Increased Production of TISCO Expected to Increase Market Demand for BEIC

Increased Production of TISCO Expected to Increase Market Demand for BEIC

February 16, 2007

    TAIYUAN, China, Feb. 16 /Xinhua-PRNewswire/ -- Beicang
Iron & Steel Inc. (OTC Bulletin Board: BEIC)
("BEIC" or the "Company") announced
today that following an announcement from Taiyuan Iron
& Steel (Group) Company Ltd. ("TISCO")(
http://www.tisco.com.cn ) concerning the increase in the
total output volume of stainless steel products again from
1 million tons to 3 million tons after the increase in its
production by 1.5 million tons annually, the Company
believes that this increase will result in a significant
increase in its own revenues.  BEIC is a China-based iron
and steel raw materials supplier that supplies
ferrochromium alloy, among other products, to TISCO. 
    TISCO, the largest stainless steel producer in mainland
China, currently ranking 8th worldwide, produced 6.26
million tons of steel in 2006, generating US$6.6 billion in
sales revenue and US$859 million in pre-tax profits.  TISCO
has previously announced that in September 2006, it began
increasing its production of stainless steel by 1.5 million
tons annually, which will increase its output of stainless
steel from 1 million tons to 3 million tons.  As a result,
annual sales revenue is expected to reach US$ 10.1
billion.
    TISCO's increased output is expected to bring a strong
market demand for the raw material.  TISCO is one of the
largest clients of Pinglu County Changhong Ferroalloy Co.,
Ltd ("PL"), which annually has provided most of
its 400,000 tons of ferrochromium alloy products to TISCO. 
BEIC, through its wholly owned subsidiaries, provides
exclusive management, consulting and other general business
operation services to PL in return for a service fee which
is equal to 95% of PL revenue, less operational cost and
fees.
    Mr. Hou Beicang, Chairman of the Board of Directors and
CEO of BEIC, stated, "Currently, the Chinese iron and
steel industry is facing a shortage of raw material supply.
 This situation will worsen as a result of TISCO's, proposed
significant increase in its production capacity.  Demand of
ferrochromium alloy is expected to increase to 600,000 tons
annually; whereas BEIC's current annual production capacity
of ferrochromium alloy is only 40,000 tons.  We intend to
enlarge PL's production capacity to take advantage of this
opportunity presented by TISCO's proposed increased
production."  If PL is able to increase its production
capacity to meet this demand by TISCO, the results should
prove beneficial to BEIC's financial performance in 2007.

    About Beicang Iron & Steel Inc. (
http://www.bcironsteel.com )
    BEIC is a Nevada corporation that is a public reporting
company in the US.   It is focused on providing elementary
refined raw materials to iron and steel enterprises.  The
main products of the Company include pelletized ore and
ferrochromium alloy products, which are essential for
iron-making and stainless steel production.  The Company
produces pelletized ore and ferrochromium alloy through its
two subsidiaries in Shanxi province, P.R. China, Fanshi
County Xinyu Iron Resource Co. Ltd. ("FS") and
Pinglu County Changhong Ferroalloy Co. Ltd.
("PL").  These two companies are currently
operated by Bestlink Management Consulting Co., Ltd
("Bestlink"), a wholly owned subsidiary of
Beicang. PL and FS have been capable of annual production
capacity of 400,000 tons of pelletized ore and 40,000 tons
of ferrochromium alloy, respectively.  For more information
about BEIC, please visit http://www.bcironsteel.com .

    Safe Harbor Statement 
    Certain of the statements set forth in this press
release constitute "forward-looking statements." 
Forward-looking statements include, without limitation, any
statement that may predict, forecast, indicate, or imply
future results, performance or achievements, and may
contain the words "estimate,"
"project," "intend,"
"forecast," "anticipate,"
"plan," "planning," "expect,"
"believe," "will likely,"
"should," "could," "would,"
"may" or words or expressions of similar meaning.
Such statements are not guarantees of future performance and
are subject to risks and uncertainties that could cause the
company's actual results and financial position to differ
materially from those included within the forward-looking
statements. Forward-looking statements involve risks and
uncertainties, including those relating to the Company's
ability to grow its business.  Actual results may differ
materially from the results predicted and reported results
should not be considered as an indication of future
performance.  The potential risks and uncertainties
include, among others, the Company's limited financial
resources, domestic or global economic conditions --
especially those relating to China, activities of
competitors and the presence of new or additional
competition, and changes in Federal or State laws,
restrictions and regulations on doing business in a foreign
country, in particular China, and conditions of equity
markets.  More information about the potential factors that
could affect the Company's business and financial results is
included in the Company's filings, available via the United
States Securities and Exchange Commission.

    For more information, please contact:

     Address: 8/F Beicang Building, 
              76 Jianshebei Road, Taiyuan City, 
              Shanxi Province, P.R. China 030013
     Tel:     [phone]
     Fax:     [phone]
     Email:   [e-mail]
     Website: http://www.bcironsteel.com


 



SOURCE  Beicang Iron & Steel Inc.