10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2013

or

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from                 to

Commission File Number 001-33717

General Steel Holdings, Inc.

(Exact name of registrant as specified in its charter)

Nevada	41-2079252
(State or other Jurisdiction of	(I.R.S. Employer Identification No.)
Incorporation or Organization)

Level 21, Tower B, Jia Ming Center

No. 27 Dong San Huan North Road

Chaoyang District, Beijing, China 100020

(Address of Principal Executive Office, Including Zip Code)

+86(10) 5775 7691

(Registrant's Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ¨    No  x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for shorter period that the registrant was required to submit and post such files).  Yes  ¨  No  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ¨ Accelerated filer ¨ Non-accelerated filer  ¨ (Do not check if a smaller reporting company) Smaller reporting company  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨  No  x

As of November 5, 2013, 55,298,732 shares of common stock, par value $0.001 per share, were outstanding.

Table of Contents

		Page
Part I.  FINANCIAL INFORMATION
Item 1.	Unaudited Financial Statements.	3
	Condensed Consolidated Balance Sheets as of September 30, 2013 and December 31, 2012.	3
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Nine months ended September 30, 2013 and 2012.	4
	Condensed Consolidated Statements of Cash Flows for the Nine months ended September 30, 2013 and 2012.	5
	Notes to Condensed Consolidated Financial Statements.	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	41
Item 4.	Controls and Procedures.	63
Part II. OTHER INFORMATION
Item 1.	Legal Proceedings.	64
Item 1A.	Risk Factors.	64
Item 6.	Exhibits.	65
Signatures		66

 

PART I – FINANCIAL INFORMATION

ITEM 1. UNAUDITED FINANCIAL STATEMENTS

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(In thousands)

	September 30,		December 31,
	2013		2012
ASSETS
CURRENT ASSETS:
Cash	$	62,091	$	46,467
Restricted cash		405,781		323,420
Notes receivable		116,900		145,502
Restricted notes receivable		357,250		357,900
Loans receivable - related parties		4,540		69,319
Accounts receivable, net		8,577		6,695
Accounts receivable - related parties		3,252		14,966
Other receivables, net		56,494		8,407
Other receivables - related parties		51,501		68,382
Inventories		177,383		212,671
Advances on inventory purchase		79,855		79,715
Advances on inventory purchase - related parties		29,667		46,416
Prepaid expense and other		1,490		450
Prepaid taxes		16,415		24,116
Short-term investment		2,771		2,619
TOTAL CURRENT ASSETS		1,373,967		1,407,045
PLANT AND EQUIPMENT, net		1,250,542		1,167,836
OTHER ASSETS:
Advances on equipment purchase		21,715		6,499
Long-term other receivable		-		43,008
Investment in unconsolidated entities		1,161		1,166
Long-term deferred expense		713		1,062
Intangible assets, net of accumulated amortization		23,928		24,066
TOTAL OTHER ASSETS		47,517		75,801
TOTAL ASSETS	$	2,672,026	$	2,650,682
LIABILITIES AND DEFICIENCY
CURRENT LIABILITIES:
Short term notes payable	$	987,988	$	983,813
Accounts payable		495,488		352,052
Accounts payable - related parties		172,259		177,432
Short term loans - bank		254,929		147,124
Short term loans - others		130,170		147,323
Short term loans - related parties		48,889		79,557
Current maturities of long-term loans - related party		47,896		54,885
Other payables and accrued liabilities		52,272		54,589
Other payable - related parties		106,153		73,025
Customer deposits		95,695		125,890
Customer deposits - related parties		14,512		21,998
Deposit due to sales representatives		28,184		33,870
Deposit due to sales representatives - related parties		1,809		1,238
Taxes payable		9,716		16,674
Deferred lease income, current		2,178		2,120
TOTAL CURRENT LIABILITIES		2,448,138		2,271,590
NON-CURRENT LIABILITIES:
Long-term loans - related party		24,450		38,088
Long-term other payable - related party		-		43,008
Deferred lease income, noncurrent		75,480		75,079
Capital lease obligations		354,576		330,099
Profit sharing liability		241,090		328,827
Other noncurrent liabilities		1,402		-
TOTAL NON-CURRENT LIABILITIES		696,998		815,101
TOTAL LIABILITIES		3,145,136		3,086,691
COMMITMENTS AND CONTINGENCIES
DEFICIENCY:
Preferred stock, $0.001 par value, 50,000,000 shares authorized, 3,092,899 shares     issued and outstanding as of September 30, 2013 and December 31, 2012		3		3
Common stock, $0.001 par value, 200,000,000 shares authorized, 57,771,038     and 57,269,838 shares issued, 55,298,732 and 54,797,532 shares outstanding     as of September 30, 2013 and December 31, 2012, respectively		58		57
Treasury stock, at cost, 2,472,306 shares as of September 30, 2013 and     December 31, 2012		(4,199)		(4,199)
Paid-in-capital		106,405		105,714
Statutory reserves		6,263		6,076
Accumulated deficits		(414,696)		(381,782)
Accumulated other comprehensive income		2,471		10,185
TOTAL GENERAL STEEL HOLDINGS, INC. DEFICIENCY		(303,695)		(263,946)
NONCONTROLLING INTERESTS		(169,415)		(172,063)
TOTAL DEFICIENCY		(473,110)		(436,009)
TOTAL LIABILITIES AND DEFICIENCY	$	2,672,026	$	2,650,682

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

 

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012

(UNAUDITED)

(In thousands, except per share data)

	For the three months ended September 30,				For the nine months ended September 30,
	2013		2012		2013		2012
SALES	$	514,549	$	518,542	$	1,534,330	$	1,441,325
SALES - RELATED PARTIES		95,546		192,883		380,707		698,824
TOTAL SALES		610,095		711,425		1,915,037		2,140,149
COST OF GOODS SOLD		511,932		528,586		1,550,829		1,426,589
COST OF GOODS SOLD -       RELATED PARTIES		89,932		196,435		387,446		693,482
TOTAL COST OF GOODS SOLD		601,864		725,021		1,938,275		2,120,071
GROSS PROFIT (LOSS)		8,231		(13,596)		(23,238)		20,078
SELLING, GENERAL AND       ADMINISTRATIVE EXPENSES		(19,661)		(22,787)		(59,464)		(61,548)
CHANGE IN FAIR VALUE OF     PROFIT SHARING LIABILITY		41,825		-		107,877		-
INCOME (LOSS) FROM     OPERATIONS		30,395		(36,383)		25,175		(41,470)
OTHER INCOME (EXPENSE)
Interest income		2,835		4,337		8,657		13,039
Finance/interest expense		(25,503)		(36,615)		(81,355)		(138,929)
Change in fair value of derivative     liabilities		-		(55)		1		(48)
Gain on disposal of equipment		17		293		113		177
Income from equity investments		47		44		137		80
Foreign currency transaction gain     (loss)		322		(581)		448		(1,169)
Lease income		542		528		1,613		1,588
Other non-operating income     (expense), net		770		2,314		1,559		3,316
Other expense, net		(20,970)		(29,735)		(68,827)		(121,946)
INCOME (LOSS) BEFORE     PROVISION FOR INCOME     TAXES AND     NONCONTROLLING     INTEREST		9,425		(66,118)		(43,652)		(163,416)
PROVISION FOR INCOME TAXES
Current		25		100		201		510
Deferred		-		-		-		169
Provision for income taxes		25		100		201		679
NET INCOME (LOSS)		9,400		(66,218)		(43,853)		(164,095)
Less: Net income (loss) attributable to     noncontrolling interest		5,599		(24,620)		(10,939)		(61,336)
NET INCOME (LOSS)      ATTRIBUTABLE TO GENERAL      STEEL HOLDINGS, INC.	$	3,801	$	(41,598)	$	(32,914)	$	(102,759)
NET INCOME (LOSS)	$	9,400	$	(66,218)	$	(43,853)	$	(164,095)
OTHER COMPREHENSIVE     INCOME (LOSS)
Foreign currency translation     adjustments		(2,547)		(698)		(12,283)		(577)
COMPREHENSIVE INCOME (LOSS)		6,853		(66,916)		(56,136)		(164,672)
Less: Comprehensive income (loss)     attributable to noncontrolling interest		4,782		(24,888)		(15,508)		(61,721)
COMPREHENSIVE INCOME (LOSS)     ATTRIBUTABLE TO GENERAL     STEEL HOLDINGS, INC.	$	2,071	$	(42,028)	$	(40,628)	$	(102,951)
WEIGHTED AVERAGE NUMBER     OF SHARES
Basic and Diluted		55,141		54,466		54,976		54,946
EARNINGS (LOSS) PER SHARE
Basic and Diluted	$	0.07	$	(0.76)	$	(0.60)	$	(1.87)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

 

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012

(UNAUDITED)

(In thousands)

	Nine months ended September 30,
	2013		2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(43,853)	$	(164,095)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Depreciation, amortization and depletion		64,955		62,538
Change in fair value of derivative liabilities		(1)		48
Gain on disposal of equipment		(113)		(177)
Provision for doubtful accounts		(251)		2,316
Reservation of mine maintenance fee		315		3
Stock issued for services and compensation		692		679
Amortization of deferred financing cost on capital lease		27,778		32,363
Income from equity investments		(137)		(80)
Foreign currency transaction gain		(448)		1,169
Deferred tax assets		-		169
Deferred lease income		(1,613)		(1,588)
Change in fair value of profit sharing liability		(107,877)		-
Changes in operating assets and liabilities
Notes receivable		32,138		(99,337)
Accounts receivable		(483)		5,429
Accounts receivable - related parties		11,968		(7,607)
Other receivables		(3,466)		(5,460)
Other receivables - related parties		(55,744)		4,784
Inventories		4,191		73,024
Advances on inventory purchases		1,996		(23,365)
Advances on inventory purchases - related parties		(27,882)		(88,412)
Prepaid expense and other		(1,016)		(183)
Long-term deferred expense		373		119
Prepaid taxes		8,250		4,168
Accounts payable		113,592		(48,059)
Accounts payable - related parties		54,364		31,353
Other payables and accrued liabilities		(3,742)		34,286
Other payables - related parties		(12,844)		95,746
Customer deposits		(33,185)		(9,490)
Customer deposits - related parties		(7,981)		14,740
Taxes payable		(7,317)		(5,195)
Other noncurrent liabilities		1,384		-
Net cash provided by (used in) operating activities		14,043		(90,114)
CASH FLOWS FROM INVESTING ACTIVITIES:
Restricted cash		(72,676)		(35,094)
Loans to related parties		1,460		(69,247)
Cash proceeds from (made to) short term investment		(80)		40
Cash proceeds from sales of equipment		16		19
Equipment purchase and intangible assets		(75,326)		(15,909)
Effect on cash due to deconsolidating of a subsidiary		-		(2,972)
Net cash used in investing activities		(146,606)		(123,163)
CASH FLOWS FINANCING ACTIVITIES:
Capital contributed by noncontrolling interest		18,028		-
Payments made for treasury stock acquired		-		(1,404)
Notes receivable - restricted		10,218		521,866
Borrowings on short term notes payable		1,348,631		1,382,976
Payments on short term notes payable		(1,370,832)		(1,637,570)
Borrowings on short term loans - bank		258,357		237,535
Payments on short term loans - bank		(155,390)		(355,008)
Borrowings on short term loan - others		148,678		160,554
Payments on short term loans - others		(169,558)		(193,964)
Borrowings on short term loan - related parties		362,202		269,362
Payments on short term loans - related parties		(274,718)		(221,134)
Deposits due to sales representatives		(6,521)		11,939
Deposit due to sales representatives - related parties		531		285
Payments on current maturities of long-term loans - related party		(22,856)		-
Net cash provided by financing activities		146,770		175,437
EFFECTS OF EXCHANGE RATE CHANGE IN CASH		1,417		1,426
INCREASE (DECREASE) IN CASH		15,624		(36,414)
CASH, beginning of period		46,467		120,016
CASH, end of period	$	62,091	$	83,602

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

 

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 – Background

General Steel Holdings, Inc. (the “Company”) was incorporated on August 5, 2002 in the state of Nevada. The Company through its 100% owned subsidiary, General Steel Investment, operates steel companies serving various industries in the People’s Republic of China (“PRC”). The Company’s main operation is manufacturing and sales of steel products such as steel rebar, hot-rolled carbon and silicon sheets and spiral-weld pipes. The Company, together with its subsidiaries, majority owned subsidiaries and variable interest entity, is referred to as the “Group”.

On April 29, 2011, a 20-year Unified Management Agreement (“the Agreement”) was entered into between the Company, the Company’s 60%-owned subsidiary Shaanxi Longmen Iron and Steel Co., Ltd. (“Longmen Joint Venture”), Shaanxi Coal and Chemical Industry Group Co., Ltd. (“Shaanxi Coal”) and Shaanxi Iron and Steel Group (“Shaanxi Steel”). Shaanxi Steel is the controlling shareholder of Shaanxi Longmen Iron and Steel Group Co., Ltd (“Long Steel Group”) which is the non-controlling interest holder in Longmen Joint Venture, and Shaanxi Coal, a state owned entity, is the parent company of Shaanxi Steel. Under the terms of the Agreement, all manufacturing machinery and equipment of Longmen Joint Venture and the $603.2 million (or approximately RMB 3.7 billion) of newly constructed iron and steel making facilities owned by Shaanxi Steel, which includes one 400m ² sintering machine, two 1,280m ³ blast furnaces, two 120 ton converters and some auxiliary systems, are managed collectively as a single virtual asset pool (“Asset Pool”). Longmen Joint Venture manages the Asset Pool as the principal operating entity and is responsible for the daily operations of the new and existing facilities.

The Agreement leverages each of the parties’ operating strengths, allowing the Longmen Joint Venture to derive the greatest benefit from the cooperation and the newly constructed iron and steel making facilities. At the designed efficiency level, these new facilities are expected to contribute three million tons of crude steel production capacity per year.

Longmen Joint Venture pays Shaanxi Steel for the use of the constructed iron and steel making facilities an amount equaling the depreciation expense on the equipment constructed by Shaanxi Steel as well as 40% of the pre-tax profit generated by the Asset Pool. The remaining 60% of the pre-tax profit is allocated to Longmen Joint Venture. As a result, the Company’s economic interest in the profit generated by Longmen Joint Venture decreased from 60% to 36%. However, the overall capacity under the management of Longmen Joint Venture has increased by three million tons, or 75%. The Agreement is also expected to improve Longmen Joint Venture’s cost structure through sustainable and steady sourcing of key raw materials and reduced transportation costs. The distribution of profit is subject to a prospective adjustment after the first two years based on each entity’s actual investment of time and resources into the Asset Pool.

The parties to the Agreement have agreed to establish the Shaanxi Longmen Iron and Steel Unified Management Supervisory Committee ("Supervisory Committee") to ensure that the facilities and related resources are being operated and managed according to the stipulations set forth in the Agreement. However, the Board of Directors of Longmen Joint Venture, of which the Company holds 4 out of 7 seats, requires a simple majority vote. Therefore, the Board of Directors of Longmen Joint Venture remains the controlling decision-making body of Longmen Joint Venture and the Asset Pool. See Note 2(c) “Consolidation of VIE.” 

The Agreement constitutes an arrangement that involves a lease which met certain of the criteria of a capital lease and therefore, the lease is accounted for as such by Longmen Joint Venture as a capital lease. See Notes 2 “Summary of significant accounting policies”, 15 “Capital lease obligations” and 16 “Profit sharing liability”.

Note 2 – Summary of significant accounting policies

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). The financial statements include the accounts of all directly, indirectly owned subsidiaries and the variable interest entity listed below. All material intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary to give a fair statement have been included. Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with information included in the 2012 annual report filed on Form 10-K filed on June 17, 2013.

6

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(a) Basis of presentation

The unaudited condensed consolidated financial statements of the Company reflect the activities of the following major directly owned subsidiaries: 

		Percentage
Subsidiary		of Ownership
General Steel Investment Co., Ltd.	British Virgin Islands		100.0	%
General Steel (China) Co., Ltd. (“General Steel (China)”)	PRC		100.0	%
Baotou Steel – General Steel Special Steel Pipe Joint Venture Co., Ltd.	PRC		80.0	%
Yangpu Shengtong Investment Co., Ltd.	PRC		99.1	%
Tianjin Qiu Steel Investment Co., Ltd. (“Qiu Steel”)	PRC		98.7	%
Longmen Joint Venture	PRC		VIE/60.0	%
Maoming Hengda Steel Company, Ltd. (“Maoming Hengda”)	PRC		99.0	%
Tianwu General Steel Material Trading Co., Ltd (“Tianwu Joint Venture”)	PRC		60.0	%

(b) Principles of consolidation – subsidiaries

The accompanying unaudited condensed consolidated financial statements include the financial statements of the Company, its subsidiaries, its variable interest entity (“VIE”) for which the Company is the ultimate primary beneficiary, and the VIE’s subsidiaries.

Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors.  

A VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, bears the risks of, and enjoys the rewards normally associated with, ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity. 

All significant inter-company transactions and balances have been eliminated upon consolidation.

(c) Consolidation of VIE

Prior to entering into the Unified Management Agreement on April 29, 2011, Longmen Joint Venture had been consolidated as the Company’s 60% direct owned subsidiary. Upon entering into the Unified Management Agreement on April 29, 2011, Longmen Joint Venture was re-evaluated by the Company to determine if Longmen Joint Venture is a VIE and if the Company is the primary beneficiary.

Based on projected profits in this entity and future operating plans, Longmen Joint Venture ’s equity at risk is considered insufficient to finance its activities and therefore Longmen Joint Venture is considered to be a VIE.

The Company would be considered the primary beneficiary of the VIE if it has both of the following characteristics:

a.	The power to direct the activities of the VIE that most significantly impact the VIE’s economic performance; and
b.	The obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

A Supervisory Committee was formed during the negotiation of the Unified Management Agreement. Given there is both a Supervisory Committee and a Board with respect to Longmen Joint Venture , the powers (rights and roles) of both bodies were considered to determine which party has the power to direct the activities of Longmen Joint Venture , and by extension, whether the Company continues to have the power to direct Longmen Joint Venture ’s activities after this Supervisory Committee was formed and the significant investment in plant and equipment by owners of the Longmen Joint Venture partner, as discussed in Note 1- “Background”. The Supervisory Committee, which the Company holds 2 out of 4 seats, requires a ¾ majority vote, while the Board, which the Company holds 4 out of 7 seats, requires a simple majority vote. As the Supervisory Committee’s role is limited to supervising and monitoring management of Longmen Joint Venture and in the event there is any disagreement between the Board and the Supervisory Committee, the Board prevails, the Supervisory Committee is considered subordinate to the Board. Thus, the Board of Directors of Longmen Joint Venture continues to be the controlling decision-making body with respect to Longmen Joint Venture. The Company, which controls 60% of the voting rights of the Board of Directors, has control over the operations of Longmen Joint Venture and as such, has the power to direct the activities of the VIE that most significantly impact Longmen Joint Venture ’s economic performance.

7

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

In connection with the Unified Management Agreement, the Company, Shaanxi Coal and Shaanxi Steel may provide such support on a discretionary basis or as needed in the future. See Note 2 item (d) Liquidity.

The Company has the obligation to absorb losses and the rights to receive benefits based on the profit allocation as stipulated by the Unified Management Agreement that are significant to the VIE. As both conditions are met, the Company is the primary beneficiary of Longmen Joint Venture and therefore, continues to consolidate Longmen Joint Venture as a VIE.

The Company believes that the Unified Management Agreement between Longmen Joint Venture and Shaanxi Coal is in compliance with PRC law and is legally enforceable. The Board of Directors of Longmen Joint Venture continues to be the controlling decision-making body with respect to Longmen Joint Venture. The Company, which controls 60% of the voting rights of the Board of Directors, has control over the operations of Longmen Joint Venture and as such, has the power to direct the activities of the VIE. However, PRC law and/or uncertainties in the PRC legal system could limit the Company’s ability to enforce the Unified Management Agreement, which in turn, may lead to reconsideration of the VIE assessment and the potential for a different conclusion. The Company makes ongoing assessment to determine whether Longmen Joint Venture is a VIE.

The carrying amount of the VIE and its subsidiaries’ consolidated assets and liabilities are as follows:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Current assets	$	1,253,672	$	1,285,967
Plant and equipment, net		1,239,805		1,154,811
Other noncurrent assets		44,475		72,428
Total assets		2,537,952		2,513,206
Total liabilities		(3,006,938)		(2,943,761)
Net liabilities	$	(468,986)	$	(430,555)

VIE and its subsidiaries’ liabilities consist of the following:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Current liabilities:
Short term notes payable	$	950,498	$	971,117
Accounts payable		466,631		324,563
Accounts payable - related parties		171,759		177,160
Short term loans - bank		215,955		114,935
Short term loans - others		123,974		141,290
Short term loans - related parties		42,613		35,839
Current maturities of long-term loans – related party		56,372		54,885
Other payables and accrued liabilities		43,978		29,769
Other payables - related parties		96,901		64,941
Customer deposits		94,767		109,120
Customer deposits - related parties		14,512		21,998
Deposit due to sales representatives		28,184		33,870
Deposit due to sales representatives – related parties		1,809		1,238
Taxes payable		8,258		15,339
Deferred lease income		2,178		2,120
Intercompany payable to be eliminated		-		30,476
Total current liabilities		2,318,416		2,128,660
Non-current liabilities:
Long term loans - related parties		15,974		38,088
Long-term other payable – related party		-		43,008
Deferred lease income - noncurrent		75,480		75,079
Capital lease obligations		354,576		330,099
Profit sharing liability		241,090		328,827
Other noncurrent liabilities		1,402		-
Total non-current liabilities		688,522		815,101
Total liabilities of consolidated VIE	$	3,006,938	$	2,943,761

8

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

VIE and its subsidiaries’ statements of operations are as follows:

	Three months ended		Three months ended
	September 30, 2013		September 30, 2012
	(in thousands)		(in thousands)
Sales	$	606,444	$	708,974
Gross profit (loss)	$	8,122	$	(18,417)
Income (loss) from operations	$	32,967	$	(37,000)
Net income (loss) attributable to controlling interest	$	8,284	$	(39,494)

	Nine months ended		Nine months ended
	September 30, 2013		September 30, 2012
	(in thousands)		(in thousands)
Sales	$	1,903,933	$	2,126,556
Gross profit (loss)	$	(23,704)	$	12,628
Income (loss) from operations	$	32,998	$	(40,071)
Net loss attributable to controlling interest	$	(18,335)	$	(92,974)

Longmen Joint Venture has two 100% owned subsidiaries, Yuxin Trading Co., Ltd. (“Yuxin”) and Yuteng Trading Co., Ltd. (“Yuteng”). Prior to March 1, 2012, Longmen Joint Venture had three consolidated subsidiaries, Hualong Fire Retardant Material Co., Ltd. (“Hualong”), Hancheng Tongxing Metallurgy Co., Ltd. (“Tongxing”) and Beijing Huatianyulong International Steel Trading Co., Ltd. (“Huatianyulong”), in which Longmen Joint Venture did not hold a controlling interest. On March 1, 2012, Longmen Joint Venture sold its equity interest in Tongxing, and, as of March 31, 2012, Longmen Joint Venture has two consolidated subsidiaries, Hualong and Huatianyulong, in which it does not hold a controlling interest. Hualong and Huatianyulong are separate legal entities which were established in the PRC as limited liability companies and subsequently acquired by Longmen Joint Venture in June 2007 and July 2008, respectively. Prior to and subsequent to their acquisition by Longmen Joint Venture, these two entities have been operating as self-sustaining integrated sets of activities and assets conducted and managed for the purpose of providing a return to shareholders consisting of all the inputs, processes and outputs of a business. However, these two entities do not meet the definition of variable interest entities. Further consideration was given to whether consolidation was appropriate under the voting interest model, specifically where the power of control may exist with a lesser percentage of ownership (i.e. less than 50%), for example, by contract, lease, agreement with other stockholders or by court decree.

Hualong

Longmen Joint Venture, the single largest shareholder, holds a 36.0% equity interest in Hualong. The other two shareholders, who own 34.67% and 29.33% respectively, assigned their voting rights to Longmen Joint Venture in writing at the time of the acquisition of Hualong. The voting rights have been assigned through the date Hualong ceases its business operations or the other two shareholders sell their interest in Hualong. Hualong’s main business is to supply refractory.

Tongxing

Prior to March 1, 2012, Longmen Joint Venture held a 22.76% equity interest in Tongxing while hundreds of employees of Longmen Joint Venture owned the remaining 77.24%. Each individual employee shareholder comprising the remaining 77.24% assigned its voting rights to Longmen Joint Venture in writing at the time of the acquisition of Tongxing. The voting rights assigned were effective until Tongxing ceased its business operations or Longmen Joint Venture liquidated its equity interest of Tongxing, whichever came first.

9

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

On March 1, 2012, Longmen Joint Venture sold its 22.76% equity interest of Tongxing to two individuals, who are the representatives from Long Steel Group. As of March 1, 2012, Tongxing had a carrying value of net assets of $40.5 million which were included in the consolidated net assets of the Company and a noncontrolling interest in Tongxing of $32.5 million. The Company retained the land use right associated with the Tongxing property adjacent to the Longmen Joint Venture facility, which had a carrying value of $3.6 million immediately prior to the transaction and relinquished its controlling interest in the remaining net assets (primarily operating assets). In connection with the transaction, the Company also settled with a payable in cash of $0.3 million and transferred the dividend receivable of $0.9 million from Tongxing to the two individuals. These arrangements meet the criteria of ASC 810-10-40-6b and 6d, deconsolidation of a Subsidiary with multiple arrangements treated as a single transaction. As the land use rights held in Tongxing have been included as part of the Company’s consolidated assets, this transaction was considered as a change in the Company’s ownership interest in the land use right similar to a change in a parent company’s ownership interest in a subsidiary in accordance with ASC 810-10-45-23 and therefore the carrying value of the land use right was not stepped up to fair value. The net impact of these transactions resulted in a reduction of $3.1 million paid-in capital on March 1, 2012. 

Huatianyulong

Longmen Joint Venture holds a 50.0% equity interest in Huatianyulong and the other unrelated shareholder holds the remaining 50.0%. The other shareholder assigned its voting rights to Longmen Joint Venture in writing at the time of acquisition of Huatianyulong. The voting rights have been assigned through the date Huatianyulong ceases its business operation or the other unrelated shareholder sells its interest in Huatianyulong. Huatianyulong mainly sells imported iron ore.

The Company has determined that it is appropriate for Longmen Joint Venture to consolidate Hualong and Huatianyulong with appropriate recognition in the Company’s financial statements of the non-controlling interests in each entity, beginning on the acquisition dates as these were also the effective dates of the agreements with other stockholders granting a majority voting rights in each entity, and thereby, the power of control, to Longmen Joint Venture. The Company also has determined that it is appropriate for Longmen Joint Venture to consolidate Tongxing’s net income from the beginning of the acquisition date to March 1, 2012, the date on which Longmen Joint Venture relinquished its equity interest and majority voting rights in Tongxing, and thereby its power of control of Tongxing.

(d) Liquidity

The Company’s accounts have been prepared in accordance with U.S. GAAP on a going concern basis. The going concern basis assumes that assets are realized and liabilities are extinguished in the ordinary course of business at amounts disclosed in the financial statements. The Company’s ability to continue as a going concern depends upon aligning its sources of funding (debt and equity) with the expenditure requirements of the Company and repayment of the short-term debt facilities as and when they fall due.

The steel business is capital intensive and as a normal industry practice in PRC, the Company is highly leveraged. Debt financing in the form of short term bank loans, loans from related parties, financing sales, bank acceptance notes, and capital leases have been utilized to finance the working capital requirements and the capital expenditures of the Company. As a result, the Company’s debt to equity ratio as of September 30, 2013 and December 31, 2012 were (6.6) and (7.1), respectively. As of September 30, 2013, the Company’s current liabilities exceed current assets (excluding non-cash item) by $1.1 billion.

Longmen Joint Venture, as the most important entity of the Company, accounted for majority of total sales of the Company. As such, the majority of the Company’s working capital needs come from Longmen Joint Venture. The Company’s ability to continue as a going concern depends heavily on Longmen Joint Venture’s operations. Longmen Joint Venture has obtained different types of financial supports, which are listed below by category:

Line of credit

The Company received lines of credit from the listed major banks totaling $110.8 million with expiration dates ranging from September 27, 2014 to October 26, 2014.

	Amount of
	Line of Credit
Banks	(in millions)		Repayment Date
Bank of China		6.5	August 25, 2014 to October 26, 2014
China Everbright Bank		48.9	October 8, 2014
Bank of Xi’an		32.6	October 9, 2014
Bank of Jinzhou		22.8	September 27, 2014*
Total	$	110.8

* Management expects the line of credit will be extended after September 27, 2014.

As of the date of this report, the Company utilized $61.9 million of these lines of credit.

10

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Vendor financing

Longmen Joint Venture signed additional vendor financing agreements, which will provide liquidity to the Company in a total amount of $815.0 million with the following companies:

		Financing Amount
Company	Financing period covered	(in millions)
Company A – related party	January 6, 2013 – January 5, 2015	$	163.0
Company B – third party	January 6, 2013 – November 7, 2015		163.0
Company C – third party	October 1, 2013 – March 31, 2015		489.0
Total		$	815.0

Company A, a related party company and Company B, a third party company, are both Longmen Joint Venture’s major coke suppliers. They have been doing business with Longmen Joint Venture for years. Each company has signed a two-year agreement with Longmen Joint Venture which was effective on January 6, 2013 to finance Longmen Joint Venture for its coke purchase for a two-year period. Company B signed an additional two-year agreement with Longmen Joint Venture effective on November 7, 2013. According to the above signed agreement, both Company A and B will not demand any cash payments for next two years. As of the date of this report, our payables to Company A and Company B were approximately$64.3 million and $51.9 million, respectively.

As a critical business stakeholder to the Company’s Tianwu Joint Venture, Company C is a Fortune 500 Company. In October 2012, Company C signed a one year agreement with Longmen Joint Venture to finance Longmen Joint Venture’s purchase of iron ore for an amount up to $158.3 million to commence on October 1, 2012. In June 2013, Company C signed another one year agreement with Longmen Joint Venture to finance Longmen Joint Venture’s purchase of iron ore for an amount up to $318.4 million to commence on October 1, 2013. According to the agreement, Company C agrees to provide an amount not less than $318.4 million in iron ore to Longmen Joint Venture. Subject to the terms of the agreement, Longmen Joint Venture is subject to a penalty of 0.05% of the daily outstanding balance owed to Company C in an event of late payment. The agreement also helps secure Company C’s iron ore sales to Longmen Joint Venture. On June 28, 2013, Company C agreed to increase the finance amount limit to $489.0 million and extended the financing period to March 31, 2015. As of the date of this report, our payable to Company C is approximately$1.2 million.

Financing sales

As part of our working capital management, Longmen Joint Venture has entered into an additional financing sales agreement with a third party company, Company D and two 100% owned subsidiaries of Longmen Joint Venture, named Yuxin Trading Co., Ltd. (“Yuxin”) and Yuteng Trading Co., Ltd. (“Yuteng”) (“financing sales”) to provide liquidity to the Company in the total amount of $81.5 million. See Note 9 for financing sales details.

Based on the contract terms, from December 31, 2012 until the earlier of the expiration date of the contract or December 31, 2013, the advance payment balance from Company D cannot be less than $81.5 million. The contract has been extended to December 31, 2014. The remaining financing sales balance can be paid by installment based on Longmen Joint Venture’s goods delivery volume. As of the date of this report, our payable to Company D is approximately $24.5 million.

Other financing

On January 7, 2013, November 6, 2013 and November 7, 2013, Longmen Joint Venture signed a payment extension agreement with each company listed below. In total, Longmen Joint Venture can get $77.4 million in financial support from a two-year balancing payment extension granted by the following five companies:

11

 

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

			Financing Amount
Company	Financing period covered		(in millions)
Company E – related party	January 7, 2013 – January 6, 2015	$	16.3
Company F – related party	January 7, 2013 – January 6, 2015		21.2
Company G – related party	January 7, 2013 – January 6, 2015		7.3
Company H – related party	November 7, 2013 – November 7, 2015		16.3
Company I – related party	November 6, 2013 – November 6, 2015		16.3
Total		$	77.4

According to the contract terms, Company E, Company F, Company G, Company H and Company I have agreed to grant a two year payment extension in the amounts of $16.3 million, $21.2 million, $7.3 million, $16.3 million and $16.3 million respectively. As of the date of this report, our payables to Company E, Company F, Company G, Company H and Company I are approximately $17.9  million, $14.0 million, $18.9million, $7.5 million and $0, respectively.

Amount due to sales representatives

Longmen Joint Venture entered into agreements with various entities to act as the Company’s exclusive sales agents in specified geographic areas.  These exclusive sales agents must meet certain criteria and are required to deposit a certain amount of money with the Company. In return, the sales agents receive exclusive sales rights in a specified area and discounted prices on products they order. These deposits bear no interest and are required to be returned to the sales agent once the agreement is terminated. As of September 30, 2013, Longmen Joint Venture has collected a total amount of $30.0 million. Historically, this amount is quite stable and we do not expect a big fluctuation in this amount for the next twelve months from September 30, 2013 onwards.

With the financial support from the banks and the companies above, management is of the opinion that the Company has sufficient funds to meet its future operations, working capital requirements and debt obligations until the end of September 30, 2014.The detailed breakdown of Longmen Joint Venture’s estimated cash flows items are listed below.

	Cash inflow (outflow)
	(in millions)
	For the twelve months ended
	September 30, 2014
Current liabilities over current assets (excluding non-cash items) as of September 30, 2013 (unaudited)	$	(1,072.0)
Projected cash financing and outflows:
Cash provided by line of credit from banks		110.8
Cash provided by vendor financing		815.0
Cash provided by financing sales		81.5
Cash provided by other financing		77.4
Cash provided by sales representatives		30.0
Cash projected to be used in operations in the twelve months ended September 30, 2014		(28.6)
Net projected change in cash for the twelve months ended September 30, 2014	$	14.1

As a result, the unaudited condensed consolidated financial statements for the period ended September 30, 2013 have been prepared on a going concern basis.

(e) Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the accompanying unaudited condensed consolidated financial statements and footnotes. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include the fair value of the profit sharing liability, the useful lives of and impairment for property, plant and equipment, and potential losses on uncollectible receivables, allowance for inventory valuation, the interest rate used in the financing sales, the fair value of the assets recorded under capital lease and the present value of the net minimum lease payments of the capital lease. Actual results could differ from these estimates.

(f) Concentration of risks and uncertainties

The Company’s operations are carried out in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC’s economy. The Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America and Western Europe. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.

