments on China's Steel Industry Restructuring Policy

     China Gerui Comments on China's Steel Industry Restructuring Policy

PR Newswire

ZHENGZHOU, China, Jan. 27, 2014

ZHENGZHOU, China, Jan. 27, 2014 /PRNewswire-FirstCall/-- China Gerui Advanced
Materials Group Limited (NASDAQ: CHOP) ("China Gerui," or the "Company"), a
leading high precision, cold-rolled steel producer in China, today commented
on the Chinese Government's recent accelerated initiatives to restructure its
steel industry.

"The planned restructuring of the steel industry places China Gerui in a
beneficial position by regaining a much needed supply-demand equilibrium in
the sector which would stabilize pricing over the long-run," said Mr. Mingwang
Lu, Chairman and CEO of China Gerui. "We believe that as a high-end niche
cold-rolled specialty steel producer, we will have the opportunity to enter
new markets with improved raw material availability and cost structure which
will ultimately result in improved gross margins over time."

China's 12th Five-Year Plan is emphasizing merger and acquisition activity in
the steel industry to create larger, more efficient steel companies with a
greater emphasis on high-end steel products. China's steel industry is the
world's largest, but its estimated oversupply of approximately 100 to 200
million tons and fragmented structure has resulted in its inability to win
pricing concessions from large international iron ore producers. Following the
third Plenary Session of the 18th CPC Central Committee held in November 2013,
China has accelerated its initiatives in restructuring the steel industry with
the objective to reduce overall steel production capacity by 80 million tons
before 2018. The government's determination has been evidenced by the recently
announced capacity reduction in Hebei Province whose total output accounts for
approximately twenty-five percent of the national output.

The Government's new policy is to merge smaller producers or to shut them down
completely, which will also have the effect of strengthening the bargaining
position of Chinese steel companies with the industry's large international
iron ore raw material suppliers.It can be expected that as the steel
supply-demand ratio moves into equilibrium, steel prices will recover from
historical lows and combined with lower negotiated material costs, higher
profitability and margins should result for remaining Chinese steel producers.

Further, according to China's Ministry of Information and Information
Technology, approximately 400 million tons of steel producing capacity in
China out of a total production capacity of 970 million never received full
approval from the national Development and Reform Commission or fulfilled
other legal requirements such as permission to access loans among other
necessary requirements. It is likely that while some of this illegal capacity
will be allowed to become legal, other operations will be terminated.

The planned consolidation of the steel industry is focused on the upper stream
of the value chain, which will beneficially impact raw material suppliers to
companies like China Gerui. The resulting higher raw material costs should
eliminate low efficiency, poorly capitalized cold-rolled steel producers which
would provide an opportunity for China Gerui to capture additional market
share.With its high-technology, high-end cold- rolled steel products, the
Company looks to be a beneficiary of the planned changes and is
well-positioned to penetrate new markets to generate substantial future
growth.

Mr. Mingwang Lu, Chairman and CEO of China Gerui, commented, "We are in the
enviable position of being a premier high-end specialty steel producer where
our business objectives are completely aligned with the Government's
restructuring plans.Once the Chinese steel industry begins to regain its
supply-demand balance, our broad portfolio of high-value, specialty steel
niche products will enable us to focus on high-growth steel markets, increase
the utilization of our capacity and generate greater profitability. We are
confident that a rational operating environment will allow us to more fully
realize our revenue growth and earnings capabilities enabled by the successful
execution of our strategic growth plan."

About China Gerui Advanced Materials Group Limited

China Gerui Advanced Materials Group Limited is a leading niche and high
value-added steel processing company in China. The Company produces high-end,
high-precision, ultra-thin, high-strength, cold-rolled steel products that are
characterized by stringent performance and specification requirements that
mandate a high degree of manufacturing and engineering expertise. China
Gerui's products are not standardized commodity products. Instead, they are
tailored to customers' requirements and subsequently incorporated into
products manufactured for various applications. The Company primarily sells
its products to domestic Chinese customers with an emerging presence with
international customers in a diverse range of industries, including the food
and industrial packaging, construction and household decorations materials,
electrical appliances, and telecommunications wires and cables. For more
information, please visit http://www.geruigroup.com.

Safe Harbor Statement

Certain of the statements made in this press release are "forward-looking
statements" within the meaning and protections of Section 27A of the
Securities Act of 1933, as amended and Section 21E of the Securities Exchange
Act of 1934, as amended, or the Exchange Act. Forward-looking statements
include statements with respect to our beliefs, plans, objectives, goals,
expectations, anticipations, assumptions, estimates, intentions, and future
performance, and involve known and unknown risks, uncertainties and other
factors, which may be beyond our control, and which may cause the actual
results, performance, capital, ownership or achievements of the Company to be
materially different from future results, performance or achievements
expressed or implied by such forward-looking statements. All statements other
than statements of historical fact are statements that could be
forward-looking statements. You can identify these forward-looking statements
through our use of words such as "may," "will," "anticipate," "assume,"
"should," "indicate," "would," "believe," "contemplate," "expect," "estimate,"
"continue," "plan," "point to," "project," "could," "intend," "target" and
other similar words and expressions of the future.

All written or oral forward-looking statements attributable to us are
expressly qualified in their entirety by this cautionary notice, including,
without limitation, those risks and uncertainties described in our amended
annual report on Form 20-F for the year ended December 31, 2012 and otherwise
in our SEC reports and filings.Such reports are available upon request from
the Company, or from the SEC, including through the SEC's Internet website at
http://www.sec.gov. We have no obligation and do not undertake to update,
revise or correct any of the forward-looking statements after the date hereof,
or after the respective dates on which any such statements otherwise are made.

Company Contact:          Investor Relations
                           Contacts:
Email:                     Vivian Chen              Kevin Theiss
investors@geruigroup.com
Website:                   Managing Director         Account Director
www.geruigroup.com
                           Grayling                 Grayling
                           Phone: 646-284-9427      Phone: 646-284-9409
                           Email:                    Email:
                           vivian.chen@grayling.com kevin.theiss@grayling.com

SOURCE China Gerui Advanced Materials Group Limited

Website: http://www.geruigroup.com
 
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