SOURCE: China Direct Industries, Inc.

September 28, 2010 16:37 ET

China Direct Industries Receives Magnesium Contracts Valued at $6.5 Million

Management Sees Recent Surge in Magnesium Prices Being Advantageous for Its International Magnesium Group (IMG) Pricing Strategy

DEERFIELD BEACH, FL--(Marketwire - September 28, 2010) -  China Direct Industries, Inc. ("China Direct Industries") (NASDAQ: CDII), a U.S. owned holding company operating in China in two core business segments, pure magnesium production and distribution of basic materials, announced today that it recently received several magnesium contracts valued at approximately $6.5 million to be delivered by the end of calendar year 2010.

Prices of pure magnesium have recently surged to over $2,900 per metric ton FOB China, an increase of over 7% in the past two weeks. This is mainly due to the rising price of ferrosilicon, one of the key raw materials in the magnesium production process. Many ferrosilicon producers are experiencing rolling blackouts as part of the Chinese government's initiative to meet their yearend energy savings target. This has caused a shortage of ferrosilicon supply resulting in a price increase of more than $200 per metric ton. In a market where magnesium supplies have been declining, the uncertainty of ferrosilicon pricing has caused many magnesium producers to refrain from offering long term contracts. International Magnesium Group, our wholly owned subsidiary is, however, able to provide long term magnesium supply contracts based on our innovative cost indexed pricing formula, as we ramp up our production in both Baotou Changxin Magnesium and Taiyuan Chang Magnesium facilities in the coming months.

Commenting on the contracts, Dr. James Wang, Chairman and CEO of China Direct Industries, Inc., stated, "We are excited to receive these recent contracts during a time of uncertainty in the magnesium market. We also believe balance will be restored in the magnesium markets as other metals markets have begun to strengthen due to improving global demand and we see prices returning to more sustainable levels in the range of $3,000 to $3,300 per ton FOB China in the coming months. We are also confident that IMG's cost indexed pricing guarantee and shipment commitments will allow IMG to gain additional market share during this time of price strengthening amid supply disruptions and we intend to aggressively pursue sales opportunities as we position our magnesium operations for future growth."

About China Direct Industries, Inc.

China Direct Industries, Inc. (NASDAQ: CDII), is a U.S. owned holding company operating in China in two core business segments, pure magnesium production and distribution and distribution of basic materials in China. China Direct Industries also provides advisory services to China based companies in competing in the global economy. Headquartered in Deerfield Beach, Florida, China Direct Industries operates 9 subsidiaries throughout China. This infrastructure creates a platform to expand business opportunities globally while effectively and efficiently accessing the U.S. capital markets. For more information about China Direct Industries, please visit


In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, China Direct Industries, Inc., is hereby providing cautionary statements identifying important factors that could cause our actual results to differ materially from those projected in forward-looking statements (as defined in such act). Any statements that are not historical facts and that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, indicated through the use of words or phrases such as "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "intends," "plans," "believes" and "projects") may be forward-looking and may involve estimates and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. These statements include, but are not limited to, our expectations concerning market prices of our magnesium products and our ability to gain market share.

We caution that the factors described herein could cause actual results to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. This press release is qualified in its entirety by the cautionary statements and risk factor disclosure contained in our Securities and Exchange Commission filings, including our Transition Report on Form 10-K for the fiscal year ended September 30, 2009.

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