12

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Company has significant exposure to the fluctuation of raw materials and energy prices as part of its normal operations. As of September 30, 2013 and December 31, 2012, the Company does not have any open commodity contracts to mitigate such risks.

Cash includes demand deposits in accounts maintained with banks within the PRC, Hong Kong and the United States. Total cash (including restricted cash balances) in these banks on September 30, 2013 and December 31, 2012 amounted to $467.9 million and $369.9 million, including $3.1 million and $2.3 million that were deposited in Shaanxi Coal and Chemical Industry Group Financial Co., Ltd., a related party, respectively. As of September 30, 2013, $0.2 million cash in the bank was covered by insurance. The Company has not experienced any losses in other bank accounts and believes it is not exposed to any risks on its cash in bank accounts.

The Company’s five major customers are all distributors and collectively represented approximately 25.5% and 23.4% of the Company’s total sales for the three and nine months ended September 30, 2013, respectively. The Company had five major customers, which represented approximately 27.2% and 34.1% of the Company’s total sales for the three months and nine months ended September 30, 2012, respectively. None of the five major customers accounted for more than 10% of total sales for the three and nine months ended September 30, 2013 and 2012, respectively. These five major customers accounted for 15.9% and 47.8% of total accounts receivable, including related parties, as of September 30, 2013 and December 31, 2012, respectively. One of the five major customers accounted for more than 10% of total accounts receivable, which amounted to $1.4 million and $10.4 million as of September 30, 2013 and December 31, 2012, respectively.

For the three and nine months ended September 30, 2013, the Company purchased approximately 15.3% and 29.3% of its raw materials from five major suppliers, respectively. None of the five major suppliers individually accounted for more than 10% of the total purchases for the three and nine months ended September 30, 2013. The purchases from the five major suppliers represent approximately 25.4% and 39.6% of the Company’s total purchases for the three months and nine months ended September 30, 2012, respectively. Two of the five major suppliers individually accounted for more than 10% of the total purchases for the nine months ended September 30, 2012. These five vendors accounted for 28.9% and 33.8% of total accounts payable, including related parties, as of September 30, 2013 and December 31, 2012, respectively. None of the five major suppliers individually accounted for more than 10% of total accounts payable as September 30, 2013 and one of the five major suppliers individually accounted for more than 10% of total accounts payable as December 31, 2012.

(g) Foreign currency translation and other comprehensive income

The reporting currency of the Company is the U.S. dollar. The Company’s subsidiaries in China use the local currency, Renminbi (RMB), as their functional currency. Assets and liabilities are translated at the unified exchange rate as quoted by the People’s Bank of China at the end of the period. The statement of operations accounts are translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statement of equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

Translation adjustments included in accumulated other comprehensive income amounted to $2.5 million and $10.2 million as of September 30, 2013 and December 31, 2012, respectively. The balance sheet amounts, with the exception of equity at September 30, 2013 and December 31, 2012 were translated at 6.13 RMB and 6.30 RMB to $1.00, respectively. The equity accounts were stated at their historical rate. The average translation rates applied to statement of operations accounts for the three months ended September 30, 2013 and 2012 were 6.16 RMB and 6.33 RMB, respectively. The average translation rates applied to statement of operations accounts for the nine months ended September 30, 2013 and 2012 were 6.21 RMB and 6.31 RMB, respectively. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheet.

The PRC government imposes significant exchange restrictions on fund transfers out of the PRC that are not related to business operations. These restrictions have not had a material impact on the Company because it has not engaged in any significant transactions that are subject to the restrictions.

13

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(h) Financial instruments

The accounting standards regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The Company considers the carrying amount of cash, short term investment, accounts receivable, other receivables, accounts payable and accrued liabilities, to approximate their fair values because of the short period of time between the origination of such instruments and their expected realization. For short term loans and notes payable, the Company concluded the carrying values are a reasonable estimate of fair values because of the short period of time between the origination and repayment and as their stated interest rates approximate current rates available.

The Company analyzes all financial instruments with features of both liabilities and equity, pursuant to which the Company’s warrants were required to be recorded as a liability at fair value and marked to market each reporting period.

The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follow:

· Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

· Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

· Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

On December 13, 2007, the Company entered into a Securities Purchase Agreement (the “Agreement”) with certain institutional investors issuing $40.0 million (“Notes”) and 1,154,958 warrants. The warrants can be exercised for common stock through May 13, 2013 at $13.51 per share, subject to customary anti-dilution adjustments. On December 24, 2009, the holders of the existing warrants of 1,154,958 shares entered into an agreement with the Company that reset the exercise price from $13.51 to $5 per share and increased the number of warrants from 1,154,958 to 3,900,871, which expired on May 13, 2013.

In December 2009, the Company issued an additional 2,777,778 warrants in connection with a registered direct offering, which expired as of June 24, 2012.

The aforementioned warrants meet the definition of a derivative instrument in the accounting standards. Therefore these instruments were accounted for as derivative liabilities and recorded at their fair value as of each reporting period. The change in the value of the derivative liabilities is charged against or credited to income.  The fair value was determined using the Cox Rubenstein Binomial Model, defined in the accounting standard as Level 2 inputs, and recorded the change in earnings. See Note 12– “Convertible notes and derivative liabilities” for the variables used in the Cox Rubenstein Binomial model.

The Company determined the carrying value of the profit sharing liability using Level 3 inputs by considering the present value of Longmen Joint Venture’s projected profits/losses with a discount rate of 7.3% based on the Company’s average borrowing rate. The projected profits/losses in Longmen Joint Venture were based upon, but not limited to, the following assumptions until April 30, 2031:

· projected selling units and growth in the steel market

· projected unit selling price in the steel market

· projected unit purchase cost in the coal and iron ore markets

· selling and general and administrative expenses to be in line with the growth in the steel market

· projected bank borrowings

The above assumptions were reviewed by the Company at September 30, 2013 and the Company changed those assumptions as compared to the assumption used at December 31, 2012 because of the changes in market conditions in PRC. Since the Company had the most updated information from the banks, GDP report and the operating results from the three and nine months ended September 30, 2013, all of the above information indicated the downward trend in the steel manufacturing industry in the coming years. As a result, the Company re-measured the fair value of the 40% profit sharing liability as of the period ended September 30, 2013 and recorded a gain on change in fair value of profit sharing liability of $41.8 million and $107.9 million for the three and nine months ended September 30, 2013, respectively.

If there will be any slight changes in any of the assumptions that we used, the fair value of the profit sharing liability will be changed accordingly. If we would reduce the projected bank borrowings rate by 1.0% and other factors remained unchanged, our profit sharing liability as of the beginning of the period ended September 30, 2013 would have been $254.9 million and we would reduce the gain from the change in the fair value of profit sharing liabilities by $32.9 million. If we would reduce the projected selling units and growth in the steel market rate by 1.0% and other factors remained unchanged, our profit sharing liability as of the beginning of the period ended September 30, 2013 would have been $214.3 million and we would increase the gain from the change in the fair value of profit sharing liabilities by $8.3 million.

14

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table sets forth by level within the fair value hierarchy, the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2013:

	Carrying Value as		Fair Value Measurements at September 30,
	of September 30,		2013
(in thousands)	2013		Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Profit sharing liability	$	241,090	$	-	$	-	$	241,090
Total	$	241,090	$	-	$	-	$	241,090

The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2012:

	Carrying Value as		Fair Value Measurements at December 31,
	of December 31,		2012
(in thousands)	2012		Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Derivative liabilities	$	1	$	-	$	1	$	-
Profit sharing liability		328,827		-		-		328,827
Total	$	328,828	$	-	$	1	$	328,827

The following is a reconciliation of the beginning and ending balance of the assets and liabilities measured at fair value on a recurring basis for the nine month ended September 30, 2013 and for the year ended December 31, 2012:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Beginning balance	$	328,828	$	303,243
Change in fair value of profit sharing liability		(107,877)		-
Current period interest expense accreted		12,440		22,499
Change of derivative liabilities charged to earnings		1		9
Exchange rate effect		7,698		3,077
Ending balance	$	241,090	$	328,828

Except for the derivative liabilities and profit sharing liability, the Company did not identify any other assets or liabilities that are required to be presented on the balance sheet at fair value in accordance with the accounting standard. The carrying value of the long term loans-related party approximates to its fair value as of the reporting date.

(i) Notes receivable

Notes receivable represents trade accounts receivable due from various customers where the customers’ banks have guaranteed the payment. The notes are non-interest bearing and normally paid within three to six months. The Company has the ability to submit request for payment to the customer’s bank earlier than the scheduled payment date, but will incur an interest charge and a processing fee.

Restricted notes receivable represents notes receivable pledged as collateral for short-term loans and short-term notes payable issued by banks.

Interest expenses for early submission request of payment for the three months ended September 30, 2013 and 2012 amounted to $9.6 million and $16.3 million, respectively, and amounted to $26.9 million and $65.6 million, respectively, for the nine months ended September 30, 2013 and 2012.

15

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(j) Plant and equipment, net

Plant and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets with a 3%-5% residual value. The depreciation expense on assets acquired under capital leases is included with depreciation expense on owned assets. The estimated useful lives are as follows:

Buildings and Improvements	10-40 Years
Machinery	10-30 Years
Machinery and equipment under capital lease	20 Years
Other equipment	5 Years
Transportation Equipment	5 Years

The Company assesses all significant leases for purposes of classification as either operating or capital. At lease inception, if the lease meets any of the four following criteria, the Company will classify it as a capital lease; otherwise it will be treated as an operating lease: a) transfer of ownership to lessee at the end of the lease term, b) bargain purchase option, c) lease term is equal to 75% or more of the estimated economic life of the leased property, d) the present value of the minimum lease payments is 90% or more of the fair value of the leased asset.

Construction in progress represents the costs incurred in connection with the construction of buildings or new additions to the Company’s plant facilities. No depreciation is provided for construction in progress until such time as the assets are completed and are placed into service, maintenance, repairs and minor renewals are charged directly to expense as incurred. Major additions and betterment to buildings and equipment are capitalized. Interest incurred during construction is capitalized into construction in progress. All other interest is expensed as incurred.

Long lived assets, including buildings and improvements, equipment and intangible assets are reviewed if events and changes in circumstances indicate that its carrying amount may not be recoverable, to determine whether their carrying value has become impaired. The Company considers assets to be impaired if the carrying value exceeds the future projected cash flows from related operations. The Company also re-evaluates the periods of depreciation and amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives.

(j) Intangible assets

Finite lived intangible assets of the Company are reviewed for impairment if events and circumstances require. The Company considers assets to be impaired if the carrying value exceeds the future projected cash flows from related operations. The Company also re-evaluates the periods of amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives.  As of September 30, 2013, the Company expects these assets to be fully recoverable.

Land use rights

All land in the PRC is owned by the government. However, the government grants “land use rights.”  General Steel (China) acquired land use rights in 2001 for a total of $3.9 million (RMB 23.7 million). These land use rights are for 50 years and expire in 2050 and 2053. The Company amortizes the land use rights over the twenty-year business term because its business license had a twenty-year term.

Long Steel Group contributed land use rights for a total amount of $24.2 million (RMB 148.6 million) to the Longmen Joint Venture. The contributed land use rights are for 50 years and expire in 2048 to 2052.

Maoming Hengda has land use rights amounting to $2.7 million (RMB 16.6 million) for 50 years that expire in 2054.

Other than the land use rights that General Steel (China) acquired in 2001, the Company amortizes the land use rights over their 50 year term.

Entity	Original Cost		Expires on
	(in thousands)
General Steel (China)	$	3,867		2050 & 2053
Longmen Joint Venture	$	24,226		2048 & 2052
Maoming Hengda	$	2,705		2054

16

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Mining right

Mining rights are capitalized at cost when acquired, including amounts associated with any value beyond proven and probable reserves, and amortized to operations as depletion expense using the units-of-production method over the estimated proven and probable recoverable tons. Longmen Joint Venture has iron ore mining right amounting to $2.4 million (RMB 15.0 million), which is amortized over the estimated recoverable reserve of 4.2 million tons.

(k) Investments in unconsolidated entities

Entities in which the Company has the ability to exercise significant influence, but does not have a controlling interest, are accounted for using the equity method. Significant influence is generally considered to exist when the Company has an ownership interest in the voting stock between 20% and 50%, and other factors, such as representation on the Board of Directors, voting rights and the impact of commercial arrangements, are considered in determining whether the equity method of accounting is appropriate. The Company accounts for investments with ownership less than 20% using the cost method.

The table below summarizes Longmen Joint Venture’s investment holdings as of September 30, 2013 and December 31, 2012.

			September 30,				December 31,
			2013				2012
	Year		Net investment		Owned		Net investment		Owned
Unconsolidated entities	acquired		(In thousands)		%		(In thousands)		%
Xian Delong Powder Engineering Materials Co., Ltd.		2007	$	1,161		24.1	$	1,166		24.1

Total investment income in unconsolidated subsidiaries amounted to $0.05 million and $0.04 million for the three months ended September 30, 2013 and 2012, respectively, and $0.1 million and $0.1 million for the nine months ended September 30, 2013 and 2012, respectively, which was included in “Loss from equity investments” in the unaudited condensed consolidated statements of operations and comprehensive income (loss).

(l) Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications have no effect on the accompanying consolidated statements of operations and cash flows.

Note 3 – Loans receivable – related parties

Loans receivable – related parties represents amounts the Company expects to collect from related parties upon maturity. 

The Company had the following loans receivable – related parties due within one year as of:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Loans to Long Steel Group; due on demand and non-interest bearing.		-		63,319
Loan to Teamlink Investment Co., Ltd; due in December 2013, June 2014, and July 2014; interest rate was 4.75%		4,540		6,000
Total loans receivable – related parties	$	4,540	$	69,319

See Note 20 “Related party transactions and balances” for the nature of the relationship of related parties.

Total interest income for the loans amounted to $0.1 million and $0 for the three months ended September 30, 2013 and 2012, respectively. 

Total interest income for the loans amounted to $0.2 million and $1.8 million for the nine months ended September 30, 2013 and 2012, respectively. 

17

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 4 – Accounts receivable (including related parties), net

Accounts receivable, including related party receivables, net of allowance for doubtful accounts consists of the following:  

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Accounts receivable	$	9,729	$	8,062
Less: allowance for doubtful accounts		(1,152)		(1,367)
Accounts receivable – related parties		3,252		14,966
Net accounts receivable	$	11,829	$	21,661

Movement of allowance for doubtful accounts is as follows:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Beginning balance	$	1,367	$	2,023
Charge to expense		-		433
Less: recovery		(249)		(1,109)
Exchange rate effect		34		20
Ending balance	$	1,152	$	1,367

Note 5 – Inventories

Inventories consist of the following:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Supplies	$	23,302	$	23,123
Raw materials		138,951		141,503
Finished goods		22,527		57,630
Less: allowance for inventory valuation		(7,397)		(9,585)
Total inventories	$	177,383	$	212,671

Raw materials consist primarily of iron ore and coke at Longmen Joint Venture. The cost of finished goods includes direct costs of raw materials as well as direct labor used in production. Indirect production costs at normal capacity such as utilities and indirect labor related to production such as assembling, shipping and handling costs for purchasing are also included in the cost of inventory.

The Company values its inventory at the lower of cost or market, determined on a weighted average method, or net realizable value. As of September 30, 2013 and December 31, 2012, the Company had provided allowance for inventory valuation in the amounts of $7.3 million and $9.6 million, respectively.

Movement of allowance for inventory valuation is as follows:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Beginning balance	$	9,585	$	38,143
Addition		7,305		9,582
Less: write-off		(9,722)		(38,519)
Exchange rate effect		229		379
Ending balance	$	7,397	$	9,585

18

 

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 6 – Advances on inventory purchases

Advances on inventory purchases are monies deposited or advanced to outside vendors or related parties on future inventory purchases. Most of the Company’s vendors require a certain amount of money to be deposited with them as a guarantee that the Company will complete its purchases on a timely basis.

This amount is refundable and bears no interest. The Company has legally binding contracts with its vendors, which require the deposit to be returned to the Company or netted against accounts payable due to its vendors to the extent there are unpaid balances when the contract ends. The inventory is normally delivered within one month after the monies have been advanced. The total outstanding amount, including advances to related parties, was $109.5 million and $126.1 million as of September 30, 2013 and December 31, 2012, respectively.

Note 7 – Plant and equipment, net

Plant and equipment consist of the following:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Buildings and improvements	$	253,621	$	214,661
Machinery		616,813		573,572
Machinery under capital lease		603,248		587,334
Transportation and other equipment		22,085		20,274
Construction in progress		58,111		4,645
Subtotal		1,553,878		1,400,486
Less: accumulated depreciation		(303,336)		(232,650)
Total	$	1,250,542	$	1,167,836

Construction in progress consisted of the following as of September 30, 2013:

Construction in progress	Value		Completion
description	(In thousands)		date
1.2 million tons high-strength steel production line		32,268		December 2013
Iron-making system dust removing equipment		3,307		November 2013
Drainage system		499		November 2013
Factory wall repair		241		November 2013
Gas pipe repair		121		November 2013
Office buildings		1,336		November 2013
Equipment updates		7,381		November 2013
#5 blast furnace construction		208		September 2014
Reconstruction of miscellaneous factory buildings		690		January 2014
Project materials		2,154
Others		9,906
Total	$	58,111

The Group is obligated under a capital lease for the iron and steel making facilities, including one sintering machine, two converters, two blast furnaces and some auxiliary systems that expire on April 30, 2031. The carrying value of assets acquired under the capital lease consists of the following:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Machinery	$	603,248	$	587,334
Less: accumulated depreciation		(69,248)		(46,497)
Carrying value of leased assets	$	534,000	$	540,837

The Company assessed the recoverability of all of its remaining long-lived assets at December 31, 2012, and the sum of the discounted future cash flows expected to result from the long-lived assets and their disposition was less than the carrying value by $20.2 million (RMB 127.2 million), which was impaired and included in the selling, general and administrative expenses for the year ended December 31, 2012. The discounted cash flows were determined using certain expected changes to the current operational assumptions. If those expectations are not met, the Company may be required to record additional impairment charges in future periods.

19

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Company assessed the recoverability of all of its remaining long lived assets at September 30, 2013 and such assessment did not result in any other impairment charges for the  three and nine months ended September 30, 2013.

Depreciation expense for the three months ended September 30, 2013 and 2012 amounted to $21.6 million and $20.8 million, respectively, and for the nine months ended September 30, 2013 and 2012, amounted to $64.1 and $61.4 million, respectively. These amounts include depreciation of assets held under capital leases for the three months ended September 30, 2013 and 2012, which amounted to $7.1 million and $7.0 million, respectively, and for the nine months ended September 30, 2013 and 2012, amounted to $21.2 and $20.9 million, respectively.

Note 8 – Intangible assets, net

Intangible assets consist of the following:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Land use rights	$	30,798	$	29,986
Mining right		2,448		2,384
Software		742		692
Subtotal		33,988		33,062
Less:
Accumulated amortization – land use rights		(8,387)		(7,577)
Accumulated amortization – mining right		(1,144)		(993)
Accumulated amortization – software		(529)		(426)
Subtotal		(10,060)		(8,996)
Intangible assets, net	$	23,928	$	24,066

The gross amount of the intangible assets amounted to $34.0 million and $33.1 million as of September 30, 2013 and December 31, 2012, respectively. The remaining weighted average amortization period is 33.7 years as of September 30, 2013.

Total amortization expense for the three months ended September 30, 2013 and 2012 amounted to $0.2 million and $0.3 million, respectively, and for the nine months ended September 30, 2013 and 2012, amounted to $0.7 million and $0.9 million, respectively.

Total depletion expense for the three months ended September 30, 2013 and 2012 amounted to $0.02 million and $0.1 million, respectively, and for the nine months ended September 30, 2013 and 2012, amounted to $0.1 million and $0.2 million, respectively.

The estimated aggregate amortization and depletion expenses for each of the five succeeding years is as follows:

	Estimated
	amortization and		Gross carrying
Year ending	depletion expenses		amount
	(in thousands)		(in thousands)
June 30, 2014	$	1,082		22,846
June 30, 2015		1,082		21,764
June 30, 2016		1,082		20,682
June 30, 2017		1,082		19,600
June 30, 2018		1,082		18,518
Thereafter		18,518		-
Total	$	23,928

20

 

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 9 – Debt

Short-term notes payable

Short-term notes payable are lines of credit extended by banks. Banks in turn issue the Company a bank acceptance note, which can be endorsed and assigned to vendors as payments for purchases. The notes payable are generally payable within three to six months. This short-term note payable is guaranteed by the bank for its complete face value. The banks do not charge interest on these notes, but usually charge a transaction fee of 0.05% of the notes value. In addition, the banks usually require the Company to deposit either a certain amount of cash at the bank as a guarantee deposit, which is classified on the balance sheet as restricted cash, or provide notes receivable as security, which are classified on the balance sheet as restricted notes receivable. Restricted cash as a guarantee for the notes payable amounted to $405.8 million and $322.7 million as of September 30, 2013 and December 31, 2012, respectively. Restricted notes receivable as a guarantee for the notes payable amounted to $237.2 million and $345.8 million as of September 30, 2013 and December 31, 2012, respectively.

The Company had the following short-term notes payable as of:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
General Steel (China): Notes payable to various banks in China, due various dates from October 2013 to March 2014. Restricted cash required of $24.5 million and $6.3 million as of September 30, 2013 and December 31, 2012, respectively; guaranteed by third parties. These notes payable were either repaid or renewed subsequently on the due dates.	$	37,490	$	12,696
Longmen Joint Venture: Notes payable to various banks in China, due various dates from October 2013 to August 2014. $381.3 million restricted cash and $237.2 million notes receivable are secured for notes payable as of September 30, 2013, and comparatively $316.4 million restricted cash and $345.8 million notes receivable secured as of December 31, 2012, respectively; some notes are further guaranteed by third parties. These notes payable were either repaid or renewed subsequently on the due dates.		950,498		971,117
Total short-term notes payable	$	987,988	$	983,813

Short-term loans

Short-term loans represent amounts due to various banks, other companies and individuals, including related parties, normally due within one year. The principal of the loans are due at maturity but can be renewed at the bank’s option. Accrued interest is due either monthly or quarterly.

Short term loans due to banks, related parties and other parties consisted of the following as of:

Due to banks

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
General Steel (China): Loans from various banks in China, due various dates from December 2013 to September 2014. Weighted average interest rate was 7.2% per annum and 7.6% per annum as of September 30, 2013 and December 31, 2012, respectively; some are guaranteed by third parties while others are secured by equipment and inventory. These loans were either repaid or renewed subsequently on the due dates.	$	38,973	$	32,189
Longmen Joint Venture: Loans from various banks in China, due various dates from November 2013 to August 2014. Weighted average interest rate was 6.5% per annum and 6.8% per annum as of September 30, 2013 and December 31, 2012, respectively; some are guaranteed by third parties, restricted cash or notes receivables. $120.0 million and $76.0 million restricted notes receivable were secured for the loans as of September 30, 2013 and December 31, 2012, respectively; These loans were either repaid or renewed subsequently on the due dates.		215,956		114,935
Total short-term loans - bank	$	254,929	$	147,124

21

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

As of September 30, 2013 and December 31, 2012, the Company had not met its financial covenants stipulated by certain loan agreements related to the Company’s debt to asset ratio. Based on the financial covenants, the Company should have kept its debt to asset ratio below 20% and 85% as of September 30, 2013 and December 31, 2012, respectively. However, as of September 30, 2013 and December 31, 2012, the Company's debt to asset ratio was 117.7% and 116.4%, respectively.

Furthermore, the Company is a party to a loan agreement with a cross default clause whereby any breach of loan covenants will automatically result in default of the loan. The outstanding balance of the short term loans affected by the above breach of covenants and cross default as of September 30, 2013 and December 31, 2012 was $6.4 million and $12.7 million, respectively. According to the Company’s short term loan agreements, the banks have the rights to request for more collateral or additional guarantees if the breach of covenant is not remedied or request early repayment of the loan if the Company does not cure such breach within a certain period of time. As of the date of this report, the Company has not received any notice from the banks to request more collateral, additional guarantees or early repayment of the short term loans due to the breach of covenant.

Due to unrelated parties

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Longmen Joint Venture: Loans from various unrelated companies and individuals, due various dates from October 2013 to February 2014, and weighted average interest rate was 5.2% per annum and 6.0% per annum as of September 30, 2013 and December 31, 2012, respectively. These loans were either repaid or renewed subsequently on the due dates.	$	33,294	$	25,324
Longmen Joint Venture: Loans from financing sales.		90,680		115,966
Maoming Hengda: Loans from one unrelated parties and one related party, due on demand, none interest bearing.		6,196		6,033
Total short-term loans – others	$	130,170	$	147,323

The Company had various loans from unrelated companies amounting to $130.2 million and $147.3 million as of September 30, 2013 and December 31, 2012, respectively. Of the $130.2 million, $6.2 million loans carry no interest, $90.7 million of financing sales are subject to interest rates ranging between 4.2% and 5.9%, and the remaining $33.3 million are subject to interest rates ranging from 4.7% to 12.0%. All short term loans from unrelated companies are payable on demand and unsecured.

As part of its working capital management, Longmen Joint Venture has entered into a number of sale and purchase back contracts ("contracts") with third party companies and Yuxin and Yuteng. According to the contracts, Longmen Joint Venture sells rebar to the third party companies at a certain price, and within the same month, Yuxin and Yuteng will purchase back the rebar from the third party companies at a price of 4.2% to 5.9% higher than the original selling price from Longmen Joint Venture. Based on the contract terms, Longmen Joint Venture is paid in advance for the rebar sold to the third party companies and Yuxin and Yuteng are given a credit period of several months to one year from the third party companies. There is no physical movement of the inventory during the sale and purchase back arrangement. The margin of 4.2% to 5.9% is determined by reference to the bank loan interest rates at the time when the contracts are entered into, plus an estimated premium based on the financing sale amount, which represents the interest charged by the third party companies for financing Longmen Joint Venture through the above sale and purchase back arrangement. The revenue and cost of goods sold arising from the above transactions are eliminated and the incremental amounts paid by Yuxin and Yuteng to purchase back the goods are treated as financing costs in the unaudited condensed consolidated financial statements.

Total financing sales for the three months ended September 30, 2013 and 2012 amounted to $166.2 million and $307.1 million, respectively, and for the nine months ended September 30, 2013 and 2012, amounted to $519.5 million and $600.8 million, respectively, which are eliminated in the Company’s unaudited condensed consolidated financial statements. The financial cost related to financing sales for the three months ended September 30, 2013 and 2012, accounted to $1.1 million and $2.1 million, respectively, and for the nine months ended September 30, 2013 and 2012, amounted to $4.2 million and $6.8 million, respectively.

22

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Short term loans due to related parties

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Baotou Steel: Loans from Tianjin Hengying Trading Co., Ltd, due on demand, and interest rates is 10% per annum.	$	3,430	$	4,133
General Steel China: Loans from Tianjin Hengying Trading Co., Ltd., due on demand, and interest rates is 10% per annum.		-		15,416
General Steel China: Loans from Tianjin Dazhan Industry Co, Ltd., due on demand, and interest rates is 10% per annum.		-		21,397
General Steel China: Loans from Beijing Shenhua Xinyuan Metal Materials Co., Ltd., due on demand, and interest rates is 10% per annum.		1,395		1,359
General Steel China: Loans from Yangpu Capital Automobile, due on demand, and interest rates is 10% per annum.		1,451		1,413
Longmen Joint Venture: Loan from Shaanxi Coal and Chemical Industry Group Co., Ltd., due in December 2013, and interest rate is 7.0% per annum.		33,580		-
Longmen Joint Venture: Loans from financing sales.		9,033		35,839
Total short-term loans - related parties	$	48,889	$	79,557

Long-term loans due to related party

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Longmen Joint Venture: Loans from Shaanxi Steel Group, due on various dates through November 2015 and interest rate are 5.6% - 5.9% per annum.	$	72,346	$	92,973
Less: Current maturities of long-term loans – related party		(47,896)		(54,885)
Long-term loans - related party	$	24,450	$	38,088

Total interest expense, net of capitalized interest, amounted to $15.5 million and $36.6 million for the three months ended September 30, 2013 and 2012, respectively.

Total interest expense, net of capitalized interest, amounted to $54.5 million and $138.9 million for the nine months ended September 30, 2013 and 2012, respectively.

Capitalized interest amounted to $1.3 million and $0.2 million for the three months ended September 30, 2013 and 2012, respectively.

Capitalized interest amounted to $2.1 million and $0.6 million for the nine months ended September 30, 2013 and 2012, respectively. 

Note 10 – Customer deposits

Customer deposits represent amounts advanced by customers on product orders. The product normally is shipped within one month after receipt of the advance payment, and the related sale is recognized in accordance with the Company’s revenue recognition policy. As of September 30, 2013 and December 31, 2012, customer deposits amounted to $110.2 million and $147.9 million, respectively, including deposits received from related parties, which amounted to $14.5 million and $22.0 million, respectively.

Note 11 – Deposits due to sales representatives

Longmen Joint Venture entered into agreements with various entities to act as the Company’s exclusive sales agent in a specified geographic area.  These exclusive sales agents must meet certain criteria and are required to deposit a certain amount of money with the Company. In return the sales agents receive exclusive sales rights in a specified area and at discounted prices on products they order. These deposits bear no interest and are required to be returned to the sales agent once the agreement is terminated. The agreement is normally entered/or renewed on an annual basis. Termination of the agreement can be mutually agreed to by both parties at any time. The Company had $30.0 million and $35.1 million in deposits due to sales representatives, including deposits due to related parties, as of September 30, 2013 and December 31, 2012, respectively.

23

 

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 12 – Convertible notes and derivative liabilities

The Company had 3,900,871 outstanding warrants in connection with the $40 million convertible notes issued in 2007, which expired on May 13, 2013, and 2,777,778 warrants in connection with a registered direct offering in 2009, which expired on June 24, 2012. The aforementioned warrants met the definition of a derivative instrument in the accounting standards and were recorded at their fair value on each reporting date. The change in the value of the derivative liabilities is charged against or credited to income each period.

The fair value of the warrants as of December 31, 2012 was calculated using the Cox Rubenstein Binomial model based on the following variables:

	December 31, 2012
Expected volatility		86	%
Expected dividend yield		0	%
Risk-free interest rate		0.08	%
Expected lives		0.36 years
Market price	$	0.99
Strike price	$	5.00

As of September 30, 2013 and December 31, 2012, derivative liabilities, which were included in other payables and accrued liabilities in the consolidated balance sheets, amounted to $0 and $1.0 thousand, respectively.

The Company has the following warrants outstanding:

Outstanding as of December 31, 2011	6,678,649
Granted	-
Forfeited / expired	(2,777,778)
Exercised	-
Outstanding as of December 31, 2012	3,900,871
Granted	-
Forfeited / expired	(3,900,871)
Exercised	-
Outstanding as of September 30, 2013	-

Note 13 - Supplemental disclosure of cash flow information

Interest paid, net of capitalized, amounted to $11.5 million and $20.2 million for the nine months ended September 30, 2013 and 2012, respectively.

The Company paid income tax amounted to $0.3 million and $0.1 million for the nine months ended September 30, 2013 and 2012, respectively.

During the nine months ended September 30, 2013, the Company had receivables of $1.0 million as a result of the disposal of equipment that has not been collected.

During the nine months ended September 30, 2013, the Company converted $1.0 million of equipment into inventory productions.

During the nine months ended September 30, 2013, the Company used $37.3 million inventory in plant and equipment constructions.

During the nine months ended September 30, 2013 and 2012, the Company offset $64.2 million and $0, respectively, accounts payable to related party as loan receivable – related party repayment.

During the nine months ended September 30, 2013 and 2012, the Company offset $119.9 million and $29.9 million, respectively, advance on inventory purchases and other receivables to related parties as short-term loan repayments.

During the nine months ended September 30, 2013, the Company reclassified $3.8 million refundable advances on inventory purchase – related parties to other receivables – related parties.

24

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

During the nine months ended September 30, 2013, the Company incurred $18.7 million accounts payable to be paid for constructions in process.

During the nine months ended September 30, 2013 and 2012, one of the Company’s unconsolidated entities declared dividend and the Company was entitled for the dividend amounted to $0.2 million and $0.1 million, respectively, which was not yet collected.

During the nine months ended September 30, 2012, the Company sold its 22.76% equity interest of Tongxing at the carrying value of $8.0 million to two individuals who are representatives from Long Steel Group, a related party. In connection with this transaction, the Company received a land use rights from Tongxing at carrying value for $3.6 million and settled with a payable in cash of $0.3 million that the Company has not been paid. In addition, the Company determined that dividend receivables of $0.9 million will be transferring to the two individuals and will not be collected from Tongxing after these transactions.

During the nine months ended September 30, 2012, the Company converted $48.0 million of our accounts payable and other payables from our related parties to short term loans upon the execution of the loan agreements.

Note 14 - Deferred lease income

To compensate the Group for costs and economic losses incurred during construction of the iron and steel making facilities owned by Shaanxi Steel, Shaanxi Steel reimbursed Longmen Joint Venture $11.4 million (RMB 70.1 million) in the fourth quarter of 2010 for the value of assets dismantled and rent under a 40-year property sub-lease that was entered into by the parties in June 2009 (the "Longmen Sub-lease"), and $29.8 million (RMB 183.1 million) for the reduced production efficiency caused by the construction. In addition, in 2010 and 2011, Shaanxi Steel reimbursed Longmen Joint Venture $14.6 million (RMB 89.5 million) and $14.6 million (RMB 89.3 million), respectively, for trial production costs related to the new equipment.

During the period from June 2010 to March 2011, as construction progressed and certain of the assets came online, Longmen Joint Venture used the assets free of charge to produce saleable units of steel products during this period. As such, the cost of using these assets and therefore the fair value of the free rent received was imputed with reference to what the depreciation charge would have been on these assets had they been owned or under capital lease to Longmen Joint Venture during the free use period. This cost of $7.2 million (RMB 43.9 million) each year were deferred and will be recognized over the term of the land sub-lease similar to the other charges and credits related to the construction of these assets.

The deferred lease income is amortized to income over the remaining term of the 40-year land sub-lease. For the three months ended September 30, 2013 and 2012, the Company recognized $0.5 million in each period. For the nine months ended September 30, 2013 and 2012, the Company recognized $1.6 million in each period. As of September 30, 2013 and December 31, 2012, the balance of deferred lease income amounted to $77.7 million and $77.2 million, respectively, of which $2.2 million and $2.1 million represents balance to be amortized within one year.

