China Wind Systems To Supply ESR Products to Shanghai Jing An

China Wind Systems Inc. has signed a preliminary agreement with Shanghai Jing An Metal Materials Co. Ltd. to supply 12,000 tons of electroslag remelted (ESR) products for wind turbines. The company will deliver the ESR product order to Shanghai Jing An during a two-and-a-half year period commencing approximately in March 2010 after construction of the company’s ESR production line is completed.

Under the contract, the current selling price per ton for ESR products is approximately RMB ¥20,000-28,000. However, the final price is subject to prevailing market rates. Although the preliminary agreement does not specify delivery dates, the company expects to deliver the first 4,000 tons in 2010.

Given the size of the purchase order, China Wind Systems anticipates that the contract will utilize almost all of its ESR production capacity during the approximate two-and-a-half year period to supply the 12,000 tons of product.

“This contract, representing our first order for our new ESR production line, validates our strategic decision to enter into this product segment,” said Jianhua Wu, chairman and CEO of China Wind Systems. “We are committed to supplying high quality ESR products and anticipate growing this business over time.”

ESR is a steel making process that takes place when a rolled or a cast ingot in the form of an electrode is remelted in a water cooled copper mold. The melting is activated by resistive heat generated in a conductive slag. The resulting product has a similar basic chemical composition to the original ingot, but is characterised by high purity and low inclusion content. Typical applications include high integrity components for the wind energy industry.

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