Note 15 - Capital lease obligation

On April 29, 2011, the Company’s subsidiary, Longmen Joint Venture entered into a Unified Management Agreement with Shaanxi Steel and Shaanxi Coal under which Longmen Joint Venture uses new iron and steel making facilities including one sintering machine, two converters, two blast furnaces and other auxiliary systems constructed by Shaanxi Steel. As the 20-year term of the agreement exceeds 75% of the assets’ useful lives, this arrangement is accounted for as a capital lease. The ongoing lease payments are comprised of two elements: (1) a monthly payment based on Shaanxi Steel’s cost to construct the assets of $2.3 million (RMB14.6 million) to be paid over the term of the Unified Management Agreement of 20 years and (2) 40% of any remaining pre-tax profits from the Asset Pool which includes Longmen Joint Venture and the newly constructed iron and steel making facilities. In October 2012, Shaanxi Steel agreed that it will not demand capital lease payment from Longmen Joint Venture until October 2014. The profit sharing component does not meet the definition of contingent rent because it is based on future revenue and is therefore considered part of the financing for the capital leased assets which is related to the Unified Management Agreement. For purposes of determining the value of the leased asset and obligation at the inception of the lease, the lease liability is then reduced by the value of the profit sharing component, which is recognized as a separate financial liability carried at fair value. See Note 16 – “Profit sharing liability”.

25

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Presented below is a schedule of estimated minimum lease payments on the capital lease obligation as well as payments for the profit sharing liability for the next five years as of September 30, 2013:

	Capital Lease Obligation		Capital Lease Obligation
Year ending September 30,	Minimum Lease Payments		Profit (Loss) Sharing		Total
	(in thousands)		(in thousands)		(in thousands)
2014	$	-	$	-	$	-
2015		126,557		-		126,557
2016		28,654		-		28,654
2017		28,654		-		28,654
2018		28,654		-		28,654
Thereafter		360,567		650,586		1,011,153
Total minimum lease payments		573,086		650,586		1,223,672
Less: amounts representing interest		(218,510)		(409,496)		(628,006)
Ending balance	$	354,576	$	241,090	$	595,666

Longmen Joint Venture does not expect to make payments on the profit sharing payment until year 2022 when Longmen Joint Venture will start to generating accumulated profit after recovering from the previous years’ losses.

Interest expense for the three months ended September 30, 2013 and 2012 on the minimum lease payments were $5.1 million and $5.1 million, respectively.

Interest expense for the nine months ended September 30, 2013 and 2012 on the minimum lease payments were $15.3 million and $15.5 million, respectively.

Interest expense for the three months ended September 30, 2013 and 2012 on the profit sharing liability were $2.6 million and $5.6 million, respectively.

Interest expense for the nine months ended September 30, 2013 and 2012 on the profit sharing liability were $12.4 million and $16.9 million, respectively.

Note 16 –Profit sharing liability

The profit sharing liability is recognized initially at its estimated fair value at the lease commencement date and included in the initial measurement and recognition of the capital lease in addition to the fixed payment component of the minimum lease payments. Subsequently, this financial instrument is accounted for separately from the lease accounting (Note 15 - “Capital lease obligation”). The initial fair value of the expected payments under the profit sharing component of the Unified Management Agreement is amortized over the term of the agreement using the effective interest method. The value of the profit sharing liability will be reassessed each reporting period with any change in fair value accounted for on a prospective basis. Refer to Note 2(h) – “Financial instruments” for details.

Based on the performance of the Asset Pool, no profit sharing payment, which is not required until net cumulative profits are achieved, was made for the nine months ended September 30, 2013 and 2012. Payments to Shaanxi Steel for the profit sharing are made based on net cumulative profits.

Note 17 – Other income (expense)

Lease income

The deferred lease income from the reimbursement from Shaanxi Steel for the net book value of the fixed assets that were demolished and for the inefficiency costs caused by the construction and loss incurred in the beginning stages of the system production is amortized to income over the remaining sub-lease term. For the three months ended September 30, 2013 and 2012, the Company recognized lease income of $0.5 million and $0.5 million, and for the nine months ended September 30, 2013 and 2012, amounted to $1.6 million and $1.6 million, respectively.

26

 

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 18 – Taxes

Income tax

Significant components of the provision for income taxes on earnings and deferred taxes on net operating losses from operations for the three months ended September 30, 2013 and 2012 are as follows:

	For the three months ended		For the three months ended
(In thousands)	September 30, 2013		September 30, 2012
Current	$	25	$	100
Deferred		-		-
Total provision for income taxes	$	25	$	100

	For the nine months ended		For the nine months ended
(In thousands)	September 30, 2013		September 30, 2012
Current	$	201	$	510
Deferred		-		169
Total provision (benefit) for income taxes	$	201	$	679

Under the Income Tax Laws of the PRC, General Steel (China), Baotou Steel Pipe Joint Venture (located in Inner Mongolia province), Maoming Hengda (located in Guangdong province) and Tianwu Joint Venture (located in Tianjin Port Free Trade Zone) are subject to income tax at a rate of 25%.

Longmen Joint Venture is located in the Mid-West region of China and as such, qualifies for the “Go-West” tax rate of 15% promulgated by the government. In 2010, the Chinese government announced that the “Go-West” tax initiative would be extended for 10 years, and thus, the preferential tax rate of 15% will be in effect until 2020. This special tax treatment for Longmen Joint Venture will be evaluated on a year-to-year basis by the local tax bureau.

Deferred taxes assets – China

According to Chinese tax regulations, net operating losses can be carried forward to offset operating income for the next five years. The Group’s losses carried forward of $436.9 million will begin to expire in 2014. The Chinese government recently announced several policies to curb the real estate price increases across the country which led to a slowdown in demand for construction steel products. Additionally due to the continued global economic slowdown and the overcapacity issues in China's steel market, management expected there would be a sustained increase in margin pressure in the next five years until all the existing but outdated steel capacity across the whole industry are eliminated. Management took into consideration this potential negative impact on average selling price and gross margin of its products, re-performed an operating forecast for the next five years and concluded that the beginning-of-the-year balance of deferred tax assets mainly relating to the net operating loss carry forward may not be fully realizable due to the reduction in the projection of income to be available in the next 5 years. Management therefore decided to provide 100% valuation allowance for the deferred tax assets. The valuation allowance as of September 30, 2013 and December 31, 2012 was $86.9 million and $72.9 million, respectively. Management will review this valuation allowance periodically and make adjustments as warranted. Temporary differences, representing tax and book differences in various items, such as receivable allowances, inventory allowances, impairments on fixed assets and deferred lease income.

Movement of valuation allowance:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Beginning balance	$	72,891	$	47,703
Current period addition		12,776		25,180
Current period reversal		(857)		-
Deconsolidation of Tongxing		-		(216)
Exchange difference		2,125		224
Ending balance	$	86,935	$	72,891

27

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Deferred taxes assets – U.S.

General Steel Holdings, Inc. was incorporated in the United States and has incurred net operating losses for income tax purposes for the nine months ended September 30, 2013. The net operating loss carry forwards for United States income taxes amounted to $1.6 million, which may be available to reduce future years’ taxable income. These carry forwards will expire, if not utilized, starting from 2026 through 2032. Management believes that the realization of the benefits from these losses appears uncertain due to the Company’s limited operating history and continuing losses for United States income tax purposes. Accordingly, the Company has provided a 100% valuation allowance on the deferred tax asset benefit to reduce the asset to zero. The valuation allowance as of September 30, 2013 was $0.5 million. The net change in the valuation allowance for the nine months ended September 30, 2013 was $0. Management will review this valuation allowance periodically and make adjustments as warranted.

The Company has cumulative proportionate retained earnings from profitable subsidiaries of approximately $0.1 million as of September 30, 2013. Accordingly, no provision has been made for U.S. deferred taxes related to future repatriation of these earnings, nor is it practicable to estimate the amount of income taxes that would have to be provided if we concluded that such earnings will be remitted in the future.

Value added tax

Enterprises or individuals who sell commodities, engage in repair and maintenance or import and export goods in the PRC are subject to a value added tax in accordance with PRC laws. The value added tax (“VAT”) standard rates are 13% to 17% of the gross sales price. A credit is available whereby VAT paid on the purchases of semi-finished products or raw materials used in the production of the Company’s finished products can be used to offset the VAT due on sales of the finished product. As of September 30, 2013 and December 31, 2012, the Company had $3.1 million and $4.2 million in value added tax credit which are available to offset future VAT payables, respectively.

Sales and purchases are recorded net of VAT collected and paid as the Company acts as an agent for the government for VAT collection. VAT on sales and VAT on purchases amounted to $160.5 million and $156.2 million, respectively, for the three months ended September 30, 2013 and $209.7 million and $206.7 million, respectively, for the three months ended September 30, 2012. VAT on sales and VAT on purchases amounted to $513.7 million and $494.4 million, respectively, for the nine months ended September 30, 2013, $620.6 million and $594.1 million, respectively, for the nine months ended September 30, 2012. 

Taxes payable consisted of the following: 

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
VAT taxes payable	$	7,309	$	13,579
Income taxes payable		20		68
Misc. taxes		2,387		3,027
Totals	$	9,716	$	16,674

Note 19 – Earnings (Loss) per share

The computation of earnings (loss) per share is as follows:

 (in thousands, except per share data)

	For the three		For the three
	months ended		months ended
	September 30, 2013		September 30, 2012
Income (loss) attributable to holders of common stock	$	3,801	$	(41,598)
Basic and diluted weighted average number of common shares outstanding		55,141		54,466
Earnings (loss) per share
Basic and diluted	$	0.07	$	(0.76)

	For the nine		For the nine
	months ended		months ended
	September 30, 2013		September 30, 2012
Loss attributable to holders of common stock	$	(32,914)	$	(102,759)
Basic and diluted weighted average number of common shares outstanding		54,976		54,946
Loss per share
Basic and diluted	$	(0.60)	$	(1.87)

28

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Company had warrants exercisable for 3,900,871 shares of the Company’s common stock at September 30, 2012. For the three and nine months ended September 30, 2012, all outstanding warrants were excluded from the diluted earnings per share calculation since they are anti-dilutive. 

Other than the aforementioned potentially dilutive securities, there were no other potentially dilutive securities outstanding for the three and nine months ended September 30, 2013 and 2012.

Note 20 – Related party transactions and balances

Related party transactions

a. Capital lease

As disclosed in Notes 15 – “Capital lease obligations”, Longmen Joint Venture entered into a capital lease arrangement on April 29, 2011, with Shaanxi Coal and Shaanxi Steel, which are related parties of the Group. The following is an analysis of the leased assets under the capital lease:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Machinery	$	603,248	$	587,334
Less: accumulated depreciation		(69,248)		(46,497)
Carrying value of leased assets	$	534,000	$	540,837

b. On January 1, 2010, General Steel (China), entered into a lease agreement with Tianjin Daqiuzhuang Steel Plates Co., Ltd. (the “Lessee”), whereby General Steel (China) leases its facility located at No. 1, Tonga Street, Daqiuzhuang Town, Jinghai County, Tianjin City to the Lessee (the “Lease Agreement”). The Lease Agreement provides approximately 776,078 square feet of workshops, land, equipment and other facilities amounting to RMB 215.8 million ($34.4 million) to the Lessee and allows the Company to reduce overhead costs while providing a recurring monthly income stream resulting from payments due under the lease. The term of the Lease Agreement was from January 1, 2010 to December 31, 2011 and the monthly base rental rate due to General Steel (China) was approximately $0.2 million (RMB 1.7 million). On July 28, 2011, General Steel (China) (lessor) signed a supplemental agreement with the lessee to extend the lease for an additional five years to December 31, 2016. However, due to current steel market conditions, the lessee informed the Company that they did not intend to extend the lease at June 30, 2012 and has terminated the supplemental agreement early. There was no penalty for early termination. The Company assessed the recoverability of all of its remaining long lived assets at September 30, 2013 and such assessment did not result in any other impairment charges for the three and nine months ended September 30, 2013.

For the three months ended September 30, 2013 and 2012, General Steel (China) did not realize any rental income the related party, and for the nine months ended September 30, 2013 and 2012, General Steel (China) realized rental income $0 million and $1.6 million, respectively, which has been included in “other non-operating income (expense), net” in the unaudited condensed consolidated statements of operations and comprehensive income (loss).

c. The following chart summarized sales to related parties for the three and nine months ended September 30, 2013 and 2012.

		Three months ended		Three months ended
Name of related parties	Relationship	September 30, 2013		September 30, 2012
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	63,793	$	123,631
Sichuan Yutai Trading Co., Ltd	Significant influence by Long Steel Group**		-		16,998
Shaanxi Yuchang Trading Co., Ltd	Significant influence by Long Steel Group		1,081		-
Shaanxi Haiyan Trade Co., Ltd	Significant influence by Long Steel Group		85		12,480
Shaanxi Shenganda Trading Co., Ltd	Significant influence by Long Steel Group		19,866		7,599
Shaanxi Steel	Majority shareholder of Long Steel Group		979		25
Shaanxi Long Steel Group Baoji Steel Rolling Co., Ltd	Subsidiary of Long Steel Group		9		11,392
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		1,782		20,758
Shaanxi Coal and Chemical Industry Group Co., Ltd	Shareholder of Shaanxi Steel		7,951		-
Others	Entities either owned or have significant influence by our affiliates or management		-		-
Total		$	95,546	$	192,883

29

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

**Long Steel Group has the ability to significantly influence the operating and financial decisions of the entity through equity ownership either directly or through key employees, commercial contractual terms, or the ability to assign management personnel.

		Nine months ended		Nine months ended
Name of related parties	Relationship	September 30, 2013		September 30, 2012
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	226,754	$	360,820
Sichuan Yutai Trading Co., Ltd	Significant influence by Long Steel Group		72		147,847
Shaanxi Yuchang Trading Co., Ltd	Significant influence by Long Steel Group		21,491		41,433
Shaanxi Haiyan Trade Co., Ltd	Significant influence by Long Steel Group		15,681		43,015
Shaanxi Shenganda Trading Co., Ltd	Significant influence by Long Steel Group		56,545		34,132
Shaanxi Steel	Majority shareholder of Long Steel Group		2,390		634
Shaanxi Long Steel Group Baoji Steel Rolling Co., Ltd	Subsidiary of Long Steel Group		2,122		31,485
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		33,075		37,965
Shaanxi Coal and Chemical Industry Group Co., Ltd	Shareholder of Shaanxi Steel		22,577		-
Others	Entities either owned or have significant influence by our affiliates or management		-		1,493
Total		$	380,707	$	698,824

d. The following charts summarize purchases from related parties for the three and nine months ended September 30, 2013 and 2012.

		Three months ended		Three months ended
Name of related parties	Relationship	September 30, 2013		September 30, 2012
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	101,606	$	123,637
Hancheng Haiyan Coking Co., Ltd	Noncontrolling shareholder of Long Steel Group		31,331		47,487
Xi’an Pinghe Metallurgical Raw Material Co., Ltd	Noncontrolling shareholder of Long Steel Group		1,181		16,674
Shaanxi Long Steel Group Baoji Steel Rolling Co., Ltd	Subsidiary of Long Steel Group		-		1,568
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		1		2,257
Shaanxi Huafu New Energy Co., Ltd	Significant influence by the Long Steel Group		10,529		10,322
Beijing Daishang Trading Co., Ltd.	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		1,726		1,049
Others	Entities either owned or have significant influence by our affiliates or management		64		91
Total		$	146,438	$	203,085

30

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

		Nine months ended		Nine months ended
Name of related parties	Relationship	September 30, 2013		September 30, 2012
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	376,104	$	453,947
Hancheng Haiyan Coking Co., Ltd	Noncontrolling shareholder of Long Steel Group		148,322		195,861
Xi’an Pinghe Metallurgical Raw Material Co., Ltd	Noncontrolling shareholder of Long Steel Group		13,678		83,251
Shaanxi Long Steel Group Baoji Steel Rolling Co., Ltd	Subsidiary of Long Steel Group		53		5,332
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		212		4,417
Shaanxi Huafu New Energy Co., Ltd	Significant influence by the Long Steel Group		28,618		24,347
Beijing Daishang Trading Co., Ltd.	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		6,635		3,653
Others	Entities either owned or have significant influence by our affiliates or management		300		305
Total		$	573,922	$	771,113

Related party balances

a. Loans receivable – related parties:

Name of related parties	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	-	$	63,319
Teamlink Investment Co., Ltd	Partially owned by CEO* through indirect shareholding		4,540		6,000
Total		$	4,540	$	69,319

*The CEO is referred to herein as the chief executive officer of General Steel Holdings, Inc. 

See Note 3 – loans receivable – related parties for loan details.

b. Accounts receivables – related parties:

Name of related parties	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	1,834	$	10,409
Shaanxi Long Steel Group Baoji Steel Rolling Co., Ltd	Subsidiary of Long Steel Group		-		2,017
Tianjin Daqiuzhuang Steel Plates	Partially owned by CEO through indirect shareholding		19		18
Shaanxi Steel	Majority shareholder of Long Steel Group		1,227		2,435
Others			172		87
Total		$	3,252	$	14,966

31

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

c. Other receivables – related parties:

Other receivables - related parties are those nontrade receivables arising from transactions between the Company and its related parties, such as advances or payments made on behalf of these related parties.

Name of related parties	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	561	$	301
Shaanxi Steel	Majority shareholder of Long Steel Group		44,811		65,981
Tianjin General Quigang Pipe Co., Ltd	Partially owned by CEO through indirect shareholding		1,228		1,195
Tianjin Dazhan Industry Co, Ltd	Partially owned by CEO through indirect shareholding		489		476
Maoming Shengze Trading Co., Ltd.	Partially owned by CEO through indirect shareholding		3,834		-
Others	Entities either owned or have significant influence by our affiliates or management		578		429
Total		$	51,501	$	68,382

d. Advances on inventory purchase – related parties:

Name of related parties	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	1,377	$	1,367
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		6,254		-
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		12,805		-
Tianjin General Qiugang Pipe Co., Ltd	Partially owned by CEO through indirect shareholding		9,210		41,316
Maoming Shengze Trading Co., Ltd	Partially owned by CEO through indirect shareholding		-		3,733
Others	Entities either owned or have significant influence by our affiliates or management		21		-
Total		$	29,667	$	46,416

32

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

e. Accounts payable - related parties:

Name of related parties	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Hancheng Haiyan Coking Co., Ltd	Noncontrolling shareholder of Longmen Joint Venture	$	60,463	$	58,661
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		100,579		91,511
Shaanxi Coal and Chemical Industry Group Co., Ltd.	Shareholder of Shaanxi Steel		-		5,652
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		954		3
Xi’an Pinghe Metallurgical Raw Material Co., Ltd	Noncontrolling shareholder of Long Steel Group		7,838		5,278
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		1		13,919
Henan Xinmi Kanghua Fire Refractory Co., Ltd	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		722		1,146
Beijing Daishang Trading Co., Ltd	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		1,149		875
Tianjin General Qiugang Pipe Co., Ltd	Partially owned by CEO through indirect shareholding		-		52
Others	Entities either owned or have significant influence by our affiliates or management		553		335
Total		$	172,259	$	177,432

f. Short-term loans - related parties:

Name of related parties	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Shaanxi Steel	Majority shareholder of Long Steel Group	$	-	$	35,839
Shaanxi Coal and Chemical Industry Group Co., Ltd	Shareholder of Shaanxi Steel		33,580		-
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		1,547		-
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		10,916		19,549
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		-		21,397
Beijing Shenhua Xinyuan Metal Materials Co., Ltd	Partially owned by CEO through indirect shareholding		1,395		1,359
Yangpu Capital Automobile	Partially owned by CEO through indirect shareholding		1,451		1,413
Total		$	48,889	$	79,557

See Note 9 – Debt for the loan details.

g. Current maturities of long-term loans – related parties

Name of related party	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Shaanxi Steel	Majority shareholder of Long Steel Group	$	47,896	$	54,885
Total		$	47,896	$	54,885

33

 

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

h. Other payables – related parties:

Other payables – related parties are those nontrade payables arising from transactions between the Company and its related parties, such as advances or payments from these related parties on behalf of the Group.

		September 30,		December 31,
Name of related parties	Relationship	2013		2012
		(in thousands)		(in thousands)
Tianjin Hengying Trading Co, Ltd	Partially owned by CEO through indirect shareholding	$	876	$	2,770
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		51,919		60,180
Shaanxi Steel	Majority shareholder of Long Steel Group		44,173		-
Wendlar Investment & Management Group Co., Ltd	Common control under CEO		911		836
Yangpu Capital Automobile	Partially owned by CEO through indirect shareholding		254		141
Xi’an Pinghe Metallurgical Raw Material Co., Ltd	Noncontrolling shareholder of Long Steel Group		-		4,761
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		4,020		3,695
Maoming Shengze Trading Co., Ltd	Partially owned by CEO through indirect shareholding		1,566		-
Victory Energy Resource Co., Ltd	Partially owned by CEO through indirect shareholding		1,375		-
Others	Entities either owned or have significant influence by our affiliates or management		1,059		642
Total		$	106,153	$	73,025

i. Customer deposits – related parties:

Name of related parties	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Shaanxi Yuchang Trading Co., Ltd	Significant influence by Long Steel Group	$	10	$	4,869
Sichuan Yutai Trading Co., Ltd	Significant influence by Long Steel Group		-		2,163
Tianjin Hengying Trading Co, Ltd	Partially owned by CEO through indirect shareholding		-		90
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		13,600		8,864
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		679		5,615
Shaanxi Shenganda Trading Co., Ltd	Significant influence by Long Steel Group		-		353
Others	Entities either owned or have significant influence by our affiliates or management		223		44
Total		$	14,512	$	21,998

j. Deposits due to sales representatives – related parties

Name of related parties	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Hancheng Haiyan Coking Co., Ltd	Noncontrolling shareholder of Long Steel Group	$	587	$	619
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		635		619
Shaanxi Yuchang Trading Co., Ltd	Significant influence by Long Steel Group		587		-
Total		$	1,809	$	1,238

34

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

k. Long-term loans – related party:

Name of related party	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Shaanxi Steel	Majority shareholder of Long Steel Group	$	24,450	$	38,088
Total		$	24,450	$	38,088

The Company also provided guarantee on related parties’ bank loans amounting to $139.9 million and $118.0 million as of September 30, 2013 and as of December 31, 2012, respectively.

l. Long-term other payable – related party:

Long-term other payable – related party is a nontrade payable arising from a transaction between the Company and its related party, Shaanxi Steel, in which the Company received an advance from Shaanxi Steel to make payment to a third party for a construction project.

Name of related party	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Shaanxi Steel	Majority shareholder of Long Steel Group	$	-	$	43,008
Total		$	-	$	43,008

m. Deferred lease income

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Beginning balance	$	77,199	$	78,524
Less: Lease income realized		(1,613)		(2,119)
Exchange rate effect		2,072		794
Ending balance		77,658		77,199
Current portion		(2,178)		(2,120)
Noncurrent portion	$	75,480	$	75,079

For the three months ended September 30, 2013 and 2012, the Company realized lease income from Shaanxi Steel, a related party, amounted to $0.5 million and $0.5 million, respectively.

For the nine months ended September 30, 2013 and 2012, the Company realized lease income from Shaanxi Steel, a related party, amounted to $1.6 million and $1.6 million, respectively.

Note 21 - Equity

2013 Equity Transactions

On March 28, 2013, the Company granted senior management and directors 174,900 shares of common stock at $1.01 per share, as compensation under the Company’s 2008 Equity Incentive Plan. The shares were valued at the quoted market price on the grant date.

On June 27, 2013, the Company granted senior management and directors 163,150 shares of common stock at $1.02 per share, as compensation under the Company’s 2008 Equity Incentive Plan. The shares were valued at the quoted market price on the grant date.

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GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

On August 16, 2013, an additional $45.1 million (or RMB 280 million) was contributed to Tianwu Joint Venture with $27.0 million (or RMB 168 million) contributed by the Company and $18.0 million (or RMB 112 million) contributed by Tianjin Material and Equipment Group Corporation (“TME Group”). The Company’s controlling interest of Tianwu Joint Venture remains at 60% after the capital contribution.

On September 28, the Company granted senior management and directors 163,150 shares of common stock at $0.88 per share as compensation under the Company’s 2008 Equity Incentive Plan. The shares were valued at the quoted market price on the grant date.

Note 22 – Retirement plan

Regulations in the PRC require the Company to contribute to a defined contribution retirement plan for all employees. All the employees of the Company’s entities in China are entitled to a retirement pension amount calculated based upon their salary at their date of retirement and their length of service in accordance with a government managed pension plan. The PRC government is responsible for the pension liability to the retired staff. The Company’s entities in China are required to contribute based on the higher of 20% of the employees’ monthly base salary or 12% of the minimum social average salary of the city where the facilities are located. Employees are required to contribute 8% of their base salary to the plan. The minimum social average salary is announced by the local Social Security bureau and updated annually. Total pension expense incurred by the Company was $2.3 million and $1.7 million for the three months ended September 30, 2013 and 2012, respectively, and for the nine months ended September 30, 2013 and 2012 amounted to $6.4 million and $5.5 million, respectively.

Note 23 – Statutory reserves

The laws and regulations of the People’s Republic of China require that before a foreign -invested enterprise distributes profits to its shareholders, it must first satisfy all tax liabilities, provision for losses in previous years, and make allocations, in proportions determined at the discretion of the board of directors, to the statutory reserves. The statutory reserves include the surplus reserve funds and the enterprise fund and these statutory reserves represent restricted retained earnings.

Surplus reserve fund

The Company is required to transfer 10% of its net income, as determined in accordance with the PRC accounting rules and regulations, to a statutory surplus reserve fund until such reserve balance reaches 50% of the Company’s registered capital.

The transfer to this reserve must be made before distribution of any dividend to shareholders. The surplus reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any, and may be utilized for business expansion or converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of the shares currently held by them, provided that the remaining reserve balance after such issue is not less than 25% of the registered capital. For the periods ended September 30, 2013 and 2012, the Company did not make any contributions to these reserves.

Special reserve

The Company is required by the PRC government to reserve safety and maintenance expense to the cost of production based on the actual quantity of mineral exploited.  The amount of reserves is determined within the unit price range provided by Ministry of Finance of PRC. For the nine months ended September 30, 2013 and 2012, the Company made contributions of $0.7 million and $0.9 million to these reserves, respectively and used $0.4 million and $0.9 million of safety and maintenance expense, respectively.

36

 

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 24 – Commitment and contingencies

Operating Lease Commitments

Total operating lease commitments for rental of offices, buildings, equipment and land use rights of the Company’s PRC subsidiaries as of September 30, 2013 is as follows:

Year ending September 30,	Minimum lease payment
	(in thousands)
	(Unaudited)
2014	$	1,445
2015		680
2016		559
2017		559
2018		559
Years after		20,185
Total minimum payments required	$	23,987

Total rental expense was $0.8 million and $0.8 million for the three months ended September 30, 2013 and 2012, respectively, and $2.4 million and $2.4 million for the nine months ended September 30, 2013 and 2012, respectively.

Contractual Commitments

Longmen Joint Venture has $211.6 million contractual obligations related to construction projects as of September 30, 2013 estimated to be fulfilled between November 2013 and September 2014.

Contingencies

As of September 30, 2013, Longmen Joint Venture provided guarantees to related parties’ and third parties’ bank loans, including lines of credit and others, amounting to $304.6 million.

	Guarantee
Nature of guarantee	amount		Guaranty Due Date
	(In thousands)
Line of credit	$	178,931	Various from October 2013 to August 2015
Three-party financing agreements		42,315	Various from October 2013 to January 2014
Confirming storage		19,951	Various from December 2013 to September 2014
Financing by the rights of goods delivery in future		63,374	Various from December 2013 to March 2015
Total	$	304,571

	Guarantee
Name of parties being guaranteed	amount		Guaranty Due Date
	(In thousands)
Long Steel Group	$	74,819	Various from October 2013 to August 2015
Hancheng Haiyan Coking Co., Ltd		42,315	Various from October 2013 to January 2014
Long Steel Group Fuping Rolling Steel Co., Ltd		11,271	Various from January to June 2014
Yichang Zhongyi Industrial Co., Ltd		25,428	June 2014
Xi’an Laisheng Logistics Co., Ltd		4,303	May 2014
Xi'an Kaiyuan Steel Sales Co., Ltd		3,733	Various from November 2013 to January 2014
Shaanxi Hongan Material Co., Ltd.		5,379	Various from October to December 2013
Shaanxi Anlin Logistics Co., Ltd		7,726	Various from December 2013 to April 2014
Chengdu Zhongyi Steel Co., Ltd		3,977	December 2013
Shaanxi Huatai Huineng Group Co., Ltd		24,450	March 2014
Hancheng Sanli Furnace Burden Co., Ltd.		16,300	March 2015
Tianjin Dazhan Industry Co., Ltd		44,238	Various from January 2014 to March 2015
Tianjin Hengying Trading Co., Ltd		19,637	Various from January to July 2014
Tianjin Qiu Steel Pipe Industry Co., Ltd		11,410	April 2014
Jinmen Desheng Metallurty Co., Ltd		3,260	August 2014
Shaanxi Baolong Industry Co., Ltd		2,347	November 2013
Shaanxi Longan Industrial Development Co., Ltd		3,978	November 2013
Total	$	304,571

37

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

As of September 30, 2013, the Company did not accrue any liability for the amounts the Group has guaranteed for third and related parties because those parties are current in their payment obligations and the Company has not experienced any losses from providing guarantees. The Company has evaluated the debt guarantees and concluded that the likelihood of having to make payments under the guarantees is remote and that the fair value of the stand-ready obligation under these commitments is not material.

Note 25 – Segments

The Company’s chief operating decision maker evaluates performance and determines resource allocations based on a number of factors, the primary measure being income from operations of the Group’s four regional divisions in the PRC: Longmen Joint Venture in Shaanxi province, Maoming Hengda in Guangdong province, Baotou Steel Pipe Joint Venture in Inner Mongolia province and General Steel (China) & Tianwu Joint Venture in Tianjin City.

The Group operates in one business segment that includes four different divisions. These reportable divisions are consistent with the way the Company manages its business, each division operates under separate management groups and produces discrete financial information. The accounting principles applied at the operating division level in determining income from operations is generally the same as those applied at the consolidated financial statement level.

The following represents results of division operations for three months ended September 30, 2013 and 2012:

(In thousands)
Sales:	2013		2012
Longmen Joint Venture	$	606,444	$	708,974
Maoming Hengda		252		1,134
Baotou Steel Pipe Joint Venture		2,921		1,322
General Steel (China) & Tianwu Joint Venture		4,236		129,341
Total sales		613,853		840,771
Interdivision sales		(3,758)		(129,346)
Consolidated sales	$	610,095	$	711,425

Gross profit (loss):	2013		2012
Longmen Joint Venture	$	8,122	$	(18,417)
Maoming Hengda		(57)		(761)
Baotou Steel		160		120
General Steel (China) & Tianwu Joint Venture		6		5,462
Total gross profit (loss)		8,231		(13,596)
Interdivision gross profit		-		-
Consolidated gross profit (loss)	$	8,231	$	(13,596)

Income (loss) from operations:	2013		2012
Longmen Joint Venture	$	32,967	$	(37,000)
Maoming Hengda		(719)		(1,062)
Baotou Steel		20		630
General Steel (China) & Tianwu Joint Venture		(695)		2,399
Total income (loss) from operations		31,572		(35,033)
Interdivision income (loss) from operations		-		-
Reconciling item (1)		(1,177)		(1,350)
Consolidated income (loss) from operations	$	30,395	$	(36,383)

Net income (loss) attributable to General Steel Holdings, Inc.:	2013		2012
Longmen Joint Venture	$	8,284	$	(39,494)
Maoming Hengda		(694)		(1,073)
Baotou Steel		16		403
General Steel (China) & Tianwu Joint Venture		(2,689)		(26)
Total net income (loss) attributable to General Steel Holdings, Inc.		4,917		(40,190)
Interdivision net income		-		-
Reconciling item (1)		(1,116)		(1,408)
Consolidated net income (loss) attributable to General Steel Holdings, Inc.	$	3,801	$	(41,598)

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GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Depreciation, amortization and depletion:	2013		2012
Longmen Joint Venture	$	21,014	$	19,915
Maoming Hengda		307		451
Baotou Steel		62		52
General Steel (China) & Tianwu Joint Venture		505		790
Consolidated depreciation, amortization and depletion	$	21,888	$	21,208

Finance/interest expenses:	2013		2012
Longmen Joint Venture	$	23,252	$	33,989
Maoming Hengda		1		35
Baotou Steel		-		127
General Steel (China) & Tianwu Joint Venture		2,249		2,467
Interdivision interest expenses		-		-
Reconciling item (1)		1		(3)
Consolidated interest expenses	$	25,503	$	36,615

Capital expenditures:	2013		2012
Longmen Joint Venture	$	16,455	$	3,259
Maoming Hengda		-		23
Baotou Steel		-		1
General Steel (China) & Tianwu Joint Venture		-		15
Reconciling item (1)		-		-
Consolidated capital expenditures	$	16,455	$	3,298

The following represents results of division operations for nine months ended September 30, 2013 and 2012:

(In thousands)
Sales:	2013		2012
Longmen Joint Venture	$	1,903,933	$	2,126,556
Maoming Hengda		3,124		4,003
Baotou Steel Pipe Joint Venture		3,902		3,923
General Steel (China) & Tianwu Joint Venture		58,416		141,668
Total sales		1,969,375		2,276,150
Interdivision sales		(54,338)		(136,001)
Consolidated sales	$	1,915,037	$	2,140,149

Gross profit (loss):	2013		2012
Longmen Joint Venture	$	(23,704)	$	12,628
Maoming Hengda		188		(1,174)
Baotou Steel		249		193
General Steel (China) & Tianwu Joint Venture		29		8,431
Total gross profit (loss)		(23,238)		20,078
Interdivision gross profit		-		-
Consolidated gross profit (loss)	$	(23,238)	$	20,078

Income (loss) from operations:	2013		2012
Longmen Joint Venture	$	32,998	$	(40,071)
Maoming Hengda		(1,741)		(2,498)
Baotou Steel		(285)		224
General Steel (China) & Tianwu Joint Venture		(2,293)		4,878
Total income (loss) from operations		28,679		(37,467)
Interdivision income (loss) from operations		-		-
Reconciling item (1)		(3,504)		(4,003)
Consolidated income (loss) from operations	$	25,175	$	(41,470)

39

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Net loss attributable to General Steel Holdings, Inc.:	2013		2012
Longmen Joint Venture	$	(18,335)	$	(92,974)
Maoming Hengda		(1,681)		(2,393)
Baotou Steel		(227)		(263)
General Steel (China) & Tianwu Joint Venture		(9,373)		(3,079)
Total net loss attributable to General Steel Holdings, Inc.		(29,616)		(98,709)
Interdivision net income		-		-
Reconciling item (1)		(3,298)		(4,050)
Consolidated net loss attributable to General Steel Holdings, Inc.	$	(32,914)	$	(102,759)

Depreciation, amortization and depletion:	2013		2012
Longmen Joint Venture	$	62,295	$	58,573
Maoming Hengda		933		1,447
Baotou Steel		185		134
General Steel (China) & Tianwu Joint Venture		1,542		2,384
Consolidated depreciation, amortization and depletion	$	64,955	$	62,538

Finance/interest expenses:	2013		2012
Longmen Joint Venture	$	73,424	$	129,683
Maoming Hengda		1		47
Baotou Steel		-		381
General Steel (China) & Tianwu Joint Venture		7,927		8,819
Interdivision interest expenses		-		-
Reconciling item (1)		3		(1)
Consolidated interest expenses	$	81,355	$	138,929

Capital expenditures:	2013		2012
Longmen Joint Venture	$	60,461	$	19,604
Maoming Hengda		2		38
Baotou Steel		8		6
General Steel (China) & Tianwu Joint Venture		3		18
Reconciling item (1)		-		-
Consolidated capital expenditures	$	60,474	$	19,666

Total Assets as of:	September 30, 2013		December 31, 2012
Longmen Joint Venture	$	2,537,952	$	2,513,206
Maoming Hengda		29,340		29,687
Baotou Steel Pipe Joint Venture		5,116		5,186
General Steel (China) & Tianwu Joint Venture		178,844		152,965
Interdivision assets		(84,880)		(57,436)
Reconciling item (2)		5,654		7,074
Total Assets	$	2,672,026	$	2,650,682

(1) Reconciling item represents the unallocated income or expenses of the Company, arising from General Steel Investment Co., Ltd, Yangpu Shengtong Investment Co., Ltd and Qiu Steel for the three and nine months ended September 30, 2013 and 2012.

(2) Reconciling item represents assets held at General Steel Holdings, Inc., General Steel Investment Co., Ltd, Yangpu Shengtong Investment Co., Ltd and Qiu Steel as of September 30, 2013 and December 31, 2012.

40

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Note Regarding Forward-Looking Statements

The following discussion of the financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and related notes thereto. The following discussion contains forward-looking statements. General Steel Holdings, Inc. is referred to herein as “we,” “our,” “us” and “the Company.” The words or phrases “would be,” “will allow,” “expect to,” “intends to,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” or similar expressions are intended to identify forward-looking statements. Such statements include those concerning our expected financial performance, our corporate strategy and operational plans. Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties, including: (a) those risks and uncertainties related to general economic conditions in the People’s Republic of China, including regulatory factors that may affect such economic conditions; (b) whether we are able to manage our planned growth efficiently and operate profitable operations, including whether our management will be able to identify, hire, train, retain, motivate and manage required personnel or that management will be able to successfully manage and exploit existing and potential market opportunities; (c) whether we are able to generate sufficient revenues or obtain financing to sustain and grow our operations; and (d) whether we are able to successfully fulfill our primary requirements for cash which are explained below under “Liquidity and Capital Resources.” Unless otherwise required by applicable law, we do not undertake, and we specifically disclaim any obligation, to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement. Additional information regarding certain factors which could cause actual results to differ from such forward-looking statements include, but are not limited to, those described in Item 1A, “Risk Factors”, to our Annual Report on Form 10-K for the fiscal year ended December 31, 2012 filed with the SEC on June 17, 2013, and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, filed with the SEC on August 6, 2013.

Recent Developments and Third Quarter Highlights

The third quarter of 2013 was highlighted with the following:

· Sales in the third quarter of 2013 decreased by 14.2% to $610.1 million, from $711.4 million in the third quarter of 2012, due to a decrease in both the sales volume and the average selling price of our products. For the third quarter of 2013, sales volume of rebar in Shaanxi Longmen Iron and Steel Co., Ltd. (“Longmen Joint Venture”) totaled 1.24 million metric tons, a decrease of 8.9%, compared to 1.36 million metric tons in the third quarter of 2012, with an average selling price of $489.6 per ton, as compared to $521.2 per ton in the third quarter of 2012.

· Gross profit in the third quarter of 2013 was $8.2 million, or 1.3% of total revenue, as compared to a gross loss of $13.6 million, or (1.9)% of total revenue in the third quarter of 2012.

· Total finance expenses in the third quarter of 2013 were $25.5 million, as compared to $36.6 million for the same period in 2012. Finance expenses mainly consisted of interest expense on capital lease, which was $7.8 million and $10.7 million in the third quarter of 2013 and 2012, respectively, and interest expense on bank loans and discounted notes receivable, which was $17.7 million and $25.9 million in the third quarter of 2013 and 2012, respectively.

· Gain (loss) per share was $0.07 and $(0.76) in the third quarter of 2013 and 2012, respectively. The increase in the income in the third quarter was mainly due to the average cost decreasing more than the average selling price, leading to a gross profit.

OVERVIEW

We were incorporated on August 5, 2002, in the State of Nevada. We are headquartered in Beijing, China and operate a portfolio of Chinese steel companies. We serve various industries and produce a variety of steel products including, but not limited to: reinforced bars (“rebar”), hot-rolled carbon, spiral-weld pipes and high-speed wire. Our current aggregate annual production capacity of steel products is 7 million metric tons of crude steel. Our individual product categories have a variety of demand drivers, such as rural income, infrastructure construction and energy consumption. Domestic economic conditions are also an overall demand driver for all our products.

Our vision is to become one of the largest and most profitable non-government owned steel companies in the People’s Republic of China (the “PRC”). Our mission is to grow our business organically and through the acquisition of Chinese steel companies to increase their profitability and efficiencies by utilizing western management practices and advanced production technologies, and the infusion of capital resources.

Our two-pronged growth strategy focuses on a combination of capacity expansion, as well as optimizing operating efficiencies and leverage:

· We aim to grow our revenue by increasing capacity and through continual cooperation and partnerships with leading state-owned enterprises (SOEs).

· We aim to drive profitability through improved operational efficiencies and optimization of our cost structure.

Unless the context indicates otherwise, as used herein the terms “General Steel”, the “Company”, “we”, “our” and “us” refer to General Steel Holdings, Inc.

41

Steel-Related Subsidiaries and Raw Material Trading Company

We presently have controlling interests in four steel-related subsidiaries and one raw material trading subsidiary:

· General Steel (China) Co., Ltd. (“General Steel (China)”);

· Baotou Steel - General Steel Special Steel Pipe Joint Venture Company Limited (“Baotou Steel Pipe Joint Venture”);

· Shaanxi Longmen Iron and Steel Co., Ltd. (“Longmen Joint Venture”);

· Maoming Hengda Steel Co., Ltd. (“Maoming Hengda”); and

· Tianwu General Steel Material Trading Co., Ltd. (“Tianwu Joint Venture”).

Our Company, together with our subsidiaries, majority owned subsidiaries and variable interest entity, are referred to as the Group.

General Steel (China) Co., Ltd

General Steel (China), formerly known as “Tianjin Daqiuzhuang Metal Sheet Co., Ltd.”, started operations in 1988.

On May 14, 2009, General Steel (China) changed its official name from “Tianjin Daqiuzhuang Metal Sheet Co., Ltd.” to better reflect its role as a merger and acquisition platform for steel company investments in China. In some instances, General Steel (China) retains the use of the name “Daqiuzhuang Metal” for brand recognition purposes within the industry.

On January 1, 2010, General Steel (China) entered into a lease agreement with Tianjin Daqiuzhuang Steel Plates Co., Ltd. (the “Lessee”), whereby General Steel (China) leases its facility located at No. 1, Tonga Street, Daqiuzhuang Town, Jinghai County, Tianjin City to the Lessee (the “Lease Agreement”). The Lease Agreement provides approximately 776,078 square feet of workshops, land, equipment and other facilities to the Lessee and allows the Company to reduce overhead costs while providing a recurring monthly income stream resulting from payments due under the lease. The initial term of the Lease Agreement was from January 1, 2010 to December 31, 2012 and the monthly base rental rate due to General Steel (China) was approximately $0.3 million (RMB 1.7 million). On July 28, 2011, General Steel (China) signed a supplemental agreement with the Lessee to extend the lease for an additional five years to December 31, 2016. However, due to current steel market conditions, the Lessee had informed us that they do not intend to continue with the lease at June 30, 2012. There was no penalty for early termination. General Steel (China) currently does not have plans to lease the facility to another company and as such, a write-down in the carrying value of property, plant and equipment in relation to this event had been assessed and the estimated impairment amount of $5.5 million (RMB 35.1 million) was recorded in the selling, general and administrative expenses in the second quarter of 2011, and an additional $20.2 million (RMB 127.2 million) was impaired and recorded in the selling, general and administrative expenses for the year ended December 31, 2012. Management also re-evaluates the fair value of its long-term assets on annual basis, or if there is a triggering event, which would require an assessment sooner.

Baotou Steel - General Steel Special Steel Pipe Joint Venture Company Limited

On April 27, 2007, General Steel (China) and Baotou Iron and Steel Group Co., Ltd. (“Baotou Steel”) entered into an Amended and Restated Joint Venture Agreement, amending the Joint Venture Agreement entered into on September 28, 2005, to increase General Steel (China)'s ownership interest in the related joint venture to 80%. The joint venture’s name is Baotou Steel - General Steel Special Steel Pipe Joint Venture Company Limited, a Chinese limited liability company (“Baotou Steel Pipe Joint Venture”). Baotou Steel Pipe Joint Venture obtained its business license from government authorities in the PRC on May 25, 2007, and started its operations in July 2007. Baotou Steel Pipe Joint Venture has four production lines capable of producing 100,000 metric tons of double spiral-weld pipes primarily used in the energy sector to transport oil and steam. These pipes have a diameter ranging from 219mm to 1240mm, a wall thickness ranging from 6mm to 13mm, and a length ranging from 6m to 12m. Presently, Baotou Steel Pipe Joint Venture sells its products using an internal sales force to customers in the Inner Mongolia Autonomous Region and the northwest region of the PRC.

Shaanxi Longmen Iron and Steel Co., Ltd

Effective June 1, 2007, through General Steel (China) and Tianjin Qiu Steel Investment Co., Ltd.(“Qiu Steel”), a 99% owned company of General Steel (China), we entered into a Joint Venture Agreement with Shaanxi Longmen Iron & Steel Group Co., Ltd. (“Long Steel Group”) to form Shaanxi Longmen Iron and Steel Co., Ltd. (“Longmen Joint Venture”). Through General Steel (China) and Qiu Steel, we invested approximately $39.3 million in cash and collectively held a 60% ownership interest in Longmen Joint Venture until April 29, 2011 when we entered into a 20-year Unified Management Agreement (the “Unified Management Agreement”) with Longmen Joint Venture, Shaanxi Coal and Chemical Industry Group Co., Ltd. (“Shaanxi Coal”) and Shaanxi Iron and Steel Group Co., Ltd. (“Shaanxi Steel”). Longmen Joint Venture was determined to be a Variable Interest Entity (“VIE”) and we are the primary beneficiary.

Long Steel Group, located in Hancheng city, Shaanxi Province, in China’s Western region, was founded in 1958 and incorporated in 2002. Long Steel Group is owned by a state owned entity through Shaanxi Steel. Long Steel Group holds the remaining 40% ownership interest in Longmen Joint Venture and operates as a fully-integrated steel production facility. Fewer than 10% of steel companies in China have fully-integrated steel production capabilities.

Currently, Longmen Joint Venture has five branch offices, four consolidated subsidiaries/VIE and five entities in which it has a noncontrolling interest. It employs approximately 9,600 full-time workers. In addition to steel production, Longmen Joint Venture operates transportation services through its Changlong Branch, located in Hancheng city, Shaanxi Province. Changlong Branch owns 185 vehicles and provides transportation services exclusively to Longmen Joint Venture.

42

Longmen Joint Venture’s rebar products are categorized within the steel industry as “longs” (referencing their shape). Rebar is generally considered a regional product because its weight and dimensions make it ill-suited for cost-effective long-haul ground transportation. By our estimates, the market demand for rebar in Shaanxi Province is six to eight million metric tons per year. Slightly more than half of this demand comes from Xi’an, the capital of Shaanxi Province, located 180km from Longmen Joint Venture’s main steel production site. Currently, we estimate that we have an approximate 72% share of the Xi’an market for rebar.

An established regional network of approximately 128 distributors together with those small distributors and three sales offices sell Longmen Joint Venture’s products. All products sell under the registered brand name of “Yulong”, which has strong regional recognition and awareness. Rebar and billet products carry ISO 9001 and 9002 certification and other Longmen Joint Venture’s products have won national quality awards. Products produced at the facility have been used in the construction of the Yangtze River Three Gorges Dam, the Xi’an International Airport, the Xi’an city subway system and the Xi Luo Du and the Xiang Jia Ba hydropower projects.

On September 24, 2007, Longmen Joint Venture acquired a 74.92% ownership interest in Longmen Iron and Steel Group. Environmental Protection Industry Development Co., Ltd. (“Longmen EPID”). At the same time, Longmen Joint Venture entered into an equity transfer agreement with Long Steel Group to acquire a 36% ownership interest in its subsidiary, Hualong Fire Retardant Materials Co., Ltd. (“Hualong”). Longmen Joint Venture paid $0.4 million (RMB 3.3 million) in exchange for the ownership interest and is the largest shareholder in Hualong. Hualong’s facility produces fire-retardant materials used in various steel making processes.

In January 2010, Longmen Joint Venture completed its acquisition of the remaining 25.08% interest in Longmen EPID pursuant to an equity transfer agreement with Shaanxi Fangxin Industrial Co., Ltd. (“Shaanxi Fangxin”), the other shareholder of Longmen EPID for RMB 8.7 million. Longmen EPID then became a branch of Longmen Joint Venture.

From June 2009 to March 2011, we worked with Shaanxi Steel to build new iron and steel making facilities including two 1,280 cubic meter blast furnaces, two 120 metric ton converters, one 400 square meter sintering machine and some auxiliary systems. As a result, Longmen Joint Venture incurred certain costs of construction as well as economic losses on suspended production of certain small furnaces and other equipment to accommodate the construction of the new equipment, on behalf of Shaanxi Steel.

Dismantling of certain assets and a sub-lease of Longmen Joint Venture’s land associated with the construction by Shaanxi Steel began in June 2009. At the beginning of the construction in June 2009, Longmen Joint Venture reached an oral agreement with Shaanxi Steel that all costs incurred related to the construction would be reimbursed by Shaanxi Steel. From that point forward through construction and testing until completion of the project in March 2011, Longmen Joint Venture recorded the related costs as they were incurred according to the nature of these costs and recognized the related receivable from Shaanxi Steel. In December 2010, Shaanxi Steel and Longmen Joint Venture were able to finalize the amount of costs incurred by the Longmen Joint Venture to be reimbursed and executed two signed agreements between the two parties on December 20, 2010. Therefore, to compensate us, in the fourth quarter of 2010, Shaanxi Steel reimbursed Longmen Joint Venture $11.4 million (RMB 70.1 million) related to the value of assets dismantled and rent under a 40-year property sub-lease that was entered into by the parties in June 2009, and $29.8 million (RMB 183.1 million) for the reduced production efficiency caused by the construction. In addition, in 2010 and 2012, Shaanxi Steel reimbursed Longmen Joint Venture $14.6 million (RMB 89.5 million) and $14.6 million (RMB 89.3 million), respectively, for trial production costs related to the new equipment.

During the period from June 2010 to March 2011, as construction progressed and certain of the assets came online, Longmen Joint Venture used the assets free of charge to produce saleable units of steel products during this period. As such, the cost of using these assets and the fair value of the free rent received was imputed with reference to what the depreciation charge would have been on these assets had they been owned or under capital lease to Longmen Joint Venture during this period. This cost of $7.2 million (RMB 43.9 million) each year were deferred and will be recognized over the term of the land sub-lease similar to the other charges and credits related to the construction of these assets.

The amount of reimbursement is deferred as lease income and recognized as a component of the property that was sub-leased during the construction, and is to be amortized to income over the remaining terms of the 40-year sub-lease.

For the three months ended September 30, 2013 and 2012, we recognized lease income of $0.5 million and $0.5 million, respectively, and $1.6 million and $1.6 million for the nine months ended September 30, 2013 and 2012, respectively. As of September 30, 2013 and December 31, 2012, the deferred lease income on the land sub-lease was $77.7 million and $77.2 million, respectively. The remaining life of amortization was 35.8 years as of September 30, 2013.

On April 29, 2011, we entered into a 20-year Unified Management Agreement with Longmen Joint Venture, Shaanxi Coal and Shaanxi Steel. Shaanxi Steel is the controlling shareholder of Long Steel Group which is the non-controlling interest holder in Longmen Joint Venture, and Shaanxi Coal, a state-owned entity, is the parent company of Shaanxi Steel. Under the terms of the Unified Management Agreement, all manufacturing machinery and other equipment of Longmen Joint Venture plus $603.2 million (or approximately RMB 3.7 billion) of the newly constructed iron and steel making facilities owned by Shaanxi Steel which includes one 400m² sintering machine, two 1,280m³ blast furnaces, two 120 ton converters and some auxiliary systems, are managed collectively as a single virtual asset pool (“Asset Pool”). Longmen Joint Venture manages the Asset Pool as the principal operating entity and is responsible for the daily operation of the new and existing facilities.

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Furthermore, under the terms of the Unified Management Agreement, Shaanxi Coal has committed to providing Longmen Joint Venture with raw materials, including coke and coal, at a cost not higher than the market rate. In addition, the Unified Management Agreement includes provisions pursuant to which both Shaanxi Coal and Shaanxi Steel are expected to provide financial support, including credit guarantees, as needed for operations by Longmen Joint Venture. In October 2012, Shaanxi Steel agreed that it will not demand capital lease payment from Longmen Joint Venture until October 2014. 

Longmen Joint Venture pays Shaanxi Steel for the use of the newly constructed iron and steel making facilities an amount equaling the depreciation expense on the equipment constructed by Shaanxi Steel in addition to 40% of the pre-tax profit generated by the Asset Pool. The remaining 60% of the pre-tax profit is allocated to Longmen Joint Venture. As a result, our economic interest in the profits generated by the Asset Pool decreased from 60% to 36%. However, the overall capacity under the management of Longmen Joint Venture has increased by three million tons, or 75%. The Unified Management Agreement is also expected to improve Longmen Joint Venture’s cost structure through sustainable and steady sourcing of key raw materials and reduced transportation costs. The distribution of profit is subject to a prospective adjustment after the first two years based on each entity’s actual investment of time and resources into the Asset Pool.

The parties to the Unified Management Agreement have agreed to establish the Shaanxi Longmen Iron and Steel Unified Management Supervisory Committee (“Supervisory Committee”) to ensure that the facilities and related resources are being operated and managed according to the stipulations set forth in the Unified Management Agreement. However, the Board of Directors of Longmen Joint Venture remains the controlling decision-making body of Longmen Joint Venture and the Asset Pool.

The Unified Management Agreement constitutes an arrangement that involves a lease which met certain of the criteria of a capital lease and therefore, the lease is accounted for as such by Longmen Joint Venture. See Note 15 - “Capital lease obligations” and Note 16 -“Profit sharing liability” of the Notes to Condensed Consolidated Financial Statements included herein.

In November 2010, we brought online a 1,200,000 metric ton capacity rebar production line which was renovated based on an existing 800,000 metric ton capacity rebar production line. In July 2011, we brought online a 1,000,000 metric ton capacity high speed wire production line. These two installed production lines were both relocated from the Maoming Hengda (as defined below) facility, which consume less energy when running at maximum efficiencies compared to our previous production line.

Maoming Hengda Steel Co., Ltd

On June 25, 2008, through our subsidiary Qiu Steel, we paid approximately $7.1 million (RMB 50 million) in cash to purchase 99% of Maoming Hengda Steel Group, Ltd. (“Maoming Hengda”). The total registered capital of Maoming Hengda is approximately $77.8 million (RMB 544.6 million).

Maoming Hengda’s core business is the production of rebar products used in the construction industry. Located on 140 hectares (approximately 346 acres) in Maoming city, Guangdong Province, the Maoming Hengda facility previously had two production lines capable of annual production capacities of 1.8 million metric tons of 5.5mm to 16mm diameter high-speed wire and 12mm to 38mm diameter rebar. The products were sold through nine distributors targeting customers in Guangxi Province and the Western region of Guangdong.

To take advantage of a stronger market demand in Shaanxi Province, in the second quarter of 2009, we relocated the 800,000 metric ton capacity rebar production line from Maoming Hengda’s facility to Longmen Joint Venture. Thereafter, in December 2010, we relocated the 1,000,000 metric ton capacity high-speed wire production line from Maoming Hengda’s facility to Longmen Joint Venture to meet the increased demand in Shaanxi Province.

In December 2010, we brought online a new 400,000 ton capacity rebar production line. The new rebar line was constructed as a result of a strategic alliance agreement between Maoming Hengda and Zhuhai Yueyufeng Iron and Steel Co., Ltd. (“Yueyufeng”), executed on February 3, 2010. According to this agreement, Yueyufeng paid $4.4 million in advance in three installments to support the construction of the rebar production line for Maoming Hengda, and charged Maoming Hengda interest at rate of 10% annually. The interest expense incurred was recorded in finance expense.

Tianwu General Steel Material Trading Co., Ltd

We formed Tianwu General Steel Material Trading Co., Ltd. (“Tianwu Joint Venture”) with Tianjin Material and Equipment Group Corporation (“TME Group”). The contributed capital of Tianwu Joint Venture is approximately $2.9 million (or RMB20 million), and we hold a 60% controlling interest. TME Group is one of the largest and most diversified commodity trading groups in China. On August 16, 2013, an additional $45 million (or RMB 280 million) was contributed to Tianwu Joint Venture with $27.0 million (or RMB 168 million) contributed by us and $18.0 million (or RMB 112 million) contributed by TME Group. Our controlling interest of Tianwu Joint Venture remains 60%.

Tianwu Joint Venture sources raw materials, mainly overseas iron ore, and is expected to supply approximately 20% to 50% of our imported iron-ore needs, amounting to approximately two to three million metric tons on an annual basis.

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Production Capacity Information Summary by Subsidiary

Annual Production	General Steel	Baotou Steel Pipe	Longmen Joint	Maoming
Capacity (metric tons)	(China)	Joint Venture	Venture	Hengda
Crude Steel	-	-	7 million	-
Processing	400,000	100,000	3.6 million	400,000
Main Products	Hot-rolled sheet	Spiral-weld pipe	Rebar/High-speed wire	Rebar
Main Application	Light Agricultural vehicles	Energy transport	Infrastructure and construction	Infrastructure and construction

Marketing and Customers

We sell our products primarily to distributors, and we typically collect payment from these distributors in advance. Our marketing efforts are mainly directed toward those customers who have demanding requirements for on-time delivery, general inquiries and product quality. We believe that these requirements as well as product planning are critical factors in our ability to serve this segment of the market.

Our revenue is dependent, in large part, on significant contracts with a limited number of large customers. For the three and nine months ended September 30, 2013, approximately 25.5% and 23.4% of our sales were to five customers, respectively. We believe that revenue derived from our current and future large customers will continue to represent a significant portion of our total revenue.

Moreover, our success will depend in part upon our ability to obtain orders from new customers, as well as the financial condition and success of our customers and general economic conditions in China.

Demand for our Products

Overall, domestic economic growth is an important driver of our products, especially from construction and infrastructure projects, rural income growth and energy demand.

At Longmen Joint Venture, growth in regional construction and infrastructure projects drives demand for our products. According to the 12th Five Year National Economic and Social Development Plan (“NESDP”) (2011-2015), development of China’s Western region is one of the top five economic priorities of the nation. Shaanxi Province, where Longmen Joint Venture is located, has been designated as a focal point for development in the Western region. Longmen Joint Venture is 180 km from Xi’an, the capital city of Shaanxi Province and it does not have a major competitor within a 250 km radius.

The Western region of China, where our major sales market is located, has experienced a higher rate of growth than other Chinese regions in recent years. Compared to an increase of 7.7% for the national GDP, the GDP increase of 11.1% was reported by Shaanxi Province in the first nine months of 2013 over the previous year. Additionally, according to Accounting and Corporate Finance Production Statistics in China, Sichuan Province also reported a GDP increase of 10.0%. We have a sales office in Chengdu City, Sichuan Province to meet the increasing demand for the construction of steel.

According to the Shaanxi provincial government, the total fixed asset investment for the Shaanxi Province was approximately $198.4 billion (RMB 1.25 trillion) for the year ended December 31, 2012, an increase of 28.9% over 2011.

At the end of June 2009, the State Council Office announced that it approved the Guanzhong-Tianshui Economic Zone development program. This program covers the development of two western provinces and seven cities from 2009 to 2020.

In addition, the Guanzhong-Tianshui Economic Zone will concentrate on the development of the Xi’an area. The metropolitan area construction program focuses on the cities of Xi’an and Xianyang, and their surrounding areas, covering up to 12,000 square kilometers, including the construction of railways, highways, subways, airport expansion and newly developed areas. Under this program, the Shaanxi provincial government has announced that it will build approximately 4,500 kilometers of railway with the investment of approximately $41.5 billion (RMB 260 billion) by 2015 and 8,080 kilometers of highway by 2020. The infrastructure and constructions projects provide strong and stable demand for our steel product in this area, in which we have over 70% of the market share.

In January 2011, the central government announced a new low-income housing policy. Under this policy, 10 million low-income houses will be built in 2011, with a total of 36 million low-income houses to be built over a five-year period. To ensure the construction of the low-income housing, the central government has announced that it will increase its investment in the project by 34.7% over its 2010 investment to approximately $16.6 billion (RMB 103 billion), and the local governments are expected to increase their investment as well.

As part of this policy, the Shaanxi provincial government also targeted to build 470,000 low-income houses in 2011, covering approximately 30 million square meters, which is 2.5 times the amount of low-income houses initiated in 2010. This will generate a stable demand for steel construction within the Shaanxi Province.

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In January 2011, the Shaanxi provincial government announced that it will invest approximately $12.2 billion (RMB 80 billion) in the construction of hydro projects, which is three times the amount invested during the 11th Five Year National Economic and Social Development Plan. In addition to hydro projects, according to the central government, 5,000 kilometers of high-speed railway will be built in 2011, with 16,000 total kilometers to be built by 2020.

In May 2011, the central government passed the Cheng-Yu Economic Zone Plan focusing on Chongqing City and Sichuan Province, covering 206,000 square kilometers, to further accelerate the development of the Western region of China. We anticipate that in the near future, the demand for our products will increase in those areas, and we expect that our expanded production capacity will be able to successfully meet the increase in demand. Furthermore, we have a sales office located in Chengdu to help facilitate such increased demand.

In February 2012, the government approved the Western Development 12th Five Year Plan, which continues the efforts to develop the Western regions. The Plan is centered on the infrastructure and construction, highlighted by the development of economic zones, construction of roads/railway and hydro project, which drive the local demand for steel products.

As of the date of this report, we are not aware of any updates to these announcements.

We anticipate strong demand for our products driven by these and many other construction and infrastructure projects. We believe there will be sustained regional demand for several years as both the central and provincial governments continue to drive Western region development efforts.

At Baotou Steel Pipe Joint Venture, energy sector growth, which spurs the need to transport oil, natural gas and steam, drives demand for spiral-weld steel pipe. Presently, demand is fueled by smaller pipeline projects and municipal energy infrastructure projects within the Inner Mongolia Autonomous Region.

At Maoming Hengda, infrastructure growth and business development in Maoming city, the surrounding Guangxi cities and the Western region of Guangdong Province, drive demand for our construction steel products. As a third tier city, the industrialization and urbanization of Maoming city is one of the focuses of economic development in the west Guangdong Province.

Supply of Raw Materials

The primary raw materials we use for steel production are iron ore, coke, hot-rolled steel coil and steel billets. Baotou Steel Pipe Joint Venture uses hot-rolled steel coil as its main raw material. Longmen Joint Venture uses iron ore and coke as its main raw materials. Maoming Hengda uses steel billets as its main raw material. Iron ore and coke are the main raw material used to produce hot-rolled steel coil and steel billets. As a result, the prices of iron ore and coke are the primary raw material cost drivers for our products.

Iron Ore

Longmen Joint Venture has 7 million tons of annual crude steel production capacity. At Longmen Joint Venture, approximately 85% of production costs are associated with raw materials, with iron ore being the largest component.

According to the China Iron and Steel Association, approximately 60% of the Chinese domestic steel industry demand for iron ore must be filled by imports. At Longmen Joint Venture, we purchase iron ore from four primary sources: Mulonggou mine (owned by Longmen Joint Venture), Daxigou mine (owned by Long Steel Group, our partner in Longmen Joint Venture), surrounding local mines and mines located abroad. According to the terms of Longmen Joint Venture’s Agreement with the Long Steel Group, we have a first right of refusal for sales from the Daxigou mine and for its development. We presently purchase all of the products from this mine.

Coke

Coke, produced from metallurgical coal (also known as coking coal), is our second most consumed raw material, after iron ore. It requires approximately 550kg to 600kg of coke to make one metric ton of crude steel.

Under the terms of the Unified Management Agreement, our partner, Shaanxi Coal has committed to providing coke and coal to us at a cost not higher than the market price.

Our Longmen Joint Venture facility is located in the center of China’s coal belt. We source all coke used at Longmen Joint Venture from the town in which Longmen Joint Venture is located. This ensures a dependable, local supply and minimum transportation costs.

The sources and/or our top five major suppliers of our raw materials for the three months ended September 30, 2013 are as follows:

		% of Total Raw
	Raw Material	Material				Relationship with
Name of Major Supplier	Purchased		Purchased			Company
Shaanxi Longmen Coal Chemical Industry Co., Ltd.	Coke			5.9	%	Third Party
Shaanxi Electricity Company Weinan Branch	Coke			3.2	%	Third Party
China Railroad Logistics Xi'an Co., Ltd.	Iron Ore			2.4	%	Third Party
Shahe City Feilong Mining Industry Co., Ltd.	Iron Ore			2.1	%	Third Party
Rizhaolu Island Shipping & Trading Co., Ltd.	Coke			1.7	%	Third Party
	Total			15.3	%

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The sources and/or our top five major suppliers of our raw materials for the nine months ended September 30, 2013 are as follows:

		% of Total Raw
	Raw Material	Material			Relationship with
Name of Major Supplier	Purchased	Purchased			Company
Longgang Group Import & Export Co., Ltd.	Iron Ore		7.9	%	Related Party
Shaanxi Longmen Coal Chemical Industry Co., Ltd	Coke		7.9	%	Third Party
Shaanxi Haiyan Coal Chemical Industry Co., Ltd.	Coke		6.1	%	Related Party
Long Steel Group	Iron Ore		4.7	%	Related Party
Shaanxi Electricity Company Weinan Branch	Coke		2.7	%	Third Party
	Total		29.3	%

 Industry Environment

Despite demand growth experienced during 2010 through 2012, recent developments in the Chinese economy, including a projected downgrade in the national GDP in the coming years, the tightening of the monetary policy in the PRC by PRC policy makers on June 20, 2013 by increasing short-term borrowing rates, and the removal of the floor rate charged to customers by the Chinese central bank, may put more financial pressure on the real estate development and construction industries and, by extension, affect product demand in the Chinese steel industry.

At the same time, the overall nationwide steelmaking capacity still exceeds steel demand in China. There is a significant over-capacity in the Chinese steel industry which is putting pressure on operators’ profitability. This became the most significant challenge in the steel manufacturing business. For the nine months of 2013, China’s crude steel production increased by 7.8% to 521.8 million tons from the same period last year, while the consumption of crude steel increased by 7.8% to 488.1 million tons from the same period last year, according to the China Iron & Steel Association. However, due to the rapid economic development and urbanization in the Western region of China, which is the core market we serve, steel demand in the region has seen a stable growth compared to the rest of the country.

For steelmakers, operating performance depends on the volatility of the cost of raw materials. The shortage of these raw materials in the market has allowed suppliers of iron ore and metallurgical coal to rebuild the pricing mechanisms through the shift from annual to shorter-term price contracts. This has created numerous challenges for steelmakers as they must now deal with volatility in raw material prices, as well as maintain margins with fluctuating demand. Over the past two years, we have witnessed perseverance in steel prices that has given iron ore producers an opportunity to increase the prices in the next contract; however the reverse may not be true as steel companies cannot always pass on the rise in iron ore prices to consumers due to the market overcapacity and fragmentation.

On July 12, 2010, the Ministry of Industry & Information Technology Commission enacted the Steel Industry Admittance and Operation Qualifications standards. The new standards specify requirements for all aspects of steel production in China, which include: size of blast furnaces, size of converters, emission of waste water, dust per ton from steel production, quantity of coal used for each process in steel production and output capacity. According to the new standards, blast furnaces under 450 cubic meters are targeted to be eliminated. These standards once again confirmed the central government’s determination to push forward the consolidation of this fragmented industry.  While the operational conditions become more stringent, more small and medium sized companies will likely to aggressively look for valued partners which could lead to opportunities for high quality acquisitions for us. We believe the above government policy will strengthen our position as an industry consolidator by creating quantitative qualified potential acquisition targets.

The Chinese central government has had a long-stated goal to consolidate 70% of domestic steel production among the top ten producers by 2020. Currently, there are approximately over 500 crude steel producers throughout China, and the top ten producers account for approximately 48% of total national output. In December 2011, the central government published an industry target to eliminate 96 million tons of inefficient iron and steel capacity during the 12th five-year plan. The central government had successfully reduced obsolete iron production capacities by 31.9 million tons in 2011. In April 2012, the central government announced its goal of reducing obsolete iron and steel capacities of 17.8 million tons in 2012, and in April 2013, the central government published the industry target of eliminating 10.4 million tons of obsolete iron and steel capacities in 2013.

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Results of Operations for the Three and Nine months ended September 30, 2013

Sales

Three months ended September 30, 2013 compared with three months ended September 30, 2012

The following table sets forth sales and volume in metric tons.

	Three months ended
	September 30, 2013							September 30, 2012						Change			Change
in thousands, except metric														Volume			Sales
tons	Volume		Sales		%			Volume	Sales		%			%			%
Longmen Joint Venture		1,238,689	$	606,446		99.4	%	1,360,226	$	708,974		99.7	%		(8.9)	%		(14.5)	%
Others		18,132		3,649		0.6	%	36,553		2,451		0.3	%		(50.4)	%		48.9	%
Total Sales		1,256,821	$	610,095		100.0	%	1,396,779	$	711,425		100.0	%		(10.0)	%		(14.2)	%

Total sales for the three months ended September 30, 2013 decreased by 14.2% to $610.1 million from $711.4 million for the same period in 2012. The decrease in sales was due to a decrease in sales volume and the average selling price. Longmen Joint Venture comprised approximately 99.4% and 99.7% of total sales for the third quarter of 2013 and 2012, respectively. Sales volume of rebar decreased by 8.9% to 1.24 million metric tons, as compared to 1.36 million metric tons in the same period in 2012. The average selling price of rebar decreased by 6.1% to approximately $489.6 per ton in the third quarter of 2013 compared to approximately $521.2 per ton in the same period in 2012.

Our product demands and prices had been rising in the first three quarters of 2011. As a result of the China and global steel industry over-capacity, Chinese economic control polices and the financial crisis, commodity prices abruptly plummeted in the fourth quarter of 2011. With weakened demand, market forces kicked-in and the price of steel dropped substantially. As such, our sales prices have dropped since the fourth quarter of 2011, evidencing a continued decline. The over-capacity issue continued to impact our results during the third quarter of 2013. Further, the Chinese economy remained weak, which had an indirect impact of affecting our industry, and the selling price of our products continued to decrease during this period in comparison to the same period in 2012.

Our five major customers were distributors and collectively represented approximately 25.5% of our total sales for the three months ended September 30, 2013 as compared to 27.2% of our total sales for the three months ended September 30, 2012. The decrease in the concentration of our five major customers in the third quarter of 2013 as compared to the same period in 2012 was mainly due to the decrease in sales to Long Steel Group and its surrounding Southwest region and shifts in market demands being concentrated in the Northwest region. These five customers included related parties and major distributors owned by the central government. As we are the largest supplier in Shaanxi Province, we maintain a good relationship with these five customers to stabilize our sales channel. 

Nine months ended September 30, 2013 compared with nine months ended September 30, 2012

The following table sets forth sales and volume in metric tons.

	Nine months ended
	September 30, 2013						September 30, 2012						Change			Change
in thousands, except metric													Volume			Sales
tons	Volume		Sales		%			Volume	Sales		%		%			%
Longmen Joint Venture		3,841,985	$	1,903,933	99.4	%		3,751,571	$	2,126,556	99.4	%		2.4	%		(10.5)	%
Others		104,163		11,104	0.6	%		159,259		13,593	0.6	%		(34.6)	%		(18.3)	%
Total Sales		3,946,148	$	1,915,037	100.0	%		3,910,830	$	2,140,149	100.0	%		0.9	%		(10.5)	%

Total sales for the nine months ended September 30, 2013 decreased by 10.5% to $1.9 billion from $2.1 billion for the same period in 2012. The decrease in sales was predominantly due to the decrease in the average selling price. Longmen Joint Venture comprised approximately 99.4% of total sales for both the nine months ended September 30, 2013 and 2012. Sales volume of rebar increased by 2.4% to 3.84 million metric tons, compared to 3.75 million metric tons in the same period in 2012. The average selling price of rebar decreased by 12.6% to approximately $495.6 per ton in the nine months ended September 30, 2013 compared to approximately $566.8 per ton in the same period of 2012.

Our product demands and prices had been rising in the first three quarters of 2011. As a result of the China and global steel industry over-capacity, Chinese economic control polices and the financial crisis, commodity prices abruptly plummeted in the fourth quarter of 2011. With weakened demand, market forces kicked-in and the price of steel dropped substantially. As such, our sales prices have dropped since the fourth quarter of 2011, evidencing a continued decline. The over-capacity issue continued to impact our results during the nine months ended September 30, 2013. Further, the Chinese economy remained weak, which had an indirect impact of affecting our industry, and the selling price of our products continued to decrease during this period in comparison to the same period of 2012. However, our sales volume of rebar in Longmen Joint Venture increased by 2.4% to 3.84 million metric tons in the nine months ended September 30, 2013 from 3.75 million metric tons in the nine months ended September 30, 2012. The increase in sales volume was mainly due to our lowering the selling price of rebar to extend our market share in the Northwest region in the nine months of 2013.

Our five major customers were distributors and collectively represented approximately 23.4% of our total sales for the nine months ended September 30, 2013 as compared to 34.1% of our total sales for the nine months ended September 30, 2012. The decrease in the concentration of our five major customers in the nine months ended September 30, 2013 as compared to the same period in 2012 was mainly due to the decrease in sales to Long Steel Group and its surrounding Southwest region and shifts in market demands being concentrated in the Northwest region. These five customers included related parties and major distributors owned by the central government. As we are the largest supplier in Shaanxi Province, we maintain a good relationship with these five customers to stabilize our sales channel. 

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Cost of Goods Sold

Three months ended September 30, 2013 compared with three months ended September 30, 2012

	Three months ended
	September 30, 2013							September 30, 2012						Change			Change
																	Cost of
			Cost of						Cost of					Volume			Goods Sold
in thousands, except metric tons	Volume		Goods Sold		%			Volume	Goods Sold		%			%			%
Longmen Joint Venture		1,238,689	$	598,324		99.4	%	1,360,226	$	721,853		99.6	%		(8.9)	%		(17.1)	%
Others		18,132		3,540		0.6	%	36,553		3,168		0.4	%		(50.4)	%		11.7	%
Total Cost of Goods Sold		1,256,821	$	601,864		100.0	%	1,396,779	$	725,021		100.0	%		(10.0)	%		(17.0)	%

Our primary cost of goods sold is the cost of raw materials such as iron ore, coke, alloy and scrap steel. The costs of iron ore and coke accounted for approximately 58.8% of our total cost of sales in the third quarter of 2013. The cost of goods sold decreased by 17.0% to $601.9 million in the third quarter of 2013 from $725.0 million in the same period of 2012. The decrease was driven by the 10.0% decrease in sales volume, as well as the decreased unit costs of raw materials as a result of the decline in iron ore and coke purchase prices of approximately 0.9% and approximately 18.3%, respectively, for the three months ended September 30, 2013 as compared to the same period in 2012. As such, the average costs of rebar manufactured decreased 9.0% to approximately $483.0 per ton in the third quarter of 2013 from approximately $530.7 per ton in the same period in 2012.

Nine months ended September 30, 2013 compared with nine months ended September 30, 2012

	Nine months ended
	September 30, 2013						September 30, 2012						Change			Change
																Cost of
		Cost of						Cost of					Volume			Goods Sold
in thousands, except metric tons	Volume	Goods Sold		%			Volume	Goods Sold		%			%			%
Longmen Joint Venture	3,841,985	$	1,927,639		99.5	%	3,751,571	$	2,105,808		99.3	%		2.4	%		(8.5)	%
Others	104,163		10,636		0.5	%	159,259		14,263		0.7	%		(34.6)	%		(25.4)	%
Total Cost of Goods Sold	3,946,148	$	1,938,275		100.0	%	3,910,830	$	2,120,071		100.0	%		0.9	%		(8.6)	%

Our primary cost of goods sold is the cost of raw materials such as iron ore, coke, alloy and scrap steel. The costs of iron ore and coke account for approximately 62.0% of our total cost of sales for the nine months ended September 30, 2013. The cost of goods sold decreased by 8.6% to $1.9 billion in the nine months ended September 30, 2013 from $2.1 billion in the same period of 2012. The decrease was mainly driven by the decreased unit costs of raw materials as a result of the decline in iron ore and coke purchase prices of approximately 7.2% and approximately 24.5%, respectively, for the nine months ended September 30, 2013 as compared to the same period in 2012. As such, the average costs of rebar manufactured decreased 10.6% to approximately $501.7 per ton in nine months ended September 30, 2013 from approximately $561.3 per ton in the same period 2012.

Gross Profit (Loss)

Three months ended September 30, 2013 compared with three months ended September 30, 2012

	Three months ended
	September 30, 2013						September 30, 2012							Change
		Gross Profit		Margin					Gross Profit		Margin			Gross
in thousands, except metric tons	Volume	(Loss)		%			Volume		(Loss)		%			Profit
Longmen Joint Venture	1,238,689	$	8,122		1.3	%		1,360,226	$	(12,879)		(1.8)	%	(163.1)	%
Others	18,132		109		3.0	%		36,553		(717)		(29.3)	%	(115.2)	%
Total Gross Profit (Loss)	1,256,821	$	8,231		1.3	%		1,396,779	$	(13,596)		(1.9)	%	(160.5)	%

Gross profit for the third quarter in 2013 was $8.2 million, or 1.3% of total sales, as compared to a gross loss of $13.6 million, or (1.9)% of total sales in the same period in 2012. The increase in gross margin percentage was mainly attributable to the percentage decrease of average rebar selling price of 6.1% being lower than the percentage decrease of costs of rebar manufactured of 9.0% for the third quarter in 2013 as compared to the same period in 2012.

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Nine months ended September 30, 2013 compared with nine months ended September 30, 2012

	Nine months ended
	September 30, 2013					September 30, 2012					Change
in thousands, except metric tons	Volume	Gross Profit (Loss)		Margin %		Volume	Gross Profit (Loss)		Margin %		Gross Profit
Longmen Joint Venture	3,841,985	$	(23,706)	(1.2)	%	3,751,571	$	20,748	1.0	%		(214.3)	%
Others	104,163		468	4.2	%	159,259		(670)	(4.9)	%		(169.9)	%
Total Gross Profit (Loss)	3,946,148	$	(23,238)	(1.2)	%	3,910,830	$	20,078	0.9	%		(215.7)	%

Gross loss for the nine months ended September 30, 2013 was $23.2 million, or (1.2)% of total sales, as compared to gross profit of $20.1 million, or 0.9% of total sales in the same period in 2012. The decrease in gross margin percentage was mainly attributable to the percentage decrease of average rebar selling price of 12.6% was slightly higher to the percentage decrease of costs of rebar manufactured of 10.6% for the nine months ended September 30, 2013 as compared to the same period in 2012.

Selling, General and Administrative Expenses (“SG&A”)

Three months ended September 30, 2013 compared with three months ended September 30, 2012

(in thousands)	Three months ended
	September 30, 2013			September 30, 2012			Change %
Selling, general and administrative expenses	$	(19,661)		$	(22,787)			(13.7)	%
SG&A expenses as a percentage of total revenue		(3.2)	%		(3.2)	%

SG&A expenses, such as travel expenses and transportation fees, entertainment, employee benefit, training, and travel expenses decreased by 13.7% to $19.7 million for the three months ended September 30, 2013, compared to $22.8 million for the same period in 2012.

Selling expenses decreased by 16.5% to $7.3 million for three months ended September 30, 2013 as compared to $8.7 million in the same period of 2012. The decrease was mainly due to a special fund related to the sales of our products which Longmen Joint Venture received tax exemption for from the PRC tax authorities in 2013 while $1.6 million of the special fund was imposed in the third quarter of 2012. Since this was the first time we are exempted from this type of tax, we do not know whether the local government will grant us this tax exemption in the future.

In addition, general and administrative (“G&A”) expenses were approximately $12.4 million and $14.1 million for three months ended September 30, 2013 and 2012, respectively. The 12.0% decrease was mainly due to the $1.7 million decrease in bad debt expenses in the third quarter of 2013 from the same period of 2012. This decrease was offset by a $0.6 million additional write-off of bad debt expenses resulting from the imposition of a prepaid special fund in the third quarter of 2013.

Nine months ended September 30, 2013 compared with nine months ended September 30, 2012

(in thousands)	Nine months ended
	September 30, 2013			September 30, 2012			Change %
Selling, general and administrative expenses	$	(59,464)		$	(61,548)			(3.4)	%
SG&A expenses as a percentage of total revenue		(3.1)	%		(2.9)	%

SG&A expenses, such as travel expenses and transportation fees, entertainment, employee benefit, training, and travel expenses decreased by 3.4% to $59.5 million for the nine months ended September 30, 2013, compared to $61.5 million for the same period in 2012.

Selling expenses decreased by 11.9% to $24.6 million for nine months ended September 30, 2013 as compared to $27.9 million in the same period of 2012. The decrease was mainly due to a special fund related to the sales of our products for which Longmen Joint Venture received tax exemption from the PRC tax authorities in 2013 while $4.5 million of the special fund was imposed in the nine months ended September 30, 2012, offset by a $0.6 million increase in freight expenses in connection with the 0.9% increase in sales volume for the nine months ended September 30, 2013 as compared to the same period in 2012. Since this was the first time we are exempted from this type of tax, we do not know whether the local government will grant us this tax exemption in the future.

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In addition, G&A expenses were approximately $34.9 million and $33.7 million for nine months ended September 30, 2013 and 2012, respectively. The 3.6% increase was mainly due to the $1.9 million write-off of prepaid special fund offset by a $0.7 million decrease in bad debt expenses.

Change in Fair Value of Profit Sharing Liability

Three months ended September 30, 2013 compared with three months ended September 30, 2012

(in thousands)	Three months ended
	September 30,		September 30,
	2013		2012		Change %
Change in fair value of profit sharing liability	$	41,825	$	-		100.0	%

We have considered the recent changes in China’s economic situation, which includes a new estimation and downgrade of 2014 GDP by major investment bankers in June 2013, and a steel industry outlook reports issued for 2014. Also, there has been a tightening of the monetary policy by the Chinese policy makers since June 20, 2013 by increasing the short-term borrowing rates of approximately 1% in China, and removal of the floor rate charged to customers by the Chinese central bank. As a result, we have re-evaluated our projected operating profit (loss) taking into consideration the recent macroeconomic events in China, as well as our third quarter and year to date operating results. Due to the continued decrease in our rebar selling price, the market slow-down in the third quarter of 2013, and the lack of gross profit recovery as quickly as expected in the third quarter of 2013, we have foreseen a further downward trend in 2014 through 2016 than anticipated in the second quarter of 2013. As such, the fair value of our profit sharing liability has been reduced as compared to our previous estimates and we have recognized a gain of $41.8 million in our income from operations for the three months ended September 30, 2013.

Nine months ended September 30, 2013 compared with nine months ended September 30, 2012

(in thousands)	Nine months ended
	September 30,		September 30,
	2013		2012		Change %
Change in fair value of profit sharing liability	$	107,877	$	-		100.0	%

We have considered the recent changes in China’s economic situation, which includes a new estimation and downgrade of 2014 GDP by major investment bankers in June 2013, and a steel industry outlook reports issued for 2014. Also, there has been a tightening of the monetary policy by the Chinese policy makers since June 20, 2013 by increasing the short-term borrowing rates of approximately 1% in China, and removal of the floor rate charged to customers by the Chinese central bank. As a result, we have re-evaluated our projected operating profit (loss) taking into consideration the recent macroeconomic events in China, as well as our third quarter and year to date operating results. Due to the continued decrease in our rebar selling price, the market slow-down in the third quarter of 2013, and the lack of gross profit recovery as quickly as expected in the nine months ended September 30, 2013, we have foreseen a downward trend in 2014 through 2016 than previously anticipated. As such, the fair value of our profit sharing liability has been reduced as compared to our previous estimates and we have recognized a gain of $107.9 million in our income from operations for the nine months ended September 30, 2013.

Income (Loss) from Operations

Three months ended September 30, 2013 compared with three months ended September 30, 2012

(in thousands)	Three months ended
	September 30,		September 30,
	2013		2012		Change %
Income (loss) from operations	$	30,395	$	(36,383)		(183.5)	%

Income from operations for the three months ended September 30, 2013 was $30.4 million as compared to $36.4 million loss from operations for the same period in 2012. The increase in income from operations was predominantly due to the increase in gross profit and the gain from change in fair value of profit sharing liability.

Nine months ended September 30, 2013 compared with nine months ended September 30, 2012

(in thousands)	Nine months ended
	September 30,		September 30,
	2013		2012		Change %
Income (loss) from operations	$	25,175	$	(41,470)		(160.7)	%

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Income from operations for the nine months ended September 30, 2013 was $25.2 million as compared to $41.5 million loss from operations for the same period in 2012. The increase in income from operations was predominantly due to the gain from change in fair value of profit sharing liability offset by the increase in gross loss.

Other Income (Expense)

Three months ended September 30, 2013 compared with three months ended September 30, 2012

(in thousands)	Three months ended
	September 30,		September 30,
	2013		2012		Change %
Interest income	$	2,835	$	4,337		(34.6)	%
Finance/interest expense		(17,721)		(25,879)		(31.5)	%
Financing cost on capital lease		(7,782)		(10,736)		(27.5)	%
Change in fair value of derivative liabilities		-		(55)		(100.0)	%
Gain on disposal of equipment		17		293		(94.2)	%
Income from equity investment		47		44		6.8	%
Foreign currency transaction gain (loss)		322		(581)		(155.4)	%
Lease income		542		528		2.7	%
Other non-operating income (expense), net		770		2,314		(66.7)	%
Total other expense, net	$	(20,970)	$	(29,735)		(29.5)	%

Total other expense, net, for the three months ended September 30, 2013 was $21.0 million, a 29.5% decrease compared to $29.7 million for the same period in 2012. The decrease was mainly a result of the $8.2 million decrease in finance/interest expenses and the $3.0 million decrease in financing cost on capital lease. The decrease was offset by the $1.5 million decrease in interest income as a result of decrease in loans receivable-related parties. The decrease in finance/interest expenses was mainly a result of the reduction in the amount of bank notes receivable that were redeemed and the amount borrowed from banks and third parties in the third quarter of 2013 as compared to the same period in 2012. We utilized more vendor financings during the third quarter in 2013. As a result, notes receivable early redemption expenses for the three months ended September 30, 2013 amounted to $9.6 million, a $6.7 million or 41.5% decrease from $16.3 million for the same period in 2012, and interest expense on loan borrowings for the three months ended September 30, 2013 amounted to $8.1 million, a $1.5 million or 15.1% decrease from $9.6 million for the same period in 2012.

Nine months ended September 30, 2013 compared with nine months ended September 30, 2012

(in thousands)	Nine months ended
	September 30,		September 30,
	2013		2012		Change %
Interest income	$	8,657	$	13,039		(33.6)	%
Finance/interest expense		(53,577)		(106,566)		(49.7)	%
Financing cost on capital lease		(27,778)		(32,363)		(14.2)	%
Change in fair value of derivative liabilities		1		(48)		(102.1)	%
Gain on disposal of equipment		113		177		(36.2)	%
Income from equity investment		137		80		71.3	%
Foreign currency transaction gain (loss)		448		(1,169)		(138.3)	%
Lease income		1,613		1,588		1.6	%
Other non-operating income (expense), net		1,559		3,316		(53.0)	%
Total other expense, net	$	(68,827)	$	(121,946)		(43.6)	%

Total other expense, net, for the nine months ended September 30, 2013 was $68.8 million, a 43.6% decrease compared to $121.9 million for the same period in 2012. The decrease was mainly a result of a decrease of interest income on loan receivables of $1.8 million offset by a $53.0 million decrease in finance/interest expenses and a $4.6 million decrease in financing costs on capital leases. The decrease in finance/interest expenses was mainly a result of the reduction the amount of bank notes receivable that were redeemed early and the amount borrowed from banks and third parties in the nine months ended September 30, 2013 as compared to the same period in 2012. We utilized more vendor financings during the third quarter in 2013. As a result, notes receivable early redemption expenses for the nine months ended September 30, 2013 amounted to $26.9 million, a $38.7 million or 59.1% decrease from $65.6 million for the same period in 2012, and interest expense on loan borrowings for the nine months ended September 30, 2013 amounted to $26.7 million, a $14.2 million or 34.7% decrease from $40.9 million for the same period in 2012. The decrease in interest expense on loan borrowings for the nine months ended September 30, 2013 as compared to the same period in 2012 was mainly due to the decrease in interest rates on loans from financing sales.

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Income Taxes

For the three months ended September 30, 2013 and 2012, we had total and current income tax provisions for our profitable subsidiaries, amounting to $0.03 million and $0.1 million, respectively. No deferred income tax provision was recorded for the three months ended September 30, 2013 and 2012 as the deferred tax assets had been fully reserved.

For the three months ended September 30, 2013 and 2012, we had effective tax rates of 0.3% and (0.2%), respectively. The negative effective tax rates for the three months ended September 30, 2012 was mainly due to a consolidated loss before income tax while we accrued tax provision for our profitable subsidiaries.

For the nine months ended September 30, 2013 and 2012, we had a total tax provision of $0.2 million and $0.7 million, respectively. For the nine months ended September 30, 2013 and 2012, we had current income tax provisions for our profitable subsidiaries, amounting to $0.2 million and $0.5 million, respectively. For the nine months ended September 30, 2012, we evaluated the deferred tax assets of Longmen Joint Venture and Baotou Steel Pipe Joint Venture and concluded the net operating loss may not be fully realizable and to provide 100% valuation allowance for the deferred tax assets. No deferred income tax benefit was recorded for the nine months ended September 30, 2013 as the resulting deferral of tax assets had been fully reserved because the benefit was not considered to be realizable due to recent historical experience.

For the nine months ended September 30, 2013 and 2012, we had effective tax rates of (0.5%) and (0.4%), respectively. The negative effective tax rates for the three months ended September 30, 2013 and 2012 were mainly due to a consolidated loss before income tax while we needed to accrue tax provision for our profitable subsidiaries.

Net Income (Loss)

Three months ended September 30, 2013 compared with three months ended September 30, 2012

(in thousands)	Three months ended
	September 30,		September 30,
	2013		2012		Change %
Net income (loss)	$	9,400	$	(66,218)		(114.2)	%

Nine months ended September 30, 2013 compared with nine months ended September 30, 2012

(in thousands)	Nine months ended
	September 30,		September 30,
	2013		2012		Change %
Net loss	$	(43,853)	$	(164,095)		(73.3)	%

Net Income (Loss) Attributable to General Steel Holdings, Inc.

Three months ended September 30, 2013 compared with three months ended September 30, 2012

(in thousands)	Three months ended
	September 30,		September 30,
	2013		2012		Change %
Net income (loss)	$	9,400	$	(66,218)		(114.2)	%
Less: Net income (loss) attributable to the noncontrolling interest		5,599		(24,620)		(122.7)	%
Net income (loss) attributable to General Steel Holdings, Inc.	$	3,801	$	(41,598)		(109.1)	%

Net income attributable to us for the three months ended September 30, 2013 increased to $3.8 million as compared to $41.6 million net loss attributable to us for the same period in 2012. The increase in net income attributable to us for the three months ended September 30, 2013 was mainly a result of a $8.2 million gross profit, a $41.8 million increase in change in fair value of profit sharing liability and a $8.2 million decrease in finance/interest expense for the three months ended September 30, 2013.

We have subsidiaries in which we do not have a 100% ownership interest. Allocation of income or loss to these non-controlling interests is based on the percentage of their equity investment multiplied by the subsidiaries’ net income or loss.

Nine months ended September 30, 2013 compared with nine months ended September 30, 2012

(in thousands)	Nine months ended
	September 30,		September 30,
	2013		2012		Change %
Net loss	$	(43,853)	$	(164,095)		(73.3)	%
Less: Net loss attributable to the noncontrolling interest		(10,939)		(61,336)		(82.2)	%
Net loss attributable to General Steel Holdings, Inc.	$	(32,914)	$	(102,759)		(68.0)	%

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Net loss attributable to us for the nine months ended September 30, 2013 decreased to $32.9 million compared to $102.8 million for the same period in 2012. The decrease in net loss attributable to us for the nine months ended September 30, 2013 was mainly a result of a gross loss of $23.2 million offset by a $107.9 million gain from change in fair value of profit sharing liability and a decrease in finance/interest expense of $53.0 million for the nine months ended September 30, 2013.

We have subsidiaries in which we do not have a 100% ownership interest. Allocation of income or loss to these non-controlling interests is based on the percentage of their equity investment times the subsidiaries’ net income or loss.

Liquidity and capital resources

As of September 30, 2013, our current liabilities exceeded the current assets by approximately $1.1 billion. Given our expected capital expenditure in the foreseeable future, we have comprehensively considered our available sources of funds as follows:

· Financial support and credit guarantee from related parties; and

· Other available sources of financing from domestic banks and other financial institutions given our credit history.

Based on the above considerations, management and our Board of Directors is of the opinion that we have sufficient funds to meet our working capital requirements and debt obligations as they become due. As a result, our unaudited condensed consolidated financial statements for the period ended September 30, 2013 have been prepared on a going concern basis.

As of September 30, 2013, we had cash and restricted cash aggregating $467.9 million, of which $405.8 million was restricted.

We believe our cash flows generated from operations and financing, which include customer prepayments and vendor financing, existing cash balances, and credit facilities will be adequate to finance our working capital requirements, fund capital expenditures, make required debt and interest payments, pay taxes, and support our operating strategies.

The steel business is capital intensive and we utilize leverage greater than our industry peers, which we believe enables us to generate revenue compared to our shareholder equity at a rate higher than our industry peers. We utilize leverage in the form of credit from banks, vendor financing and customer deposits and from other sources. This blended form of financing reduces our reliance on any single source.

Substantially all our operations are conducted in China and all of our revenues are denominated in Renminbi (RMB). RMB is subject to the exchange control regulation in China, and, as a result, we may have difficulty distributing any dividends outside of China due to the PRC's exchange control regulations that restrict its ability to convert RMB into U.S. Dollars.

Under applicable PRC regulations, foreign-invested enterprises in the PRC may pay dividends only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, a foreign-invested enterprise in the PRC is required to set aside at least 10.0% of its after-tax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reaches 50.0% of its registered capital. These reserves are not distributable as cash dividends. The board of directors of a foreign-invested enterprise has the discretion to allocate a portion of its after-tax profits to staff welfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation. Under PRC law, RMB is currently convertible into U.S. Dollars under a company’s “current account,” which includes dividends, trade and service-related foreign exchange transactions, without prior approval of the State Administration of Foreign Exchange (SAFE), but is not from a company’s “capital account,” which includes foreign direct investments and loans, without the prior approval of the SAFE.

As of September 30, 2013, the amount of our restricted net assets in our profitable subsidiaries in the PRC was $29.3 million.

We have previously raised money in the U.S. capital markets which provides the capital needed for our operation and for General Steel Investment Co, Ltd. (“General Steel Investment”). Thus the foreign currency restrictions and regulations in the PRC on the dividends distribution will not have a material impact on the liquidity, financial condition and results of operation of our Company and General Steel Investment.

Although the steel industry is slowing down due to over-capacity issues in the PRC, in order for us to stay competitive, we continue to look for opportunities to improve the efficiency on our production lines. In addition to the 1,200,000 metric ton capacity rebar production renovation of an existing 800,000 metric ton capacity rebar production line that we brought online in November 2010, in July 2011, we also brought online a 1,000,000 metric ton capacity high speed wire production line. These two newly installed production lines were both relocated from the Maoming Hengda (as defined below) facility and are expected to consume less energy when running at maximum efficiencies compared to our previous production line. In September 2012 we began the construction of a 900,000 metric ton capacity rebar production line, which was completed and put into test production in July 2013. In March 2013, we began the construction of a 1,200,000 metric ton capacity rebar production line for the purpose of reducing our reprocessing cost and to increase our profit margin. The 1,200,000 metric ton capacity rebar production lines require additional capital resources of approximately $14.2 million which was completed and put into test production by November 2013. Any future facility expansion will require additional financing and/or equity capital and will be dependent upon the availability of financing arrangements and capital at the time.

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Short-term Notes Payable

As of September 30, 2013, we had $988.0 million in short-term notes payable liabilities, which were secured by restricted cash of $405.8 million and restricted notes receivable of $237.2 million. These are lines of credit extended by banks for a maximum of six months and are used to finance working capital. The short-term notes payable must be paid in full at maturity and credit availability is continued upon payment at maturity. There are no additional significant financial covenants. We pay zero interest on this type of credit as this is a monetary tool used by China’s central bank to control liquidity over the Chinese monetary system.

Short-term Loans – Banks

As of September 30, 2013, we had $254.9 million in short-term bank loans. These were bank loans with a one year maturity and must be paid in full upon maturity. PRC banks have not been impacted as heavily by the financial crisis as U.S. banks and we believe our current creditors will renew their loans to us after our loans mature as they did in the past.

We are able to repay our short-term notes payables and short term bank loans upon maturity using available capital resources.

For more details about our debt, see Note 9 in our Notes to the unaudited condensed consolidated financial statements included in this report.

For more details about our related party debt financing, see Note 20 in our Notes to the unaudited condensed consolidated financial statements included in this report.

As part of our working capital management, Longmen Joint Venture has entered into a number of sale and purchase back contracts (“Contracts”) with third party companies and two 100% owned subsidiaries of Longmen Joint Venture, named Yuxin Trading Co., Ltd. (“Yuxin”) and Yuteng Trading Co., Ltd. (“Yuteng”). Pursuant to the Contracts, Longmen Joint Venture sells rebar to the third party companies at a certain price, and within the same month, Yuxin and Yuteng will purchase back the rebar from the third party companies at a price between 4.2% to 5.9% higher than the original selling price from Longmen Joint Venture. Based on the Contract terms, Longmen Joint Venture is paid in advance for the rebar sold to the third party companies and Yuxin and Yuteng are given a credit period of several months to one year for the purchase back of the inventory from the third party companies. There is no physical movement of the inventory during the sale and purchase back arrangement. The margin between 4.2% to 5.9% is determined by reference to the bank loan interest rates at the time when the Contracts are entered into, plus an estimated premium based on the financing sale amount, which represents the interest charged by the third party companies for financing Longmen Joint Venture through the above sale and purchase back arrangement. As such, the revenue and cost of goods sold arising from the above transactions are recorded on a net basis and the incremental amounts paid by Yuxin and Yuteng to purchase back the goods are treated as financing costs in the consolidated financial statements.

Total financing sales for the three months ended September 30, 2013 and 2012 amounted to $166.3 million and $307.1 million, respectively, which were eliminated in our consolidated financial statements. The financial cost related to financing sales for the three months ended September 30, 2013 and 2012 amounted to $1.1 million and $2.1 million, respectively.

Total financing sales for the nine months ended September 30, 2013 and 2012 amounted to $519.5 million and $600.8 million, respectively, which were eliminated in our consolidated financial statements. The financial cost related to financing sales for the three months ended September 30, 2013 and 2012 amounted to $4.2 million and $6.8 million, respectively.

Liquidity

Our accounts have been prepared in accordance with U.S. GAAP on a going concern basis. The going concern basis assumes that assets are realized and liabilities are extinguished in the ordinary course of business at amounts disclosed in the financial statements. Our ability to continue as a going concern depends upon aligning our sources of funding (debt and equity) with our expenditure requirements and repayment of the short-term debt facilities as and when they fall due.

The steel business is capital intensive and as a normal industry practice in the PRC, we are highly leveraged. Debt financing in the form of short term bank loans, loans from related parties, financing sales, bank acceptance notes, and capital leases have been utilized to finance the working capital requirements and the capital expenditures of our Company. As a result, our debt to equity ratio as of September 30, 2013 and December 31, 2012 were (6.6) and (7.1), respectively. As of September 30, 2013, our current liabilities exceed current assets (excluding non-cash item) by $1.1 billion.

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Longmen Joint Venture, as our most important operating subsidiary, accounted for the majority of our total sales. As such, the majority of our working capital needs to come from Longmen Joint Venture. Our ability to continue as a going concern depends heavily on Longmen Joint Venture’s operations. Longmen Joint Venture has obtained different types of financial supports, which include line of credit from banks, vendor financing, financing sales, other financing and sales representative financing.

With the financial support from the banks and the companies above, management is of the opinion that we have sufficient funds to meet our future operations, working capital requirements and debt obligations until the end of September 30, 2014. The detailed breakdown of Longmen Joint Venture’s estimated cash flows items are listed below.

	Cash inflow (outflow)
	(in millions)
	For the twelve months ended
	September 30, 2014
Current liabilities over current assets (excluding non-cash items) as of September 30, 2013 (unaudited)	$	(1,072.0)
Projected cash financing and outflows:
Cash provided by line of credit from banks		110.8
Cash provided by vendor financing		815.0
Cash provided by financing sales		81.5
Cash provided by other financing		77.4
Cash provided by sales representatives		30.0
Cash projected to be used in operations in the twelve months ended September 30, 2014		(28.6)
Net projected change in cash for the twelve months ended September 30, 2014	$	14.1

As a result, the unaudited condensed consolidated financial statements for the nine month period ended September 30, 2013 have been prepared on a going concern basis.

Cash-flow

Operating Activities

Net cash provided by operating activities for the nine months ended September 30, 2013 was $14.0 million as compared to net cash used in operating activities of $90.1 million in the same period of 2012. This change was mainly due to the combination of the following factors:

· The impact of some non-cash items included in net loss of $(16.7) million as compared to $97.4 million in the same period in 2012. The non-cash items include the following:

- Depreciation, amortization and depletion;

- change in fair value of derivative liabilities;

- (gain) loss on disposal of equipment;

- provision for doubtful accounts;

- reservation of mine maintenance fee;

- stock issued for service and compensation;

- amortization of deferred financing cost on capital lease;

- loss from equity investments;

- foreign currency transaction gain;

- deferred tax assets;

- deferred lease income; and

- change in fair value of profit sharing liability.

· The primary reasons for the material fluctuations in cash inflow were as follows:

- Notes receivable: The decrease of notes receivable was mainly due to our acceptance of fewer notes receivables as a substitute for cash receipts during the nine months ended September 30, 2013;

- Accounts receivable – related parties: The decrease of accounts receivable – related parties was mainly due to the decrease in sales to related parties while we sold less rebar to these related parties during the first nine months ended September 30, 2013;

- Inventory: The decrease in inventories in the nine months of 2013 was mainly due to the continued decrease in the cost of raw materials and increase in the consumption of raw materials to keep up with the increased sales volume and construction projects;

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- Accounts payable: The increase in accounts payable was mainly due to Longmen Joint Venture making more purchases during the nine months ended September 30, 2013 as compared to the same period in 2012. Pursuant to the supplier financing agreements signed between Longmen Joint Venture and its suppliers, those suppliers agreed not to demand certain cash payment for a certain period.

· The primary reasons for material fluctuations in cash outflow were as follows:

- Other receivables – related parties: The increase was mainly due to an increase in receivables incurred with related parties for equipment we sold to these related parties and for cash flow purpose for doing business on our behalf;

- Advance on inventory purchases – related parties: The increase was mainly due to more advance payments were made to related parties for raw material purchases to meet future production capacity. Advance payment is a prevailing requirement on iron ore purchases in the steel production industry;

- Other payables, including related parties: The decrease in other payables, including related parties was mainly due to an increase in payables being paid to various third parties and related parties in the nine months ended September 30, 2013 compared to the prior year; and

- Customer deposits, including related parties: The decrease was mainly due to the Chinese and global steel industry over-capacity which led to lower demands of our products from our customers, as such, we received fewer advanced payments made by our customers.

Investing activities

Net cash used in investing activities was $146.6 million and $123.2 million for the nine months ended September 30, 2013 and 2012, respectively. Fluctuation in cash outflow between the two periods was mainly due to the increase of restricted cash and the increase in construction in process as the construction of a new rebar production line and other various factory building projects are near completion. Restricted cash was used as a pledge for our notes payable as required by the bank. In the first nine months of 2013, such balance increased along with the increase in the outstanding balance of notes payable to settle with our suppliers.

Financing activities

Net cash provided by financing activities was $146.8 million and 175.4 million for the nine months ended September 30, 2013 and 2012, respectively. Compared to the same period in 2012, the increase of cash inflow from financing activities was mainly driven by the following:

· Capital contributed by noncontrolling interest: On August 16, 2013, additional capital of $45.1 million (or RMB 280 million) was contributed to Tianwu Joint Venture with $27.0 million (or RMB 168 million) contributed by us and $18.0 million (or RMB 112 million) contributed by TME Group, the noncontrolling shareholder. Our controlling interest in Tianwu Joint Venture remains 60%;

· Short term loans: We borrowed more from banks and related parties for the nine months ended September 30, 2013 as compared to the same period in 2012.

The cash inflow was offset by the following cash outflow:

· Short term notes payable: We repaid fewer notes payable to banks for the nine months ended September 30, 2013 as they became due as compared to the same period in 2012 and borrowed fewer notes payable from the banks during the period as we utilized more vendor financing during this period, which allowed us to decrease our borrowings on notes payable;

· Short term loans: We repaid fewer loans to third parties for the nine months ended September 30, 2013 as they became due as compared to the same period in 2012; and

· Current maturities of long-term loans – related party: We repaid more current maturities of long-term loans to our related party for the nine months ended September 30, 2013 as they became due as compared to the same period in 2012.

There are no restrictions to distribute or transfer other funds from General Steel Investment to us.

We have never declared or paid any cash dividends to our shareholders. If there are any declaration and payment of dividends, this, as well as the amount of dividends declared and paid will be subject to our By-Laws, charter and applicable Chinese and U.S. state and federal laws, including the approval from the shareholders of each subsidiary which intends to declare such dividends, if applicable.

 Impact of Inflation

We are subject to commodity price risks arising from price fluctuations in the market prices of the raw materials. We have generally been able to pass on cost increases through price adjustments. However, the ability to pass on these increases depends on market conditions influenced by the overall economic conditions in China. We manage our price risks through productivity improvements and cost-containment measures. We do not believe that inflation risk is material to our business or our financial position, results of operations or cash flows.

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Compliance with Environmental Laws and Regulations

Longmen Joint Venture:

Together with our joint venture partners Long Steel Group and Shaanxi Steel, we have invested RMB 580 million in a series of comprehensive projects to reduce our waste emissions of coal gas, water, and solid waste. In 2005, we received ISO 14001 certification for our overall environmental management system. We have received several awards from the Shaanxi provincial government as a result of our increased effort in environmental protection.

We have spent in excess of $9.1 million (RMB 57 million) on a comprehensive waste water recycling and water treatment system. The 2,000 cubic meter/h treatment capacity systems were implemented at the end of 2005. In 2010, 1.08 metric tons of new water was consumed per metric ton of steel produced.

We have one 10,000 cubic meter coke-oven gas tank, one 50,000 cubic meter blast furnace coal gas tank and one 80,000 cubic meter converter furnace coal gas tank to collect the residual coal gas produced from our facility and that of surrounding enterprises. We also have spent $36.6 million (RMB 230 million) on a thermal power plant with two 25 Kilowatt generators that use the residual coal gas from the blast furnaces and converters as fuel to generate power.

We have several plants to further process solid waste generated from the steel making process into useful products such as construction materials, building blocks, porcelain tiles, curb tops, ornamental tiles, as well as other products.

In 2009, we treated and recycled about 6.8 million tons of waste water, 335,320 tons of slag, 130 million m³ of gas from the converters and 6.1 billion m³ of gas from the blast furnaces. We also reused 855,714 tons of hot steam and generated 433 million KWH of electricity.

During 2010 and 2012, more than $9.6 million (RMB 60 million) were used on the technical upgrade and renovation of our converters and $0.88 billion (RMB 5.5 billion) were used on the upgrade of the blast furnaces and sintering machines.

In 2012, we installed desulfidation equipment for two sintering machines, which started operating in June 2012.

Off-balance Sheet Arrangements

There were no off-balance sheet arrangements for the period ended September 30, 2013 that have or that, in the opinion of management, are likely to have a current or future material effect on our financial condition or results of operations.

Contractual Obligations and Commercial Commitments

We have certain fixed contractual obligations and commitments that include future estimated payments. Changes in our business needs, cancellation provisions, changing interest rates, and other factors may result in actual payments differing from the estimates. We cannot provide certainty regarding the timing and amounts of payments. Throughout our operating history, we have funded our contractual obligations and commercial commitments through financing arrangements and operating cash flow, including but not limited to, the operating income, payments collected from the customers in advance and stock issuances. Below, we have presented a summary of the most significant contractual obligations and commercial commitments in the tables, in order to assist in the review of this information within the context of our consolidated financial position, results of operations, and cash flows.

The following tables summarize our contractual obligations as of September 30, 2013 and the effect these obligations are expected to have on our liquidity and cash flows in future periods.

	Principal due by period
			Less than
Contractual obligations	Total		1 year		1-3 years		3- 5 years		5 years after
	(in thousands)
Note payable	$	987,988	$	987,988	$	-	$	-	$	-
Bank loans		254,929		254,929		-		-		-
Other loans, including related parties		179,059		179,059		-		-		-
Deposits due to sales representatives, including related parties		29,993		29,993		-		-		-
Lease obligations		23,987		1,445		1,239		1,118		20,185
Construction obligations - Longmen Joint Venture		211,625		211,625		-		-		-
Long term loan – Shaanxi Steel		72,346		47,896		24,450		-		-
Capital lease obligation		354,576		-		96,517		21,685		236,374
Profit sharing liability		241,090		-		-		-		241,090
Total	$	2,355,593	$	1,712,935	$	122,206	$	22,803	$	497,649

Bank loans in the PRC are due either on demand or, more typically, within one year. These loans can be renewed with the banks subject to bank’s credit reevaluation. This amount includes estimated interest payments as well as principal repayment.

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As of September 30, 2013, Longmen Joint Venture guaranteed bank loans for related parties and third parties, including lines of credit, amounting to $304.6 million, as follows:

	Guarantee
Nature of guarantee	amount		Guaranty Due Date
	(In thousands)
Line of credit	$	178,931	Various from October 2013 to August 2015
Three-party financing agreements		42,315	Various from October 2013 to January 2014
Confirming storage		19,951	Various from December 2013 to September 2014
Financing by the rights of goods delivery in future		63,374	Various from December 2013 to March 2015
Total	$	304,571

As of September 30, 2013, we did not accrue any liability for the amount the Group has guaranteed for third and related parties because those parties are current in their payment obligations and we have not experienced any loss from providing guarantees. We evaluated the debt guarantees and concluded that the likelihood of having to make payments under the guarantees is remote and that the fair value of the stand-ready obligation under these commitments is not material.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of its financial condition and results of operations are based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. Our unaudited condensed consolidated financial statements reflect the selection and application of accounting policies which require management to make significant estimates and judgments. See Note 2 to our unaudited Condensed Consolidated Financial Statements “Summary of Significant Accounting Policies”. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

We believe that the following reflect the more critical accounting policies that currently affect our financial condition and results of operations.

Principles of consolidation – subsidiaries

The accompanying unaudited condensed consolidated financial statements include the financial statements of our Company, our subsidiaries, our variable interest entity (“VIE”) for which our Company is the ultimate primary beneficiary, and the VIE’s subsidiaries.

The unaudited condensed consolidated financial statements have been prepared on a historical cost basis to reflect the financial position and results of operations of our Company in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Subsidiaries are those entities in which our Company, directly or indirectly, controls more than one half of the voting power or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors. 

A VIE is an entity in which our Company, or our subsidiary, through contractual arrangements, bears the risks of, and enjoys the rewards normally associated with, ownership of the entity, and therefore our Company or our subsidiary is the primary beneficiary of the entity.

All significant inter-company transactions and balances have been eliminated upon consolidation.

Consolidation of VIE

Prior to entering into the Unified Management Agreement on April 29, 2011, Longmen Joint Venture had been consolidated as our 60% direct owned subsidiary. Upon entering into the Unified Management Agreement on April 29, 2011, Longmen Joint Venture was evaluated by our Company to determine if Longmen Joint Venture is a VIE and if we are the primary beneficiary.

Based on the projected profit in this entity and future operating plans, Longmen Joint Venture’s equity at risk is considered insufficient to finance its activities and therefore Longmen Joint Venture is considered to be a VIE.

We would be considered the primary beneficiary of the VIE if we have both of the following characteristics:

a.	The power to direct the activities of the VIE that most significantly impact the VIE’s economic performance; and
b.	The obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

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A Supervisory Committee was formed during the negotiation of the Unified Management Agreement. Given there is both a Supervisory Committee and a board of directors with respect to Longmen Joint Venture, the rights and roles of both bodies were considered to determine which has the authority to direct the activities of Longmen Joint Venture, and by extension, whether we continue to have the authority to direct Longmen Joint Venture’s activities after this Supervisory Committee was formed. The Supervisory Committee, for which we hold 2 out of 4 seats, requires a ¾ majority vote, while the board of directors, which we hold 4 out of 7 seats, requires a simple majority vote. As the Supervisory Committee’s role is limited to supervising and monitoring management of Longmen Joint Venture and in the event there is any disagreement between the board of directors and the Supervisory Committee, the board of directors prevails. In other words, the Supervisory Committee is considered to be subordinate to the board of directors. Thus, the board of directors of Longmen Joint Venture continues to be the controlling decision-making body with respect to Longmen Joint Venture. We control 60% of the voting rights of the board of directors, have control of the operations of Longmen Joint Venture and as such, have the authority to direct the activities of the VIE that most significantly impact Longmen Joint Venture ’s economic performance.

In connection with the Unified Management Agreement, Shaanxi Coal, Shaanxi Steel and we may provide such support on a discretionary basis in the future, which could expose us to a loss.

As discussed in Note 1 to Condensed Consolidated Financial Statements - Background, we have the obligation to absorb losses and the rights to receive benefits based on the profit allocation as stipulated by the Unified Management Agreement. As both conditions are met, we are the primary beneficiary of Longmen Joint Venture and therefore, continue to consolidate Longmen Joint Venture.

We believe that the Unified Management Agreement between Longmen Joint Venture and Shaanxi Coal is in compliance with PRC law and is legally enforceable. The Board of Directors of Longmen Joint Venture continues to be the controlling decision-making body with respect to Longmen Joint Venture. We control 60% of the voting rights of the board of directors and have control over the operations of Longmen Joint Venture. As such, we have the authority to direct the activities of the VIE. However, uncertainties in the PRC legal system could limit our ability to enforce the Unified Management Agreement, which in turn, may lead to reconsideration of the VIE assessment.

Longmen Joint Venture has two 100% owned subsidiaries, Yuxin Trading Co., Ltd. (“Yuxin”) and Yuteng Trading Co., Ltd (“Yuteng”). In addition, Longmen Joint Venture has two consolidated subsidiaries, Hualong Fire Retardant Material Co., Ltd. (“Hualong”) and Beijing Huatianyulong International Steel Trading Co., Ltd. (“Huatianyulong”), in which Longmen Joint Venture does not hold a controlling interest. Hualong and Huatianyulong are separate legal entities which were established in the PRC as limited liability companies and subsequently acquired by Longmen Joint Venture in June 2007 and July 2008, respectively. Prior to and subsequent to their acquisition by Longmen Joint Venture, these two entities have been operating as self-sustaining integrated sets of activities and assets conducted and managed for the purpose of providing a return to shareholders consisting of all the inputs, processes and outputs of a business. However, these two entities do not meet the definition of variable interest entities. Further consideration was given to whether consolidation was appropriate under the voting interest model, specifically where the power of control may exist with a lesser percentage of ownership (i.e. less than 50%), for example, by contract, lease, agreement with other stockholders or by court decree.

Hualong

Longmen Joint Venture, the single largest shareholder, holds a 36.0% equity interest in Hualong. The other two shareholders, who own 34.67% and 29.33% respectively, assigned their voting rights to Longmen Joint Venture in writing at the time of the acquisition of Hualong. The voting rights have been assigned through the date Hualong ceases its business operation or the other two shareholders sell their interest in Hualong. Hualong’s main business is to supply refractory.

Huatianyulong

Longmen Joint Venture holds a 50.0% equity interest in Huatianyulong and the other unrelated shareholder holds the remaining 50.0%. The other shareholder assigned its voting rights to Longmen Joint Venture in writing at the time of acquisition of Huatianyulong. The voting rights have been assigned through the date Huatianyulong ceases its business operation or the other unrelated shareholder sells its interest in Huatianyulong. Huatianyulong mainly sells imported iron ore.

We have determined that it is appropriate for Longmen Joint Venture to consolidate these two entities with appropriate recognition in our financial statements of the non-controlling interests in each entity, beginning on the acquisition dates as these were also the effective dates of the agreements with other stockholders granting a majority voting rights in each entity, and thereby, the power of control, to Longmen Joint Venture.

Revenue recognition

We follow the generally accepted accounting principles in the United States regarding revenue recognition. Sales were recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, we have no other significant obligations and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are recorded as customer deposits. Sales represent the invoiced value of goods, net of value-added tax (VAT). All our products sold in the PRC are subject to a Chinese VAT at a rate of 13% to 17% of the gross sales price. This VAT may be offset by VAT paid by us on raw materials and other materials included in the cost of producing the finished product.

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Accounts receivable, other receivables and allowance for doubtful accounts

Accounts receivable include trade accounts due from customers and other receivables from cash advances to employees, related parties or third parties. An allowance for doubtful accounts is established and recorded based on managements’ assessment of potential losses based on the credit history and relationships with the customers. Management reviews its receivable on a regular basis to determine if the bad debt allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable.

 Useful lives of plant and equipment

Plant and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets with a 3%-5% residual value. The depreciation expense on assets acquired under capital leases is included with depreciation expense on owned assets.

The estimated useful lives are as follows:

Buildings and Improvements	10-40 Years
Machinery	10-30 Years
Machinery and equipment under capital lease	20 Years
Other equipment	5 Years
Transportation Equipment	5 Years

We have re-evaluated the useful lives of depreciation and amortization to determine whether subsequent events and circumstances warrant any revision.

Impairment of long-lived assets

The carrying values of long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Based on the existence of one or more indicators of impairment, we measure any impairment of long-lived assets using the projected discounted cash flow method. The estimation of future cash flows requires significant management judgment based on our historical results and anticipated results and is subject to many factors.

The discount rate that is commensurate with the risk inherent in our business model is determined by our management. An impairment charge would be recorded if we determined that the carrying value of long-lived assets may not be recoverable. The impairment to be recognized is measured by the amount by which the carrying values of the assets exceed the fair value of the assets.

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the accompanying unaudited condensed consolidated financial statements and accompanying footnotes. Significant accounting estimates reflected in our unaudited condensed consolidated financial statements include the useful lives of and impairment for property, plant and equipment, and potential losses on uncollectible receivables, the recognition of contingent liabilities, the interest rate used in financing sales, the fair value of the assets recorded under capital lease, the present value of the net minimum lease payments of the capital lease and the fair value of the profit share liability. Actual results could differ from these estimates.

Financial instruments

The accounting standard regarding “Disclosures about fair value of financial instruments” defines financial instruments and requires disclosure of the fair value of financial instruments held by us. We consider the carrying amount of cash, accounts receivable, other receivables, accounts payable and accrued liabilities to approximate their fair values because of the short period of time between the origination of such instruments and their expected realization. For short-term loans and notes payable, we concluded the carrying values are a reasonable estimate of fair value because of the short period of time between the origination and repayment and their stated interest rate approximates current rates available.

We also analyze all financial instruments with features of both liabilities and equity under the accounting standard establishing, “Accounting for certain financial instruments with characteristics of both liabilities and equity,” the accounting standard regarding “Accounting for derivative instruments and hedging activities” and “Accounting for derivative financial instruments indexed to, and potentially settled in, a company’s own stock.” Additionally, we analyze registration rights agreements associated with any equity instruments issued to determine if penalties triggered for late filing should be accrued under accounting standard establishing “Accounting for registration payment arrangements.”

Fair value measurements

The accounting standards regarding fair value of financial instruments and related fair value measurement define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosures requirements for fair value measures. The three levels are defined as follow:

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Level 1: inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2: inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

Level 3: inputs to the valuation methodology are unobservable and significant to the fair value.

We determined that the carrying value of the profit sharing liability using Level 3 inputs by taking consideration of the present value of our projected profits/losses with the discount interest rate of 7.3% based on our average borrowing rate. The projected profits/losses in Longmen Joint Venture were based upon, but not limited to, the following assumptions until April 30, 2031:

· projected selling units and growth in the steel market;

· projected unit selling price in the steel market;

· projected unit purchase cost in the coal and iron ore markets;

· selling and general and administrative expenses to be in line with the growth in the steel market; and

· projected bank borrowings.

The above assumptions were reviewed by us at September 30, 2013 and we changed those assumptions as compared to the assumptions used at December 31, 2012 because of the changes in market conditions in the PRC. Based on the updated information from the banks, GDP report and operating results from the three and nine months ended September 30, 2013, all of the above information indicated a downward trend in the steel manufacturing industry in the coming years. As a result, we re-evaluated the fair value of the 40% profit sharing liability as of the beginning of the period ended June 30, 2013 and September 30, 2013 and recorded a gain on change in fair value of profit sharing liability of $41.8 million and $107.9 million for the three and nine months ended September 30, 2013, respectively.

If there will be any slight changes in any of the assumptions that we used, the fair value of the profit sharing liability will be changed accordingly. If we would reduce the projected bank borrowings rate by 1.0% and other factors remained unchanged, our profit sharing liability as of the beginning of the period ended September 30, 2013 would have been $254.9 million and we would reduce a gain on the change in the fair value of profit sharing liabilities by $32.9 million. If we would reduce the projected selling units and growth in the steel market rate by 1.0% and other factors remained unchanged, our profit sharing liability as of the beginning of the period ended September 30, 2013 would have been $214.3 million and we would increase a gain on the change in the fair value of profit sharing liabilities by $8.3 million.

Income Taxes

Income tax

We did not conduct any business and did not maintain any branch office in the United States during the three months ended September 30, 2013 and 2012. Therefore, no provision for withholding of U.S. federal or state income taxes has been made. The tax impact from undistributed earnings from overseas subsidiaries is not recognized as there is no intention for future repatriation of these earnings.

General Steel (China) is located in Tianjin Costal Economic Development Zone and is subject to an income tax rate of 25%.

Longmen Joint Venture is located in the Mid-West Region of China. It qualifies for the “Go-West” tax rate of 15% promulgated by the government. In 2010, the central government announced that the “Go-West” tax initiative was extended for 10 years, and thus, the preferential tax rate of 15% will be in effect until 2020. This special tax treatment will be evaluated on a year-to-year basis by the local tax bureau.

Baotou Steel Pipe Joint Venture is located in Inner Mongolia autonomous region and is subject to an income tax rate of 25%.

Maoming Hengda is located in Guangdong Province and is subject to an income tax rate of 25%.

Tianwu Joint Venture is located in Tianjin Coastal Economic Development Zone and is subject to an income tax rate at 25%.

Capital lease obligations

On April 29, 2011, we, along with Longmen Joint Venture entered into a Unified Management Agreement with Shaanxi Steel and Shaanxi Coal under which Longmen Joint Venture uses the new iron and steel making facilities including one sintering machine, two converters, two blast furnaces and other auxiliary systems constructed by Shaanxi Steel. As the 20-year term of the agreement exceeds 75% of the assets’ useful lives, this arrangement is accounted for as a capital lease. The ongoing lease payments are comprised of two elements: (1) a monthly payment based on Shaanxi Steel’s cost to construct the new iron and steel making facilities of $2.3 million (RMB 14.6 million) to be paid over the term of the Unified Management Agreement of 20 years; and (2) 40% of any remaining pre-tax profits from the Asset Pool which includes Longmen Joint Venture and the newly constructed iron and steel making facilities. The profit sharing component does not meet the definition of contingent rent because it is based on future revenue and is therefore considered part of the minimum lease payment for purposes of determining the value of the leased asset and obligation at the inception of the lease, however, the lease liability is then reduced by the value of the profit sharing component, which is recognized as a separate financial liability carried at fair value. See Note 16 – “Profit sharing liability” in the Notes to Condensed Consolidated Financial Statements.

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Profit sharing liability

The profit sharing liability is recognized initially at its estimated fair value at the lease commencement date and included in the initial measurement and recognition of the capital lease in addition to the fixed payment component of the minimum lease payments. Subsequently, this financial instrument is accounted for separately from the lease accounting (Note 15 – “Capital lease obligations” in the Notes to Condensed Consolidated Financial Statements). The initial fair value of the expected payments under the profit sharing component of the Unified Management Agreement is accreted over the term of the agreement using the effective interest method. The value of the profit sharing liability will be reassessed each reporting period with any changes reflected prospectively in the estimate of the effective interest rate.

Based on the performance of the Asset Pool, no profit sharing payment was made for the nine months ended September 30, 2013. Payments for the profit sharing are only made to Shaanxi Steel to the extent any accumulated losses from the Asset Pool have been fully absorbed by profits.

ITEM 4. CONTROLS AND PROCEDURES

Our Company, with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the design and operation of our disclosure controls and procedures, as defined under Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of September 30, 2013. Our Company’s disclosure controls and procedures are designed (i) to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

During our evaluation of the effectiveness of our disclosure controls and procedures and our internal control over financial reporting, we identified a material weakness related to not having sufficient personnel with appropriate levels of accounting knowledge and experience to address complex U.S. GAAP accounting issues and to prepare and review financial statements and related disclosures under U.S. GAAP. Specifically, our disclosure controls and procedures did not operate effectively to ensure the appropriate and timely analysis of and accounting for unusual and non-routine transactions and certain financial statement accounts.

As a result of such material weakness, we concluded that our disclosure controls and procedures were not effective as of September 30, 2013.

Remediation  

We have dedicated significant resources to ensure that we take proper steps to improve our disclosure controls and procedures and our internal control over financial reporting in the areas of accounting for complex and non-routine transactions.

We have taken a number of remediation actions that we believe will impact the effectiveness of our disclosure controls and procedures and our internal control over financial reporting including the following:

· We have engaged outside professional consulting firms to supplement us with our internal control over financial reporting assessment and testing;

· We have implemented an internal review process over financial reporting to review all recent accounting pronouncements and to verify that any accounting treatment identified in such report has been fully implemented and confirmed by our outside professional consultants, and we continue to improve our ongoing review and supervision of our internal control over financial reporting; and

· We have established an enhanced training program, including, but not limited to, accounting and auditing updates, and review of consolidated guidance of variable interest entities, to update our employees on current accounting pronouncements.

We believe the foregoing efforts will effectively remediate the material weakness described above in the future.

Changes in Internal Controls over Financial Reporting

Except as otherwise noted above, there has not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 

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PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are subject to certain legal proceedings, claims and disputes that arise in the ordinary course of our business. Although we cannot predict the outcomes of these legal proceedings, we do not believe these actions, in the aggregate, will have a material adverse impact on our financial position, results of operations or liquidity. We are currently not a party to any material legal proceedings.

ITEM 1A. RISK FACTORS

To our knowledge and to the extent additional factual information disclosed in this Quarterly Report on Form 10-Q relates to such risk factors, there have been no other changes in the risk factors described in “ITEM 1A. RISK FACTORS” in our Annual Report on Form 10-K for the year ended December 31, 2012, filed with the SEC on June 17, 2013, and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, filed with the SEC on August 6, 2013.

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ITEM 6. EXHIBITS

3.1 Articles of Incorporation of General Steel Holdings, Inc. (included as Exhibit 3.1 to the Form SB-2 filed with the Commission on June 6, 2003 and incorporated herein by reference).

3.2 Amendment to the Articles of Incorporation dated February 22, 2005 (included as Exhibit 3.2 to the Form 10-K filed March 16, 2010 and incorporated herein by reference).

3.3 Amendment to the Articles of Incorporation dated November 14, 2007 (included as Exhibit 3.3 to the Form 10-K filed March 16, 2010 and incorporated herein by reference).

3.4 Certificate of Designation of Series A Preferred Stock of the registrant (included as Exhibit 10.6 to the Form 10-K filed June 30, 2008 and incorporated herein by reference).

3.5 Bylaws of General Steel Holdings, Inc. (included as Exhibit 3.5 to the Form 10-K filed March 16, 2010 and incorporated herein by reference).

31.1* Certification of the CEO (Principal Executive Officer) pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as filed herewith.

31.2* Certification of the CFO (Principal Financial Officer) pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as filed herewith.

32.1*	Certification of the CEO (Principal Executive Officer) pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as filed herewith.
32.2*	Certification of the CFO (Principal Financial Officer) pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as filed herewith.

101.INS***	XBRL Instance Document
101.SCH***	XBRL Taxonomy Extension Schema Document
101.CAL***	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF***	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB***	XBRL Taxonomy Extension Label Linkbase Document
101.PRE***	XBRL Taxonomy Extension Presentation Linkbase Document

*** XBRL (Extensive Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

*Filed herewith.  

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	General Steel Holdings, Inc.
Date: November 12, 2013	By:	/s/ Zuosheng Yu
		Zuosheng Yu
		Chief Executive Officer and Chairman
Date: November 12, 2013	By:	/s/ John Chen
		John Chen
		Director and Chief Financial Officer

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EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Zuosheng Yu, certify that:

1. I have reviewed this quarterly report on Form 10-Q of General Steel Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 12, 2013	By:	/s/ Zuosheng Yu
		Zuosheng Yu
		Chief Executive Officer

 

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John Chen, certify that:

1. I have reviewed this quarterly report on Form 10-Q of General Steel Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 12, 2013	By:	/s/ John Chen
		John Chen
		Chief Financial Officer

 

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of General Steel Holdings, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Zuosheng Yu, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 12, 2013	By:	/s/ Zuosheng Yu
		Zuosheng Yu
		Chief Executive Officer

 

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of General Steel Holdings, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John Chen, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 12, 2013	By:	/s/ John Chen
		John Chen
		Chief Financial Officer

 

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Statutory reserves (Details Textual) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Contributions To Statutory Reserve Fund Percentage	10.00%
Maximum Percentage Of Reserve Fund Balance	50.00%
Minimum Percentage Of Reserve Fund Balance	25.00%
Contributions To Special Reserve	$ 0.7	$ 0.9
Utilisation Of Special Reserve	$ 0.4	$ 0.9

XML

Supplemental disclosure of cash flow information (Details Textual) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Interest Paid, Net	$ 11.5	$ 20.2
Income Taxes Paid	0.3	0.1
Minority Interest Ownership By Parent Carrying Value		8.0
Dividend Receivables Value	0.2	0.1
Disposal Of Equipment Value	1.0
Conversion Of Accounts and Other Payable To Short Term Loan		48.0
Repayment For Advances On Inventory Purchases	119.9	29.9
Inventory Productions, Equipment Conversion	1.0
Inventory Utilized In Plant and Equipment Construction	37.3
Repayment Of Accounts Payable Related Party	64.2	0
Reclassification Of Inventory Purchases Refundable Advances Related Parties To Other Receivables Related Parties	3.8
Construction in Progress Expenditures Incurred but Not yet Paid	18.7
Tongxing [Member]
Land Use Rights Carrying Value		3.6
Settlement With Payable In Cash		0.3
Transfer Of Dividend Receivable To Two Individuals		$ 0.9
Long Steel Group [Member]
Noncontrolling Interest, Ownership Percentage by Parent		22.76%

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Debt (Details 1) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Short term loans - bank	$ 254,929	$ 147,124
General Steel China Loans From Various Banks In China [Member]
Short term loans - bank	38,973	32,189
Longmen Joint Venture Loans from various banks in China [Member]
Short term loans - bank	$ 215,956	$ 114,935

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Debt (Details 3) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Short term loans - related parties	$ 48,889	$ 79,557
Baotou Steel Loans From Tianjin Hengying Trading Co Ltd [Member]
Short term loans - related parties	3,430	4,133
General Steel China Loans From Tianjin Hengying Trading Co Ltd [Member]
Short term loans - related parties	0	15,416
General Steel China Loans From Tianjin Dazhan Industry Co Ltd [Member]
Short term loans - related parties	0	21,397
General Steel China Loans From Beijing Shenhua Xinyuan Metal Materials Co Ltd [Member]
Short term loans - related parties	1,395	1,359
General Steel China Loans From Yangpu Capital Automobile [Member]
Short term loans - related parties	1,451	1,413
Longmen Joint Venture Loan from Shaanxi Coal and Chemical Industry Group Co Ltd [Member]
Short term loans - related parties	33,580	0
Longmen Joint Venture Loans From Financing Sales [Member]
Short term loans - related parties	$ 9,033	$ 35,839

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Related party transactions and balances (Details 10) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Dec. 31, 2012
Other payables - related parties	$ 106,153	$ 106,153	$ 73,025
Tianjin Hengying Trading Co Ltd [Member]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Other payables - related parties	876	876	2,770
Long Steel Group [Member]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture	Noncontrolling shareholder of Longmen Joint Venture
Other payables - related parties	51,919	51,919	60,180
Shaanxi Steel [Member]
Related Party Relationship	Majority shareholder of Long Steel Group	Majority shareholder of Long Steel Group
Other payables - related parties	44,173	44,173	0
Wendlar Investment Management Group Co Ltd [Member]
Related Party Relationship		Common control under CEO
Other payables - related parties	911	911	836
Yangpu Capital Automobile [Member]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Other payables - related parties	254	254	141
Xi'an Pinghe Metallurgical Raw Material Co Ltd [Member]
Related Party Relationship	Noncontrolling shareholder of Long Steel Group	Noncontrolling shareholder of Long Steel Group
Other payables - related parties	0	0	4,761
Tianjin Dazhan Industry Co Ltd [Member]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Other payables - related parties	4,020	4,020	3,695
Maoming Shengze Trading Co Ltd [Member]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Other payables - related parties	1,566	1,566	0
Victory Energy Resource Co Ltd [Member]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Other payables - related parties	1,375	1,375	0
Others [Member]
Related Party Relationship	Entities either owned or have significant influence by our affiliates or management	Entities either owned or have significant influence by our affiliates or management
Other payables - related parties	$ 1,059	$ 1,059	$ 642

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Taxes (Details 1) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Beginning balance	$ 72,891	$ 47,703
Current period addition	12,776	25,180
Current period reversal	(857)	0
Deconsolidation of Tongxing	0	(216)
Exchange difference	2,125	224
Ending balance	$ 86,935	$ 72,891

XML

Related party transactions and balances (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Related Party Transaction, Purchases from Related Party	$ 146,438	$ 203,085	$ 573,922	$ 771,113
Long Steel Group [Member]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture		Noncontrolling shareholder of Longmen Joint Venture
Related Party Transaction, Purchases from Related Party	101,606	123,637	376,104	453,947
Hancheng Haiyan Coking Co Ltd [Member]
Related Party Relationship	Noncontrolling shareholder of Long Steel Group		Noncontrolling shareholder of Long Steel Group
Related Party Transaction, Purchases from Related Party	31,331	47,487	148,322	195,861
Xi'an Pinghe Metallurgical Raw Material Co Ltd [Member]
Related Party Relationship	Noncontrolling shareholder of Long Steel Group		Noncontrolling shareholder of Long Steel Group
Related Party Transaction, Purchases from Related Party	1,181	16,674	13,678	83,251
Shaanxi Long Steel Group Baoji Steel Rolling Co Ltd [Member]
Related Party Relationship	Subsidiary of Long Steel Group		Subsidiary of Long Steel Group
Related Party Transaction, Purchases from Related Party	0	1,568	53	5,332
Shaanxi Junlong Rolling Co Ltd [Member]
Related Party Relationship	Investee of Long Steel Group		Investee of Long Steel Group
Related Party Transaction, Purchases from Related Party	1	2,257	212	4,417
Shaanxi Huafu New Energy Co Ltd [Member]
Related Party Relationship	Significant influence by the Long Steel Group		Significant influence by the Long Steel Group
Related Party Transaction, Purchases from Related Party	10,529	10,322	28,618	24,347
Beijing Daishang Trading Co Ltd [Member]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		Noncontrolling shareholder of Longmen Joint Venture’s subsidiary
Related Party Transaction, Purchases from Related Party	1,726	1,049	6,635	3,653
Others [Member]
Related Party Relationship	Entities either owned or have significant influence by our affiliates or management		Entities either owned or have significant influence by our affiliates or management
Related Party Transaction, Purchases from Related Party	$ 64	$ 91	$ 300	$ 305

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Convertible notes and derivative liabilities

9 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

Convertible Notes and Derivative Liabilities [Text Block]

Note 12 – Convertible notes and derivative liabilities

The Company had 3,900,871 outstanding warrants in connection with the $40 million convertible notes issued in 2007, which expired on May 13, 2013, and 2,777,778 warrants in connection with a registered direct offering in 2009, which expired on June 24, 2012. The aforementioned warrants met the definition of a derivative instrument in the accounting standards and are recorded at their fair value on each reporting date. The change in the value of the derivative liabilities is charged against or credited to income each period.

The fair value of the warrants as of December 31, 2012 was calculated using the Cox Rubenstein Binomial model based on the following variables:

	December 31, 2012
Expected volatility		86	%
Expected dividend yield		0	%
Risk-free interest rate		0.08	%
Expected lives		0.36 years
Market price	$	0.99
Strike price	$	5.00

As of September 30, 2013 and December 31, 2012, derivative liabilities, which were included in other payables and accrued liabilities in the consolidated balance sheets, amounted to $0 and $1.0 thousand, respectively.

The Company has the following warrants outstanding:

Outstanding as of December 31, 2011	6,678,649
Granted	-
Forfeited / expired	(2,777,778)
Exercised	-
Outstanding as of December 31, 2012	3,900,871
Granted	-
Forfeited / expired	(3,900,871)
Exercised	-
Outstanding as of September 30, 2013	-

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Summary of significant accounting policies (Details 6) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Financing Amount	$ 77.4
Company E [Member]
Financing period covered	January 7, 2013 – January 6, 2015
Company F [Member]
Financing period covered	January 7, 2013 – January 6, 2015
Company G [Member]
Financing period covered	January 7, 2013 – January 6, 2015
Company H [Member]
Financing Amount	16.3
Financing period covered	November 7 2013 – November 7 2015
Company I [Member]
Financing Amount	16.3
Financing period covered	November 6 2013 – November 6 2015
Other Financing [Member] | Company E [Member]
Financing Amount	16.3
Other Financing [Member] | Company F [Member]
Financing Amount	21.2
Other Financing [Member] | Company G [Member]
Financing Amount	$ 7.3

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
SALES	$ 514,549	$ 518,542	$ 1,534,330	$ 1,441,325
SALES - RELATED PARTIES	95,546	192,883	380,707	698,824
TOTAL SALES	610,095	711,425	1,915,037	2,140,149
COST OF GOODS SOLD	511,932	528,586	1,550,829	1,426,589
COST OF GOODS SOLD - RELATED PARTIES	89,932	196,435	387,446	693,482
TOTAL COST OF GOODS SOLD	601,864	725,021	1,938,275	2,120,071
GROSS PROFIT (LOSS)	8,231	(13,596)	(23,238)	20,078
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	(19,661)	(22,787)	(59,464)	(61,548)
CHANGE IN FAIR VALUE OF PROFIT SHARING LIABILITY	41,825	0	107,877	0
INCOME (LOSS) FROM OPERATIONS	30,395	(36,383)	25,175	(41,470)
OTHER INCOME (EXPENSE)
Interest income	2,835	4,337	8,657	13,039
Finance/interest expense	(25,503)	(36,615)	(81,355)	(138,929)
Change in fair value of derivative liabilities	0	(55)	1	(48)
Gain on disposal of equipment	17	293	113	177
Income from equity investments	47	44	137	80
Foreign currency transaction gain (loss)	322	(581)	448	(1,169)
Lease income	542	528	1,613	1,588
Other non-operating income (expense), net	770	2,314	1,559	3,316
Other expense, net	(20,970)	(29,735)	(68,827)	(121,946)
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES AND NONCONTROLLING INTEREST	9,425	(66,118)	(43,652)	(163,416)
PROVISION FOR INCOME TAXES
Current	25	100	201	510
Deferred	0	0	0	169
Provision for income taxes	25	100	201	679
NET INCOME (LOSS)	9,400	(66,218)	(43,853)	(164,095)
Less: Net income (loss) attributable to noncontrolling interest	5,599	(24,620)	(10,939)	(61,336)
NET INCOME (LOSS) ATTRIBUTABLE TO GENERAL STEEL HOLDINGS, INC.	3,801	(41,598)	(32,914)	(102,759)
NET INCOME (LOSS)	9,400	(66,218)	(43,853)	(164,095)
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustments	(2,547)	(698)	(12,283)	(577)
COMPREHENSIVE INCOME (LOSS)	6,853	(66,916)	(56,136)	(164,672)
Less: Comprehensive income (loss) attributable to noncontrolling interest	4,782	(24,888)	(15,508)	(61,721)
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO GENERAL STEEL HOLDINGS, INC.	$ 2,071	$ (42,028)	$ (40,628)	$ (102,951)
WEIGHTED AVERAGE NUMBER OF SHARES
Basic and Diluted (in shares)	55,141	54,466	54,976	54,946
LOSS PER SHARE
Basic and Diluted (in dollars per share)	$ 0.07	$ (0.76)	$ (0.60)	$ (1.87)

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Inventories

9 Months Ended

Sep. 30, 2013

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

Note 5 – Inventories

Inventories consist of the following:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Supplies	$	23,302	$	23,123
Raw materials		138,951		141,503
Finished goods		22,527		57,630
Less: allowance for inventory valuation		(7,397)		(9,585)
Total inventories	$	177,383	$	212,671

Raw materials consist primarily of iron ore and coke at Longmen Joint Venture. The cost of finished goods includes direct costs of raw materials as well as direct labor used in production. Indirect production costs at normal capacity such as utilities and indirect labor related to production such as assembling, shipping and handling costs for purchasing are also included in the cost of inventory.

The Company values its inventory at the lower of cost or market, determined on a weighted average method, or net realizable value. As of September 30, 2013 and December 31, 2012, the Company had provided allowance for inventory valuation in the amounts of $7.3 million and $9.6 million, respectively.

Movement of allowance for inventory valuation is as follows:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Beginning balance	$	9,585	$	38,143
Addition		7,305		9,582
Less: write-off		(9,722)		(38,519)
Exchange rate effect		229		379
Ending balance	$	7,397	$	9,585

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Commitment and contingencies (Details 2) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Guarantor Obligations, Current Carrying Value	$ 304,571
Yichang Zhongyi Industrial Co., Ltd [Member]
Guaranty Obligations, Guaranty Due Date	June 2014
Guarantor Obligations, Current Carrying Value	25,428
Jinmen Desheng Metallurty Co., Ltd [Member]
Guaranty Obligations, Guaranty Due Date	August 2014
Guarantor Obligations, Current Carrying Value	3,260
Shaanxi Hongan Material Co., Ltd. [Member]
Guaranty Obligations, Guaranty Due Date	Various from October to December 2013
Guarantor Obligations, Current Carrying Value	5,379
Chengdu Zhongyi Steel Co., Ltd. [Member]
Guaranty Obligations, Guaranty Due Date	December 2013
Guarantor Obligations, Current Carrying Value	3,977
Shaanxi Huatai Huineng Group, Ltd. [Member]
Guaranty Obligations, Guaranty Due Date	March 2014
Guarantor Obligations, Current Carrying Value	24,450
Hancheng Sanli Furnace Burden Co., Ltd. [Member]
Guaranty Obligations, Guaranty Due Date	March 2015
Guarantor Obligations, Current Carrying Value	16,300
Xi'an Kaiyuan Steel Sales Co., Ltd [Member]
Guaranty Obligations, Guaranty Due Date	Various from November 2013 to January 2014
Guarantor Obligations, Current Carrying Value	3,733
Shaanxi Baolong Industry Co Ltd [Member]
Guaranty Obligations, Guaranty Due Date	November 2013
Guarantor Obligations, Current Carrying Value	2,347
Xi’an Laisheng Logistics Co., Ltd [Member]
Guaranty Obligations, Guaranty Due Date	May 2014
Guarantor Obligations, Current Carrying Value	4,303
Shaanxi Anlin Logistics Co., Ltd [Member]
Guaranty Obligations, Guaranty Due Date	Various from December 2013 to April 2014
Guarantor Obligations, Current Carrying Value	7,726
Shaanxi Longan Industrial Development Co., Ltd [Member]
Guaranty Obligations, Guaranty Due Date	November 2013
Guarantor Obligations, Current Carrying Value	3,978
Long Steel Group [Member]
Guaranty Obligations, Guaranty Due Date	Various from October 2013 to August 2015
Guarantor Obligations, Current Carrying Value	74,819
Hancheng Haiyan Coking Co Ltd [Member]
Guaranty Obligations, Guaranty Due Date	Various from October 2013 to January 2014
Guarantor Obligations, Current Carrying Value	42,315
Tianjin Dazhan Industry Co Ltd [Member]
Guaranty Obligations, Guaranty Due Date	Various from January 2014 to March 2015
Guarantor Obligations, Current Carrying Value	44,238
Tianjin Hengying Trading Co Ltd [Member]
Guaranty Obligations, Guaranty Due Date	Various from January to July 2014
Guarantor Obligations, Current Carrying Value	19,637
Long Steel Group Fuping Rolling Steel Co Ltd [Member]
Guaranty Obligations, Guaranty Due Date	Various from January to June 2014
Guarantor Obligations, Current Carrying Value	11,271
Tianjin Qiu Steel Pipe Industry Co Ltd [Member]
Guaranty Obligations, Guaranty Due Date	April 2014
Guarantor Obligations, Current Carrying Value	$ 11,410

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Earnings (Loss) per share

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

Note 19 – Earnings (Loss) per share

The computation of earnings (loss) per share is as follows:

 (in thousands, except per share data)

	For the three		For the three
	months ended		months ended
	September 30, 2013		September 30, 2012
Income (loss) attributable to holders of common stock	$	3,801	$	(41,598)
Basic and diluted weighted average number of common shares outstanding		55,141		54,466
Earnings (loss) per share
Basic and diluted	$	0.07	$	(0.76)

	For the nine		For the nine
	months ended		months ended
	September 30, 2013		September 30, 2012
Loss attributable to holders of common stock	$	(32,914)	$	(102,759)
Basic and diluted weighted average number of common shares outstanding		54,976		54,946
Loss per share
Basic and diluted	$	(0.60)	$	(1.87)

The Company had warrants exercisable for 3,900,871 shares of the Company’s common stock at September 30, 2012. For the three and nine months ended September 30, 2012, all outstanding warrants were excluded from the diluted earnings per share calculation since they are anti-dilutive. 

Other than the aforementioned potentially dilutive securities, there were no other potentially dilutive securities outstanding for the three and nine months ended September 30, 2013 and 2012.

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Related party transactions and balances (Details 15) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Beginning balance			$ 77,199	$ 78,524	$ 78,524
Less: Lease income realized	(542)	(528)	(1,613)	(1,588)	(2,119)
Exchange rate effect			2,072		794
Ending balance	77,658		77,658		77,199
Current portion	(2,178)		(2,178)		(2,120)
Noncurrent portion	$ 75,480		$ 75,480		$ 75,079

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Advances on inventory purchases (Details Textual) (USD $) In Millions, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Advances On Inventory Purchases Including Related Parties	$ 109.5	$ 126.1

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Summary of significant accounting policies (Details 9) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Beginning balance			$ 328,828	$ 303,243	$ 303,243
Change in fair value of profit sharing liability	(41,800)		(107,877)		0
Current period interest expense accreted			12,440		22,499
Change of derivative liabilities charged to earnings	0	(55)	1	(48)	9
Exchange rate effect			7,698		3,077
Ending balance	$ 241,090		$ 241,090		$ 328,828

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Supplemental disclosure of cash flow information

9 Months Ended

Sep. 30, 2013

Supplemental Cash Flow Elements [Abstract]

Cash Flow Supplemental Disclosures [Text Block]

Note 13 - Supplemental disclosure of cash flow information

Interest paid, net of capitalized, amounted to $11.5 million and $20.2 million for the nine months ended September 30, 2013 and 2012, respectively.

The Company paid income tax amounted to $0.3 million and $0.1 million for the nine months ended September 30, 2013 and 2012, respectively.

During the nine months ended September 30, 2013, the Company had receivables of $1.0 million as a result of the disposal of equipment that has not been collected.

During the nine months ended September 30, 2013, the Company converted $1.0 million of equipment into inventory productions.

During the nine months ended September 30, 2013, the Company used $37.3 million inventory in plant and equipment constructions.

During the nine months ended September 30, 2013 and 2012, the Company offset $64.2 million and $0, respectively, accounts payable to related party as loan receivable – related party repayment.

During the nine months ended September 30, 2013 and 2012, the Company offset $119.9 million and $29.9 million, respectively, advance on inventory purchases and other receivables to related parties as short-term loan repayments.

During the nine months ended September 30, 2013, the Company reclassified $3.8 million refundable advances on inventory purchase – related parties to other receivables – related parties.

During the nine months ended September 30, 2013, the Company incurred $18.7 million accounts payable to be paid for constructions in process.

During the nine months ended September 30, 2013 and 2012, one of the Company’s unconsolidated entities declared dividend and the Company was entitled for the dividend amounted to $0.2 million and $0.1 million, respectively, which was not yet collected.

During the nine months ended September 30, 2012, the Company sold its 22.76% equity interest of Tongxing at the carrying value of $8.0 million to two individuals who are representatives from Long Steel Group, a related party. In connection with this transaction, the Company received a land use rights from Tongxing at carrying value for $3.6 million and settled with a payable in cash of $0.3 million that the Company has not been paid. In addition, the Company determined that dividend receivables of $0.9 million will be transferring to the two individuals and will not be collected from Tongxing after these transactions.

During the nine months ended September 30, 2012, the Company converted $48.0 million of our accounts payable and other payables from our related parties to short term loans upon the execution of the loan agreements.

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Deferred lease income (Details Textual)	3 Months Ended		9 Months Ended		12 Months Ended		3 Months Ended		12 Months Ended
	Sep. 30, 2013 USD ($)	Sep. 30, 2012 USD ($)	Sep. 30, 2013 USD ($)	Sep. 30, 2012 USD ($)	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)	Dec. 31, 2010 Longmen Joint Venture [Member] USD ($)	Dec. 31, 2010 Longmen Joint Venture [Member] CNY	Dec. 31, 2011 Longmen Joint Venture [Member] USD ($)	Dec. 31, 2011 Longmen Joint Venture [Member] CNY	Dec. 30, 2010 Longmen Joint Venture [Member] USD ($)	Dec. 30, 2010 Longmen Joint Venture [Member] CNY
Deferred Revenue Leases Reimbursement For Dismantled Assets							$ 11,400,000	70,100,000
Deferred Revenue Leases Reimbursement For Loss Of Efficiency							29,800,000	183,100,000
Deferred Revenue Leases Reimbursement For Trial Production Costs									14,600,000	89,300,000	14,600,000	89,500,000
Deferred Revenue Leases Deferred Depreciation Cost Free Use Period									7,200,000	43,900,000
Deferred Revenue Leases Lease Income Realized	542,000	528,000	1,613,000	1,588,000	2,119,000
Deferred Revenue, Leases, Net	77,658,000		77,658,000		77,199,000	78,524,000
Deferred Revenue, Leases, Current	$ 2,178,000		$ 2,178,000		$ 2,120,000

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Summary of significant accounting policies (Details 1) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Current assets	$ 1,373,967	$ 1,407,045
Plant and equipment, net	1,250,542	1,167,836
TOTAL ASSETS	2,672,026	2,650,682
Total liabilities	(3,145,136)	(3,086,691)
Variable Interest Entities and Subsidiary [Member]
Current assets	1,253,672	1,285,967
Plant and equipment, net	1,239,805	1,154,811
Other noncurrent assets	44,475	72,428
TOTAL ASSETS	2,537,952	2,513,206
Total liabilities	(3,006,938)	(2,943,761)
Net liabilities	$ (468,986)	$ (430,555)

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Debt (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Percentage Of Transaction Fee			0.05%
Restricted Cash and Cash Equivalents Guarantee For Notes Payable	$ 405.8		$ 405.8		$ 322.7
Restricted Notes Receivable Guarantee For Notes Payable	237.2		237.2		345.8
Debt To Asset Ratio Maximum	20.00%		20.00%		85.00%
Debt To Asset Ratio	117.70%		117.70%		116.40%
Short Term Borrowings, Default	6.4		6.4		12.7
Financing Sales	166.2	307.1	519.5	600.8
Financial Services Costs	1.1	2.1	4.2	6.8
Interest Costs Capitalized	1.3	0.2	2.1	0.6
Interest Expense, Debt	15.5	36.6	54.5	138.9
General Steel China Notes Payable To Various Banks In China [Member]
Restricted Cash and Cash Equivalents Guarantee For Notes Payable	24.5		24.5		6.3
Debt Instrument Maturity Dates			various dates from October 2013 to March 2014
Longmen Joint Venture Loans From Various Unrelated Companies and Individuals [Member]
Debt Instrument Maturity Dates			various dates from October 2013 to February 2014
Debt, Weighted Average Interest Rate	5.20%		5.20%		6.00%
Longmen Joint Venture Notes Payable To Various Banks In China [Member]
Restricted Cash and Cash Equivalents Guarantee For Notes Payable	381.3		381.3		237.2
Restricted Notes Receivable Guarantee For Notes Payable	316.4		316.4		345.8
Debt Instrument Maturity Dates			various dates from October 2013 to August 2014
Longmen Joint Venture Loans From Shaanxi Steel Group [Member]
Debt Instrument Maturity Dates			November 2015
Debt, Weighted Average Interest Rate	5.60%		5.60%		5.90%
Baotou Steel Loans From Tianjin Hengying Trading Co Ltd [Member]
Debt, Weighted Average Interest Rate	10.00%		10.00%
General Steel China Loans From Tianjin Hengying Trading Co Ltd [Member]
Debt, Weighted Average Interest Rate	10.00%		10.00%
General Steel China Loans From Tianjin Dazhan Industry Co Ltd [Member]
Debt, Weighted Average Interest Rate	10.00%		10.00%
General Steel China Loans From Beijing Shenhua Xinyuan Metal Materials Co Ltd [Member]
Debt, Weighted Average Interest Rate	10.00%		10.00%
General Steel China Loans From Yangpu Capital Automobile [Member]
Debt, Weighted Average Interest Rate	10.00%		10.00%
Longmen Joint Venture Loan from Shaanxi Coal and Chemical Industry Group Co Ltd [Member]
Debt Instrument, Maturity Date			Dec. 31, 2013
Debt, Weighted Average Interest Rate	7.00%		7.00%
Longmen Joint Venture Loans from various banks in China [Member]
Restricted Cash and Cash Equivalents Guarantee For Notes Payable	$ 120.0		$ 120.0		$ 76.0
Debt Instrument Maturity Dates			various dates from November 2013 to August 2014
Debt, Weighted Average Interest Rate	6.50%		6.50%		6.80%
General Steel China Loans From Various Banks In China [Member]
Debt Instrument Maturity Dates			various dates from December 2013 to September 2014
Debt, Weighted Average Interest Rate	7.20%		7.20%		7.60%
Maximum [Member]
Debt, Weighted Average Interest Rate					12.00%
Maximum [Member] | Longmen Joint Venture Loans From Various Unrelated Companies and Individuals [Member]
Debt, Weighted Average Interest Rate	5.90%		5.90%		5.90%
Maximum [Member] | Longmen Joint Venture Loans From Financing Sales [Member]
Debt, Weighted Average Interest Rate					5.90%
Minimum [Member]
Debt, Weighted Average Interest Rate	4.70%		4.70%
Minimum [Member] | Longmen Joint Venture Loans From Various Unrelated Companies and Individuals [Member]
Debt, Weighted Average Interest Rate	4.20%		4.20%
Minimum [Member] | Longmen Joint Venture Loans From Financing Sales [Member]
Debt, Weighted Average Interest Rate	4.20%		4.20%

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Summary of significant accounting policies (Details 10)	9 Months Ended
	Sep. 30, 2013
Buildings and Improvements [Member] | Maximum [Member]
Property, Plant and Equipment, Useful Life	40 years
Buildings and Improvements [Member] | Minimum [Member]
Property, Plant and Equipment, Useful Life	10 years
Machinery [Member] | Maximum [Member]
Property, Plant and Equipment, Useful Life	30 years
Machinery [Member] | Minimum [Member]
Property, Plant and Equipment, Useful Life	10 years
Machinery and equipment under capital lease [Member]
Property, Plant and Equipment, Useful Life	20 years
Other equipment [Member]
Property, Plant and Equipment, Useful Life	5 years
Transportation Equipment [Member]
Property, Plant and Equipment, Useful Life	5 years

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Debt (Tables)

9 Months Ended

Sep. 30, 2013

Schedule of Long-term Debt Instruments [Table Text Block]

Long-term loans due to related party

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Longmen Joint Venture: Loans from Shaanxi Steel Group, due November 2015 and interest rate are 5.6% - 5.9% per annum.	$	72,346	$	92,973
Less: Current maturities of long-term loans – related party		(47,896)		(54,885)
Long-term loans - related party	$	24,450	$	38,088

Short Term Notes Payable [Member]

Schedule of Short-term Debt [Table Text Block]

The Company had the following short-term notes payable as of:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
General Steel (China): Notes payable to various banks in China, due various dates from October 2013 to March 2014. Restricted cash required of $24.5 million and $6.3 million as of September 30, 2013 and December 31, 2012, respectively; guaranteed by third parties. These notes payable were either repaid or renewed subsequently on the due dates.	$	37,490	$	12,696
Longmen Joint Venture: Notes payable to various banks in China, due various dates from October 2013 to August 2014. $381.3 million restricted cash and $237.2 million notes receivable are secured for notes payable as of September 30, 2013, and comparatively $316.4 million restricted cash and $345.8 million notes receivable secured as of December 31, 2012, respectively; some notes are further guaranteed by third parties. These notes payable were either repaid or renewed subsequently on the due dates.		950,498		971,117
Total short-term notes payable	$	987,988	$	983,813

Due To Banks [Member]

Schedule of Short-term Debt [Table Text Block]

Due to banks

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
General Steel (China): Loans from various banks in China, due various dates from December 2013 to September 2014. Weighted average interest rate was 7.2% per annum and 7.6% per annum as of September 30, 2013 and December 31, 2012, respectively; some are guaranteed by third parties while others are secured by equipment and inventory. These loans were either repaid or renewed subsequently on the due dates.	$	38,973	$	32,189
Longmen Joint Venture: Loans from various banks in China, due various dates from November 2013 to August 2014. Weighted average interest rate was 6.5% per annum and 6.8% per annum as of September 30, 2013 and December 31, 2012, respectively; some are guaranteed by third parties, restricted cash or notes receivables. $120.0 million and $76.0 million restricted notes receivable were secured for the loans as of September 30, 2013 and December 31, 2012, respectively; These loans were either repaid or renewed subsequently on the due dates.		215,956		114,935
Total short-term loans - bank	$	254,929	$	147,124

Due To Unrelated Parties [Member]

Schedule of Short-term Debt [Table Text Block]

Due to unrelated parties

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Longmen Joint Venture: Loans from various unrelated companies and individuals, due various dates from October 2013 to February 2014, and weighted average interest rate was 5.2% per annum and 6.0% per annum as of September 30, 2013 and December 31, 2012, respectively. These loans were either repaid or renewed subsequently on the due dates.	$	33,294	$	25,324
Longmen Joint Venture: Loans from financing sales.		90,680		115,966
Maoming Hengda: Loans from one unrelated parties and one related party, due on demand, none interest bearing.		6,196		6,033
Total short-term loans – others	$	130,170	$	147,323

Due To Related Parties [Member]

Schedule of Short-term Debt [Table Text Block]

Short term loans due to related parties

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Baotou Steel: Loans from Tianjin Hengying Trading Co., Ltd, due on demand, and interest rates is 10% per annum.	$	3,430	$	4,133
General Steel China: Loans from Tianjin Hengying Trading Co., Ltd., due on demand, and interest rates is 10% per annum.		-		15,416
General Steel China: Loans from Tianjin Dazhan Industry Co, Ltd., due on demand, and interest rates is 10% per annum.		-		21,397
General Steel China: Loans from Beijing Shenhua Xinyuan Metal Materials Co., Ltd., due on demand, and interest rates is 10% per annum.		1,395		1,359
General Steel China: Loans from Yangpu Capital Automobile, due on demand, and interest rates is 10% per annum.		1,451		1,413
Longmen Joint Venture: Loan from Shaanxi Coal and Chemical Industry Group Co., Ltd., due in December 2013, and interest rate is 7.0% per annum.		33,580		-
Longmen Joint Venture: Loans from financing sales.		9,033		35,839
Total short-term loans - related parties	$	48,889	$	79,557

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Retirement plan

9 Months Ended

Sep. 30, 2013

Compensation and Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

Note 22 – Retirement plan

Regulations in the PRC require the Company to contribute to a defined contribution retirement plan for all employees. All the employees of the Company’s entities in China are entitled to a retirement pension amount calculated based upon their salary at their date of retirement and their length of service in accordance with a government managed pension plan. The PRC government is responsible for the pension liability to the retired staff. The Company’s entities in China are required to contribute based on the higher of 20% of the employees’ monthly base salary or 12% of the minimum social average salary of the city where the facilities are located. Employees are required to contribute 8% of their base salary to the plan. The minimum social average salary is announced by the local Social Security bureau and updated annually. Total pension expense incurred by the Company was $2.3 million and $1.7 million for the three months ended September 30, 2013 and 2012, respectively, and for the nine months ended September 30, 2013 and 2012 amounted to $6.4 million and $5.5 million, respectively.

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Equity

9 Months Ended

Sep. 30, 2013

Equity [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

Note 21 - Equity

2013 Equity Transactions

On March 28, 2013, the Company granted senior management and directors 174,900 shares of common stock at $1.01 per share, as compensation under the Company’s 2008 Equity Incentive Plan. The shares were valued at the quoted market price on the grant date.

On June 27, 2013, the Company granted senior management and directors 163,150 shares of common stock at $1.02 per share, as compensation under the Company’s 2008 Equity Incentive Plan. The shares were valued at the quoted market price on the grant date.

On August 16, 2013, an additional $45.1 million (or RMB 280 million) was contributed to Tianwu Joint Venture with $27.0 million (or RMB 168 million) contributed by the Company and $18.0 million (or RMB 112 million) contributed by Tianjin Material and Equipment Group Corporation (“TME Group”). The Company’s controlling interest of Tianwu Joint Venture remains at 60% after the capital contribution.

On September 28, the Company granted senior management and directors 163,150 shares of common stock at $0.88 per share as compensation under the Company’s 2008 Equity Incentive Plan. The shares were valued at the quoted market price on the grant date.

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Related party transactions and balances (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Revenue from Related Parties	$ 95,546	$ 192,883	$ 380,707	$ 698,824
Long Steel Group [Member]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture		Noncontrolling shareholder of Longmen Joint Venture
Revenue from Related Parties	63,793	123,631	226,754	360,820
Sichuan Yutai Trading Co Ltd [Member]
Related Party Relationship	Significant influence by Long Steel Group**		Significant influence by Long Steel Group
Revenue from Related Parties	0	16,998	72	147,847
Shaanxi Yuchang Trading Co Ltd [Member]
Related Party Relationship	Significant influence by Long Steel Group		Significant influence by Long Steel Group
Revenue from Related Parties	1,081	0	21,491	41,433
Shaanxi Haiyan Trade Co Ltd [Member]
Related Party Relationship	Significant influence by Long Steel Group		Significant influence by Long Steel Group
Revenue from Related Parties	85	12,480	15,681	43,015
Shaanxi Shenganda Trading Co Ltd [Member]
Related Party Relationship	Significant influence by Long Steel Group		Significant influence by Long Steel Group
Revenue from Related Parties	19,866	7,599	56,545	34,132
Shaanxi Steel [Member]
Related Party Relationship	Majority shareholder of Long Steel Group		Majority shareholder of Long Steel Group
Revenue from Related Parties	979	25	2,390	634
Shaanxi Long Steel Group Baoji Steel Rolling Co Ltd [Member]
Related Party Relationship	Subsidiary of Long Steel Group		Subsidiary of Long Steel Group
Revenue from Related Parties	9	11,392	2,122	31,485
Shaanxi Junlong Rolling Co Ltd [Member]
Related Party Relationship	Investee of Long Steel Group		Investee of Long Steel Group
Revenue from Related Parties	1,782	20,758	33,075	37,965
Shaanxi Coal and Chemical Industry Group Co Ltd [Member]
Related Party Relationship	Shareholder of Shaanxi Steel		Shareholder of Shaanxi Steel
Revenue from Related Parties	7,951	0	22,577	0
Others [Member]
Related Party Relationship	Entities either owned or have significant influence by our affiliates or management		Entities either owned or have significant influence by our affiliates or management
Revenue from Related Parties	$ 0	$ 0	$ 0	$ 1,493

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Background (Details Textual) In Millions, unless otherwise specified	9 Months Ended			9 Months Ended		9 Months Ended	12 Months Ended
	Sep. 30, 2013	Sep. 30, 2013 General Steel Investment Co Ltd [Member]	Aug. 05, 2002 General Steel Investment Co Ltd [Member]	Sep. 30, 2013 Longmen Joint Venture [Member]	Apr. 29, 2011 Longmen Joint Venture [Member]	Sep. 30, 2013 Shaanxi Iron and Steel Group [Member]	Dec. 31, 2011 Shaanxi Iron and Steel Group [Member]	Apr. 29, 2011 Shaanxi Iron and Steel Group [Member] USD ($)	Apr. 29, 2011 Shaanxi Iron and Steel Group [Member] CNY
Equity Method Investment, Ownership Percentage		100.00%	100.00%	60.00%	60.00%
Iron and Steel Making Facilities								$ 603.2	3,700.0
Unified Management Agreement, Percentage Of Pretax Profit				60.00%		40.00%	40.00%
Unified Management Agreement, Economic Interest	60.00%
Unified Management Agreement, Economic Interest Decreased	36.00%
Percentage Of Overall Capacity	75.00%

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Accounts receivable (including related parties), net (Tables)

9 Months Ended

Sep. 30, 2013

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

Accounts receivable, including related party receivables, net of allowance for doubtful accounts consists of the following:  

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Accounts receivable	$	9,729	$	8,062
Less: allowance for doubtful accounts		(1,152)		(1,367)
Accounts receivable – related parties		3,252		14,966
Net accounts receivable	$	11,829	$	21,661

Schedule Of Allowance For Doubtful Accounts Receivable [Table Text Block]

Movement of allowance for doubtful accounts is as follows:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Beginning balance	$	1,367	$	2,023
Charge to expense		-		433
Less: recovery		(249)		(1,109)
Exchange rate effect		34		20
Ending balance	$	1,152	$	1,367

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Capital lease obligation (Tables)

9 Months Ended

Sep. 30, 2013

Leases, Capital [Abstract]

Schedule of Future Minimum Lease Payments for Capital Leases [Table Text Block]

Presented below is a schedule of estimated minimum lease payments on the capital lease obligation as well as payments for the profit sharing liability for the next five years as of September 30, 2013:

	Capital Lease Obligation		Capital Lease Obligation
Year ending September 30,	Minimum Lease Payments		Profit (Loss) Sharing		Total
	(in thousands)		(in thousands)		(in thousands)
2014	$	-	$	-	$	-
2015		126,557		-		126,557
2016		28,654		-		28,654
2017		28,654		-		28,654
2018		28,654		-		28,654
Thereafter		360,567		650,586		1,011,153
Total minimum lease payments		573,086		650,586		1,223,672
Less: amounts representing interest		(218,510)		(409,496)		(628,006)
Ending balance	$	354,576	$	241,090	$	595,666

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Summary of significant accounting policies (Details 2) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Current liabilities:
Short term notes payable	$ 987,988	$ 983,813
Accounts payable	495,488	352,052
Accounts payable - related parties	172,259	177,432
Short term loans - bank	254,929	147,124
Short term loans - others	130,170	147,323
Short term loans - related parties	48,889	79,557
Current maturities of long-term loans - related party	47,896	54,885
Other payables and accrued liabilities	52,272	54,589
Other payables - related parties	106,153	73,025
Customer deposits	95,695	125,890
Customer deposits - related parties	14,512	21,998
Deposit due to sales representatives	28,184	33,870
Taxes payable	9,716	16,674
Deferred lease income	2,178	2,120
TOTAL CURRENT LIABILITIES	2,448,138	2,271,590
Non-current liabilities:
Long term loans - related parties	24,450	38,088
Long-term other payable - related party	0	43,008
Deferred lease income - noncurrent	75,480	75,079
Capital lease obligations	354,576	330,099
Profit sharing liability	241,090	328,827
Other noncurrent liabilities	1,402	0
TOTAL NON-CURRENT LIABILITIES	696,998	815,101
TOTAL LIABILITIES	3,145,136	3,086,691
Variable Interest Entities and Subsidiary [Member]
Current liabilities:
Short term notes payable	950,498	971,117
Accounts payable	466,631	324,563
Accounts payable - related parties	171,759	177,160
Short term loans - bank	215,955	114,935
Short term loans - others	123,974	141,290
Short term loans - related parties	42,613	35,839
Current maturities of long-term loans - related party	56,372	54,885
Other payables and accrued liabilities	43,978	29,769
Other payables - related parties	96,901	64,941
Customer deposits	94,767	109,120
Customer deposits - related parties	14,512	21,998
Deposit due to sales representatives	28,184	33,870
Deposit due to sales representatives - related parties	1,809	1,238
Taxes payable	8,258	15,339
Deferred lease income	2,178	2,120
Intercompany payable to be eliminated	0	30,476
TOTAL CURRENT LIABILITIES	2,318,416	2,128,660
Non-current liabilities:
Long term loans - related parties	15,974	38,088
Long-term other payable - related party	0	43,008
Deferred lease income - noncurrent	75,480	75,079
Capital lease obligations	354,576	330,099
Profit sharing liability	241,090	328,827
Other noncurrent liabilities	1,402	0
TOTAL NON-CURRENT LIABILITIES	688,522	815,101
TOTAL LIABILITIES	$ 3,006,938	$ 2,943,761

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Summary of significant accounting policies (Policies)

9 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

(a) Basis of presentation

The unaudited condensed consolidated financial statements of the Company reflect the activities of the following major directly owned subsidiaries: 

		Percentage
Subsidiary		of Ownership
General Steel Investment Co., Ltd.	British Virgin Islands		100.00	%
General Steel (China) Co., Ltd. (“General Steel (China)”)	PRC		100.00	%
Baotou Steel – General Steel Special Steel Pipe Joint Venture Co., Ltd.	PRC		80.00	%
Yangpu Shengtong Investment Co., Ltd.	PRC		99.10	%
Tianjin Qiu Steel Investment Co., Ltd. (“Qiu Steel”)	PRC		98.70	%
Longmen Joint Venture	PRC		VIE/60.0	%
Maoming Hengda Steel Company, Ltd. (“Maoming Hengda”)	PRC		99.00	%
Tianwu General Steel Material Trading Co., Ltd (“Tianwu Joint Venture”)	PRC		60.00	%

Consolidation, Policy [Policy Text Block]

(b) Principles of consolidation – subsidiaries

The accompanying unaudited condensed consolidated financial statements include the financial statements of the Company, its subsidiaries, its variable interest entity (“VIE”) for which the Company is the ultimate primary beneficiary, and the VIE’s subsidiaries.

Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors.  

A VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, bears the risks of, and enjoys the rewards normally associated with, ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity. 

All significant inter-company transactions and balances have been eliminated upon consolidation.

Consolidation, Variable Interest Entity, Policy [Policy Text Block]

(c) Consolidation of VIE

Prior to entering into the Unified Management Agreement on April 29, 2011, Longmen Joint Venture had been consolidated as the Company’s 60% direct owned subsidiary. Upon entering into the Unified Management Agreement on April 29, 2011, Longmen Joint Venture was re-evaluated by the Company to determine if Longmen Joint Venture is a VIE and if the Company is the primary beneficiary.

Based on projected profits in this entity and future operating plans, Longmen Joint Venture ’s equity at risk is considered insufficient to finance its activities and therefore Longmen Joint Venture is considered to be a VIE.

The Company would be considered the primary beneficiary of the VIE if it has both of the following characteristics:

a.	The power to direct the activities of the VIE that most significantly impact the VIE’s economic performance; and
b.	The obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

A Supervisory Committee was formed during the negotiation of the Unified Management Agreement. Given there is both a Supervisory Committee and a Board with respect to Longmen Joint Venture , the powers (rights and roles) of both bodies were considered to determine which party has the power to direct the activities of Longmen Joint Venture , and by extension, whether the Company continues to have the power to direct Longmen Joint Venture ’s activities after this Supervisory Committee was formed and the significant investment in plant and equipment by owners of the Longmen Joint Venture partner, as discussed in Note 1- “Background”. The Supervisory Committee, which the Company holds 2 out of 4 seats, requires a ¾ majority vote, while the Board, which the Company holds 4 out of 7 seats, requires a simple majority vote. As the Supervisory Committee’s role is limited to supervising and monitoring management of Longmen Joint Venture and in the event there is any disagreement between the Board and the Supervisory Committee, the Board prevails, the Supervisory Committee is considered subordinate to the Board. Thus, the Board of Directors of Longmen Joint Venture continues to be the controlling decision-making body with respect to Longmen Joint Venture. The Company, which controls 60% of the voting rights of the Board of Directors, has control over the operations of Longmen Joint Venture and as such, has the power to direct the activities of the VIE that most significantly impact Longmen Joint Venture ’s economic performance.

In connection with the Unified Management Agreement, the Company, Shaanxi Coal and Shaanxi Steel may provide such support on a discretionary basis or as needed in the future. See Note 2 item (d) Liquidity.

The Company has the obligation to absorb losses and the rights to receive benefits based on the profit allocation as stipulated by the Unified Management Agreement that are significant to the VIE. As both conditions are met, the Company is the primary beneficiary of Longmen Joint Venture and therefore, continues to consolidate Longmen Joint Venture as a VIE.

The Company believes that the Unified Management Agreement between Longmen Joint Venture and Shaanxi Coal is in compliance with PRC law and is legally enforceable. The Board of Directors of Longmen Joint Venture continues to be the controlling decision-making body with respect to Longmen Joint Venture. The Company, which controls 60% of the voting rights of the Board of Directors, has control over the operations of Longmen Joint Venture and as such, has the power to direct the activities of the VIE. However, PRC law and/or uncertainties in the PRC legal system could limit the Company’s ability to enforce the Unified Management Agreement, which in turn, may lead to reconsideration of the VIE assessment and the potential for a different conclusion. The Company makes ongoing assessment to determine whether Longmen Joint Venture is a VIE.

The carrying amount of the VIE and its subsidiaries’ consolidated assets and liabilities are as follows:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Current assets	$	1,253,672	$	1,285,967
Plant and equipment, net		1,239,805		1,154,811
Other noncurrent assets		44,475		72,428
Total assets		2,537,952		2,513,206
Total liabilities		(3,006,938)		(2,943,761)
Net liabilities	$	(468,986)	$	(430,555)

VIE and its subsidiaries’ liabilities consist of the following:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Current liabilities:
Short term notes payable	$	950,498	$	971,117
Accounts payable		466,631		324,563
Accounts payable - related parties		171,759		177,160
Short term loans - bank		215,955		114,935
Short term loans - others		123,974		141,290
Short term loans - related parties		42,613		35,839
Current maturities of long-term loans – related party		56,372		54,885
Other payables and accrued liabilities		43,978		29,769
Other payables - related parties		96,901		64,941
Customer deposits		94,767		109,120
Customer deposits - related parties		14,512		21,998
Deposit due to sales representatives		28,184		33,870
Deposit due to sales representatives – related parties		1,809		1,238
Taxes payable		8,258		15,339
Deferred lease income		2,178		2,120
Intercompany payable to be eliminated		-		30,476
Total current liabilities		2,318,416		2,128,660
Non-current liabilities:
Long term loans - related parties		15,974		38,088
Long-term other payable – related party		-		43,008
Deferred lease income - noncurrent		75,480		75,079
Capital lease obligations		354,576		330,099
Profit sharing liability		241,090		328,827
Other noncurrent liabilities		1,402		-
Total non-current liabilities		688,522		815,101
Total liabilities of consolidated VIE	$	3,006,938	$	2,943,761

VIE and its subsidiaries’ statements of operations are as follows:

	Three months ended		Three months ended
	September 30, 2013		September 30, 2012
	(in thousands)		(in thousands)
Sales	$	606,444	$	708,974
Gross profit (loss)	$	8,122	$	(18,417)
Income (loss) from operations	$	32,967	$	(37,000)
Net income (loss) attributable to controlling interest	$	8,284	$	(39,494)

	Nine months ended		Nine months ended
	September 30, 2013		September 30, 2012
	(in thousands)		(in thousands)
Sales	$	1,903,933	$	2,126,556
Gross profit (loss)	$	(23,704)	$	12,628
Income (loss) from operations	$	32,998	$	(40,071)
Net loss attributable to controlling interest	$	(18,335)	$	(92,974)

Longmen Joint Venture has two 100% owned subsidiaries, Yuxin Trading Co., Ltd. (“Yuxin”) and Yuteng Trading Co., Ltd. (“Yuteng”). Prior to March 1, 2012, Longmen Joint Venture had three consolidated subsidiaries, Hualong Fire Retardant Material Co., Ltd. (“Hualong”), Hancheng Tongxing Metallurgy Co., Ltd. (“Tongxing”) and Beijing Huatianyulong International Steel Trading Co., Ltd. (“Huatianyulong”), in which Longmen Joint Venture did not hold a controlling interest.  On March 1, 2012, Longmen Joint Venture sold its equity interest in Tongxing, and, as of March 31, 2012, Longmen Joint Venture has two consolidated subsidiaries, Hualong and Huatianyulong, in which it does not hold a controlling interest. Hualong and Huatianyulong are separate legal entities which were established in the PRC as limited liability companies and subsequently acquired by Longmen Joint Venture in June 2007 and July 2008, respectively. Prior to and subsequent to their acquisition by Longmen Joint Venture, these two entities have been operating as self-sustaining integrated sets of activities and assets conducted and managed for the purpose of providing a return to shareholders consisting of all the inputs, processes and outputs of a business. However, these two entities do not meet the definition of variable interest entities. Further consideration was given to whether consolidation was appropriate under the voting interest model, specifically where the power of control may exist with a lesser percentage of ownership (i.e. less than 50%), for example, by contract, lease, agreement with other stockholders or by court decree.

Hualong

Longmen Joint Venture, the single largest shareholder, holds a 36.0% equity interest in Hualong. The other two shareholders, who own 34.67% and 29.33% respectively, assigned their voting rights to Longmen Joint Venture in writing at the time of the acquisition of Hualong. The voting rights have been assigned through the date Hualong ceases its business operations or the other two shareholders sell their interest in Hualong. Hualong’s main business is to supply refractory.

Tongxing

Prior to March 1, 2012, Longmen Joint Venture held a 22.76% equity interest in Tongxing while hundreds of employees of Longmen Joint Venture owned the remaining 77.24%. Each individual employee shareholder comprising the remaining 77.24% assigned its voting rights to Longmen Joint Venture in writing at the time of the acquisition of Tongxing.  The voting rights assigned were effective until Tongxing ceased its business operations or Longmen Joint Venture liquidated its equity interest of Tongxing, whichever came first.

On March 1, 2012, Longmen Joint Venture sold its 22.76% equity interest of Tongxing to two individuals, who are the representatives from Long Steel Group.  As of March 1, 2012, Tongxing had a carrying value of net assets of $40.5 million which were included in the consolidated net assets of the Company and a noncontrolling interest in Tongxing of $32.5 million.  The Company retained the land use right associated with the Tongxing property adjacent to the Longmen Joint Venture facility, which had a carrying value of $3.6 million immediately prior to the transaction and relinquished its controlling interest in the remaining net assets (primarily operating assets). In connection with the transaction, the Company also settled with a payable in cash of $0.3 million and transferred the dividend receivable of $0.9 million from Tongxing to the two individuals.  These arrangements meet the criteria of ASC 810-10-40-6b and 6d, deconsolidation of a Subsidiary with multiple arrangements treated as a single transaction. As the land use rights held in Tongxing have been included as part of the Company’s consolidated assets, this transaction was considered as a change in the Company’s ownership interest in the land use right similar to a change in a parent company’s ownership interest in a subsidiary in accordance with ASC 810-10-45-23 and therefore the carrying value of the land use right was not stepped up to fair value.  The net impact of these transactions resulted in a reduction of $3.1 million paid-in capital on March 1, 2012. 

Huatianyulong

Longmen Joint Venture holds a 50.0% equity interest in Huatianyulong and the other unrelated shareholder holds the remaining 50.0%. The other shareholder assigned its voting rights to Longmen Joint Venture in writing at the time of acquisition of Huatianyulong. The voting rights have been assigned through the date Huatianyulong ceases its business operation or the other unrelated shareholder sells its interest in Huatianyulong. Huatianyulong mainly sells imported iron ore.

The Company has determined that it is appropriate for Longmen Joint Venture to consolidate Hualong and Huatianyulong with appropriate recognition in the Company’s financial statements of the non-controlling interests in each entity, beginning on the acquisition dates as these were also the effective dates of the agreements with other stockholders granting a majority voting rights in each entity, and thereby, the power of control, to Longmen Joint Venture. The Company also has determined that it is appropriate for Longmen Joint Venture to consolidate Tongxing’s net income from the beginning of the acquisition date to March 1, 2012, the date on which Longmen Joint Venture relinquished its equity interest and majority voting rights in Tongxing, and thereby its power of control of Tongxing.

Liquidity Disclosure [Policy Text Block]

(d) Liquidity

The Company’s accounts have been prepared in accordance with U.S. GAAP on a going concern basis. The going concern basis assumes that assets are realized and liabilities are extinguished in the ordinary course of business at amounts disclosed in the financial statements. The Company’s ability to continue as a going concern depends upon aligning its sources of funding (debt and equity) with the expenditure requirements of the Company and repayment of the short-term debt facilities as and when they fall due.

The steel business is capital intensive and as a normal industry practice in PRC, the Company is highly leveraged. Debt financing in the form of short term bank loans, loans from related parties, financing sales, bank acceptance notes, and capital leases have been utilized to finance the working capital requirements and the capital expenditures of the Company. As a result, the Company’s debt to equity ratio as of September 30, 2013 and December 31, 2012 were (6.6) and (7.1), respectively. As of September 30, 2013, the Company’s current liabilities exceed current assets (excluding non-cash item) by $1.1 billion.

Longmen Joint Venture, as the most important entity of the Company, accounted for majority of total sales of the Company. As such, the majority of the Company’s working capital needs come from Longmen Joint Venture. The Company’s ability to continue as a going concern depends heavily on Longmen Joint Venture’s operations. Longmen Joint Venture has obtained different types of financial supports, which are listed below by category:

Line of credit

The Company received lines of credit from the listed major banks totaling $110.8 million with expiration dates ranging from September 27, 2014 to October 26, 2014.

	Amount of
	Line of Credit
Banks	(in millions)		Repayment Date
Bank of China		6.5	August 25, 2014 to October 26, 2014
China Everbright Bank		48.9	October 8, 2014
Bank of Xi’an		32.6	October 9, 2014
Bank of Jinzhou		22.8	September 27, 2014*
Total	$	110.8

* Management expects the line of credit will be extended after September 27, 2014.

As of the date of this report, the Company utilized $61.9 million of these lines of credit.

Vendor financing

Longmen Joint Venture signed additional vendor financing agreements, which will provide liquidity to the Company in a total amount of $815.0 million with the following companies:

		Financing Amount
Company	Financing period covered	(in millions)
Company A – related party	January 6, 2013 – January 5, 2015	$	163.0
Company B – third party	January 6, 2013 – November 7, 2015		163.0
Company C – third party	October 1, 2013 – March 31, 2015		489.0
Total		$	815.0

Company A, a related party company and Company B, a third party company, are both Longmen Joint Venture’s major coke suppliers. They have been doing business with Longmen Joint Venture for years. Each company has signed a two-year agreement with Longmen Joint Venture which was effective on January 6, 2013 to finance Longmen Joint Venture for its coke purchase for a two-year period. Company B signed an additional two-year agreement with Longmen Joint Venture effective on November 7, 2013. According to the above signed agreement, both Company A and B will not demand any cash payments for next two years. As of the date of this report, our payables to Company A and Company B were approximately$64.3 million and $51.9 million, respectively.

As a critical business stakeholder to the Company’s Tianwu Joint Venture, Company C is a Fortune 500 Company. In October 2012, Company C signed a one year agreement with Longmen Joint Venture to finance Longmen Joint Venture’s purchase of iron ore for an amount up to $158.3 million to commence on October 1, 2012. In June 2013, Company C signed another one year agreement with Longmen Joint Venture to finance Longmen Joint Venture’s purchase of iron ore for an amount up to $318.4 million to commence on October 1, 2013. According to the agreement, Company C agrees to provide an amount not less than $318.4 million in iron ore to Longmen Joint Venture. Subject to the terms of the agreement, Longmen Joint Venture is subject to a penalty of 0.05% of the daily outstanding balance owed to Company C in an event of late payment. The agreement also helps secure Company C’s iron ore sales to Longmen Joint Venture. On June 28, 2013, Company C agreed to increase the finance amount limit to $489.0 million and extended the financing period to March 31, 2015. As of the date of this report, our payable to Company C is approximately$1.2 million.

Financing sales

As part of our working capital management, Longmen Joint Venture has entered into an additional financing sales agreement with a third party company, Company D and two 100% owned subsidiaries of Longmen Joint Venture, named Yuxin Trading Co., Ltd. (“Yuxin”) and Yuteng Trading Co., Ltd. (“Yuteng”) (“financing sales”) to provide liquidity to the Company in the total amount of $81.5 million. See Note 9 for financing sales details.

Based on the contract terms, from December 31, 2012 until the earlier of the expiration date of the contract or December 31, 2013, the advance payment balance from Company D cannot be less than $81.5 million. The contract has been extended to December 31, 2014. The remaining financing sales balance can be paid by installment based on Longmen Joint Venture’s goods delivery volume. As of the date of this report, our payable to Company D is approximately $24.5 million.

Other financing

On January 7, 2013, November 6, 2013, November 7, 2013, Longmen Joint Venture signed a payment extension agreement with each company listed below. In total, Longmen Joint Venture can get $77.4 million in financial support from a two-year balancing payment extension granted by the following five companies:

			Financing Amount
Company	Financing period covered		(in millions)
Company E – related party	January 7, 2013 – January 6, 2015	$	16.3
Company F – related party	January 7, 2013 – January 6, 2015		21.2
Company G – related party	January 7, 2013 – January 6, 2015		7.3
Company H – related party	November 7, 2013 – November 7, 2015		16.3
Company I – related party	November 6, 2013 – November 6, 2015		16.3
Total		$	77.4

According to the contract terms, Company E, Company F, Company G, Company H and Company I have agreed to grant a two year payment extension in the amounts of $16.3 million, $21.2 million, $7.3 million, $16.3 million and $16.3 million respectively. As of the date of this report, our payables to Company E, Company F, Company G, Company H and Company I are approximately $17.9  million, $14.0 million, $18.9million, $7.5 million and $0, respectively.

Amount due to sales representatives

Longmen Joint Venture entered into agreements with various entities to act as the Company’s exclusive sales agents in specified geographic areas.  These exclusive sales agents must meet certain criteria and are required to deposit a certain amount of money with the Company. In return, the sales agents receive exclusive sales rights in a specified area and discounted prices on products they order. These deposits bear no interest and are required to be returned to the sales agent once the agreement is terminated. As of September 30, 2013, Longmen Joint Venture has collected a total amount of $30.0 million. Historically, this amount is quite stable and we do not expect a big fluctuation in this amount for the next twelve months from September 30, 2013 onwards.

With the financial support from the banks and the companies above, management is of the opinion that the Company has sufficient funds to meet its future operations, working capital requirements and debt obligations until the end of September 30, 2014.The detailed breakdown of Longmen Joint Venture’s estimated cash flows items are listed below.

	Cash inflow (outflow)
	(in millions)
	For the twelve months ended
	September 30, 2014
Current liabilities over current assets (excluding non-cash items) as of September 30, 2013 (unaudited)	$	(1,072.0)
Projected cash financing and outflows:
Cash provided by line of credit from banks		110.8
Cash provided by vendor financing		815.0
Cash provided by financing sales		81.5
Cash provided by other financing		77.4
Cash provided by sales representatives		30.0
Cash projected to be used in operations in the twelve months ended September 30, 2014		(28.6)
Net projected change in cash for the twelve months ended September 30, 2014	$	14.1

As a result, the unaudited condensed consolidated financial statements for the period ended September 30, 2013 have been prepared on a going concern basis.

Use of Estimates, Policy [Policy Text Block]

(e) Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the accompanying unaudited condensed consolidated financial statements and footnotes. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include the fair value of the profit sharing liability, the useful lives of and impairment for property, plant and equipment, and potential losses on uncollectible receivables, allowance for inventory valuation, the interest rate used in the financing sales, the fair value of the assets recorded under capital lease and the present value of the net minimum lease payments of the capital lease. Actual results could differ from these estimates.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

(f) Concentration of risks and uncertainties

The Company’s operations are carried out in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC’s economy. The Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America and Western Europe. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.

The Company has significant exposure to the fluctuation of raw materials and energy prices as part of its normal operations. As of September 30, 2013 and December 31, 2012, the Company does not have any open commodity contracts to mitigate such risks.

Cash includes demand deposits in accounts maintained with banks within the PRC, Hong Kong and the United States. Total cash (including restricted cash balances) in these banks on September 30, 2013 and December 31, 2012 amounted to $467.9 million and $369.9 million, including $3.1 million and $2.3 million that were deposited in Shaanxi Coal and Chemical Industry Group Financial Co., Ltd., a related party, respectively. As of September 30, 2013, $0.2 million cash in the bank was covered by insurance. The Company has not experienced any losses in other bank accounts and believes it is not exposed to any risks on its cash in bank accounts.

The Company’s five major customers are all distributors and collectively represented approximately 25.5% and 23.4% of the Company’s total sales for the three and nine months ended September 30, 2013, respectively. The Company had five major customers, which represented approximately 27.2% and 34.1% of the Company’s total sales for the three months and nine months ended September 30, 2012, respectively. None of the five major customers accounted for more than 10% of total sales for the three and nine months ended September 30, 2013 and 2012, respectively. These five major customers accounted for 15.9% and 47.8% of total accounts receivable, including related parties, as of September 30, 2013 and December 31, 2012, respectively. One of the five major customers accounted for more than 10% of total accounts receivable, which amounted to $1.4 million and $10.4 million as of September 30, 2013 and December 31, 2012, respectively.

For the three and nine months ended September 30, 2013, the Company purchased approximately 15.3% and 29.3% of its raw materials from five major suppliers, respectively. None of the five major suppliers individually accounted for more than 10% of the total purchases for the three and nine months ended September 30, 2013. The purchases from the five major suppliers represent approximately 25.4% and 39.6% of the Company’s total purchases for the three months and nine months ended September 30, 2012, respectively.  Two of the five major suppliers individually accounted for more than 10% of the total purchases for the nine months ended September 30, 2012. These five vendors accounted for 28.9% and 33.8% of total accounts payable, including related parties, as of September 30, 2013 and December 31, 2012, respectively. None of the five major suppliers individually accounted for more than 10% of total accounts payable as September 30, 2013 and one of the five major suppliers individually accounted for more than 10% of total accounts payable as December 31, 2012.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

(g) Foreign currency translation and other comprehensive income

The reporting currency of the Company is the U.S. dollar. The Company’s subsidiaries in China use the local currency, Renminbi (RMB), as their functional currency. Assets and liabilities are translated at the unified exchange rate as quoted by the People’s Bank of China at the end of the period. The statement of operations accounts are translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statement of equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

Translation adjustments included in accumulated other comprehensive income amounted to $2.5 million and $10.2 million as of September 30, 2013 and December 31, 2012, respectively. The balance sheet amounts, with the exception of equity at September 30, 2013 and December 31, 2012 were translated at 6.13 RMB and 6.30 RMB to $1.00, respectively. The equity accounts were stated at their historical rate. The average translation rates applied to statement of operations accounts for the three months ended September 30, 2013 and 2012 were 6.16 RMB and 6.33 RMB, respectively. The average translation rates applied to statement of operations accounts for the nine months ended September 30, 2013 and 2012 were 6.21 RMB and 6.31 RMB, respectively. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheet.

The PRC government imposes significant exchange restrictions on fund transfers out of the PRC that are not related to business operations. These restrictions have not had a material impact on the Company because it has not engaged in any significant transactions that are subject to the restrictions.

Fair Value of Financial Instruments, Policy [Policy Text Block]

(h) Financial instruments

The accounting standards regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The Company considers the carrying amount of cash, short term investment, accounts receivable, other receivables, accounts payable and accrued liabilities, to approximate their fair values because of the short period of time between the origination of such instruments and their expected realization. For short term loans and notes payable, the Company concluded the carrying values are a reasonable estimate of fair values because of the short period of time between the origination and repayment and as their stated interest rates approximate current rates available.

The Company analyzes all financial instruments with features of both liabilities and equity, pursuant to which the Company’s warrants were required to be recorded as a liability at fair value and marked to market each reporting period.

The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follow:

· Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

· Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

· Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

On December 13, 2007, the Company entered into a Securities Purchase Agreement (the “Agreement”) with certain institutional investors issuing $40.0 million (“Notes”) and 1,154,958 warrants. The warrants can be exercised for common stock through May 13, 2013 at $13.51 per share, subject to customary anti-dilution adjustments.  On December 24, 2009, the holders of the existing warrants of 1,154,958 shares entered into an agreement with the Company that reset the exercise price from $13.51 to $5 per share and increased the number of warrants from 1,154,958 to 3,900,871, which expired on May 13, 2013.

In December 2009, the Company issued an additional 2,777,778 warrants in connection with a registered direct offering, which expired as of June 24, 2012.

The aforementioned warrants meet the definition of a derivative instrument in the accounting standards. Therefore these instruments were accounted for as derivative liabilities and recorded at their fair value as of each reporting period. The change in the value of the derivative liabilities is charged against or credited to income.  The fair value was determined using the Cox Rubenstein Binomial Model, defined in the accounting standard as Level 2 inputs, and recorded the change in earnings. See Note 12– “Convertible notes and derivative liabilities” for the variables used in the Cox Rubenstein Binomial model.

The Company determined the carrying value of the profit sharing liability using Level 3 inputs by considering the present value of Longmen Joint Venture’s projected profits/losses with a discount rate of 7.3% based on the Company’s average borrowing rate. The projected profits/losses in Longmen Joint Venture were based upon, but not limited to, the following assumptions until April 30, 2031:

· projected selling units and growth in the steel market

· projected unit selling price in the steel market

· projected unit purchase cost in the coal and iron ore markets

· selling and general and administrative expenses to be in line with the growth in the steel market

· projected bank borrowings

The above assumptions were reviewed by the Company at September 30, 2013 and the Company changed those assumptions as compared to the assumption used at December 31, 2012 because of the changes in market conditions in PRC.  Since the Company had the most updated information from the banks, GDP report and the operating results from the three and nine months ended September 30, 2013, all of the above information indicated the downward trend in the steel manufacturing industry in the coming years. As a result, the Company re-measured the fair value of the 40% profit sharing liability as of the period ended September 30, 2013 and recorded a gain on change in fair value of profit sharing liability of $41.8 million and $107.9 million for the three and nine months ended September 30, 2013, respectively.

If there will be any slight changes in any of the assumptions that we used, the fair value of the profit sharing liability will be changed accordingly.  If we would reduce the projected bank borrowings rate by 1.0% and other factors remained unchanged, our profit sharing liability as of the beginning of the period ended September 30, 2013 would have been $254.9 million and we would reduce the gain from the change in the fair value of profit sharing liabilities by $32.9 million.If we would reduce the projected selling units and growth in the steel market rate by 1.0% and other factors remained unchanged, our profit sharing liability as of the beginning of the period ended September 30, 2013 would have been $214.3 million and we would increase the gain from the change in the fair value of profit sharing liabilities by $8.3 million.

The following table sets forth by level within the fair value hierarchy, the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2013:

	Carrying Value as		Fair Value Measurements at September 30,
	of September 30,		2013
(in thousands)	2013		Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Profit sharing liability	$	241,090	$	-	$	-	$	241,090
Total	$	241,090	$	-	$	-	$	241,090

The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2012:

	Carrying Value as		Fair Value Measurements at December 31,
	of December 31,		2012
(in thousands)	2012		Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Derivative liabilities	$	1	$	-	$	1	$	-
Profit sharing liability		328,827		-		-		328,827
Total	$	328,828	$	-	$	1	$	328,827

The following is a reconciliation of the beginning and ending balance of the assets and liabilities measured at fair value on a recurring basis for the nine month ended September 30, 2013 and for the year ended December 31, 2012:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Beginning balance	$	328,828	$	303,243
Change in fair value of profit sharing liability		(107,877)		-
Current period interest expense accreted		12,440		22,499
Change of derivative liabilities charged to earnings		1		9
Exchange rate effect		7,698		3,077
Ending balance	$	241,090	$	328,828

Except for the derivative liabilities and profit sharing liability, the Company did not identify any other assets or liabilities that are required to be presented on the balance sheet at fair value in accordance with the accounting standard. The carrying value of the long term loans-related party approximates to its fair value as of the reporting date.

Notes Receivable [Policy Text Block]

(i) Notes receivable

Notes receivable represents trade accounts receivable due from various customers where the customers’ banks have guaranteed the payment. The notes are non-interest bearing and normally paid within three to six months. The Company has the ability to submit request for payment to the customer’s bank earlier than the scheduled payment date, but will incur an interest charge and a processing fee.

Restricted notes receivable represents notes receivable pledged as collateral for short-term loans and short-term notes payable issued by banks.

Interest expenses for early submission request of payment for the three months ended September 30, 2013 and 2012 amounted to $9.6 million and $16.3 million, respectively, and amounted to $26.9 million and $65.6 million, respectively, for the nine months ended September 30, 2013 and 2012.

Property, Plant and Equipment, Policy [Policy Text Block]

(j) Plant and equipment, net

Plant and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets with a 3%-5% residual value. The depreciation expense on assets acquired under capital leases is included with depreciation expense on owned assets. The estimated useful lives are as follows:

Buildings and Improvements	10-40 Years
Machinery	10-30 Years
Machinery and equipment under capital lease	20 Years
Other equipment	5 Years
Transportation Equipment	5 Years

The Company assesses all significant leases for purposes of classification as either operating or capital. At lease inception, if the lease meets any of the four following criteria, the Company will classify it as a capital lease; otherwise it will be treated as an operating lease: a) transfer of ownership to lessee at the end of the lease term, b) bargain purchase option, c) lease term is equal to 75% or more of the estimated economic life of the leased property, d) the present value of the minimum lease payments is 90% or more of the fair value of the leased asset.

Construction in progress represents the costs incurred in connection with the construction of buildings or new additions to the Company’s plant facilities. No depreciation is provided for construction in progress until such time as the assets are completed and are placed into service, maintenance, repairs and minor renewals are charged directly to expense as incurred. Major additions and betterment to buildings and equipment are capitalized. Interest incurred during construction is capitalized into construction in progress. All other interest is expensed as incurred.

Long lived assets, including buildings and improvements, equipment and intangible assets are reviewed if events and changes in circumstances indicate that its carrying amount may not be recoverable, to determine whether their carrying value has become impaired. The Company considers assets to be impaired if the carrying value exceeds the future projected cash flows from related operations. The Company also re-evaluates the periods of depreciation and amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives.

Goodwill and Intangible Assets, Policy [Policy Text Block]

(j) Intangible assets

Finite lived intangible assets of the Company are reviewed for impairment if events and circumstances require. The Company considers assets to be impaired if the carrying value exceeds the future projected cash flows from related operations. The Company also re-evaluates the periods of amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives.  As of September 30, 2013, the Company expects these assets to be fully recoverable.

Land use rights

All land in the PRC is owned by the government. However, the government grants “land use rights.”  General Steel (China) acquired land use rights in 2001 for a total of $3.9 million (RMB 23.7 million). These land use rights are for 50 years and expire in 2050 and 2053. The Company amortizes the land use rights over the twenty-year business term because its business license had a twenty-year term.

Long Steel Group contributed land use rights for a total amount of $24.2 million (RMB 148.6 million) to the Longmen Joint Venture. The contributed land use rights are for 50 years and expire in 2048 to 2052.

Maoming Hengda has land use rights amounting to $2.7 million (RMB 16.6 million) for 50 years that expire in 2054.

Other than the land use rights that General Steel (China) acquired in 2001, the Company amortizes the land use rights over their 50 year term.

Entity	Original Cost		Expires on
	(in thousands)
General Steel (China)	$	3,867		2050 & 2053
Longmen Joint Venture	$	24,226		2048 & 2052
Maoming Hengda	$	2,705		2054

Mining right

Mining rights are capitalized at cost when acquired, including amounts associated with any value beyond proven and probable reserves, and amortized to operations as depletion expense using the units-of-production method over the estimated proven and probable recoverable tons. Longmen Joint Venture has iron ore mining right amounting to $2.4 million (RMB 15.0 million), which is amortized over the estimated recoverable reserve of 4.2 million tons.

Investment, Policy [Policy Text Block]

(k) Investments in unconsolidated entities

Entities in which the Company has the ability to exercise significant influence, but does not have a controlling interest, are accounted for using the equity method. Significant influence is generally considered to exist when the Company has an ownership interest in the voting stock between 20% and 50%, and other factors, such as representation on the Board of Directors, voting rights and the impact of commercial arrangements, are considered in determining whether the equity method of accounting is appropriate. The Company accounts for investments with ownership less than 20% using the cost method.

The table below summarizes Longmen Joint Venture’s investment holdings as of September 30, 2013 and December 31, 2012.

			September 30,				December 31,
			2013				2012
	Year		Net investment		Owned		Net investment		Owned
Unconsolidated entities	acquired		(In thousands)		%		(In thousands)		%
Xian Delong Powder Engineering Materials Co., Ltd.		2007	$	1,161		24.1	$	1,166		24.1

Total investment income in unconsolidated subsidiaries amounted to $0.05 million and $0.04 million for the three months ended September 30, 2013 and 2012, respectively, and $0.1 million and $0.1 million for the nine months ended September 30, 2013 and 2012, respectively, which was included in “Loss from equity investments” in the unaudited condensed consolidated statements of operations and comprehensive income (loss).

Reclassification, Policy [Policy Text Block]

(l) Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications have no effect on the accompanying consolidated statements of operations and cash flows.

XML

Related party transactions and balances (Details 13) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Dec. 31, 2012
Long-term loans - related party	$ 24,450	$ 24,450	$ 38,088
Shaanxi Steel [Member]
Related Party Relationship	Majority shareholder of Long Steel Group	Majority shareholder of Long Steel Group
Long-term loans - related party	$ 24,450	$ 24,450	$ 38,088

XML

Accounts receivable (including related parties), net (Details 1) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Beginning balance	$ 1,367	$ 2,023
Charge to expense	0	433
Less: recovery	(249)	(1,109)
Exchange rate effect	34	20
Ending balance	$ 1,152	$ 1,367

XML

Related party transactions and balances (Details 11) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Dec. 31, 2012
Customer deposits - related parties	$ 14,512	$ 14,512	$ 21,998
Shaanxi Yuchang Trading Co Ltd [Member]
Related Party Relationship	Significant influence by Long Steel Group	Significant influence by Long Steel Group
Customer deposits - related parties	10	10	4,869
Sichuan Yutai Trading Co Ltd [Member]
Related Party Relationship	Significant influence by Long Steel Group**	Significant influence by Long Steel Group
Customer deposits - related parties	0	0	2,163
Tianjin Hengying Trading Co Ltd [Member]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Customer deposits - related parties	0	0	90
Long Steel Group [Member]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture	Noncontrolling shareholder of Longmen Joint Venture
Customer deposits - related parties	13,600	13,600	8,864
Shaanxi Junlong Rolling Co Ltd [Member]
Related Party Relationship	Investee of Long Steel Group	Investee of Long Steel Group
Customer deposits - related parties	679	679	5,615
Shaanxi Shenganda Trading Co Ltd [Member]
Related Party Relationship	Significant influence by Long Steel Group	Significant influence by Long Steel Group
Customer deposits - related parties	0	0	353
Others [Member]
Related Party Relationship	Entities either owned or have significant influence by our affiliates or management	Entities either owned or have significant influence by our affiliates or management
Customer deposits - related parties	$ 223	$ 223	$ 44

XML

Intangible assets, net (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Finite-Lived Intangible Assets, Gross	$ 33,988	$ 33,062
Less: Accumulated amortization	(10,060)	(8,996)
Intangible assets, net	23,928	24,066
Land use rights [Member]
Finite-Lived Intangible Assets, Gross	30,798	29,986
Less: Accumulated amortization	(8,387)	(7,577)
Mining right [Member]
Finite-Lived Intangible Assets, Gross	2,448	2,384
Less: Accumulated amortization	(1,144)	(993)
Software [Member]
Finite-Lived Intangible Assets, Gross	742	692
Less: Accumulated amortization	$ (529)	$ (426)

XML

Accounts receivable (including related parties), net (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012	Dec. 31, 2011
Accounts receivable	$ 9,729	$ 8,062
Less: allowance for doubtful accounts	(1,152)	(1,367)	(2,023)
Accounts receivable - related parties	3,252	14,966
Net accounts receivable	$ 11,829	$ 21,661

XML

Related party transactions and balances (Tables)

9 Months Ended

Sep. 30, 2013

Schedule of Capital Leased Assets [Table Text Block]

The carrying value of assets acquired under the capital lease consists of the following:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Machinery	$	603,248	$	587,334
Less: accumulated depreciation		(69,248)		(46,497)
Carrying value of leased assets	$	534,000	$	540,837

Schedule Of Related Party Sales [Table Text Block]

The following chart summarized sales to related parties for the three and nine months ended September 30, 2013 and 2012.

		Three months ended		Three months ended
Name of related parties	Relationship	September 30, 2013		September 30, 2012
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	63,793	$	123,631
Sichuan Yutai Trading Co., Ltd	Significant influence by Long Steel Group**		-		16,998
Shaanxi Yuchang Trading Co., Ltd	Significant influence by Long Steel Group		1,081		-
Shaanxi Haiyan Trade Co., Ltd	Significant influence by Long Steel Group		85		12,480
Shaanxi Shenganda Trading Co., Ltd	Significant influence by Long Steel Group		19,866		7,599
Shaanxi Steel	Majority shareholder of Long Steel Group		979		25
Shaanxi Long Steel Group Baoji Steel Rolling Co., Ltd	Subsidiary of Long Steel Group		9		11,392
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		1,782		20,758
Shaanxi Coal and Chemical Industry Group Co., Ltd	Shareholder of Shaanxi Steel		7,951		-
Others	Entities either owned or have significant influence by our affiliates or management		-		-
Total		$	95,546	$	192,883

**Long Steel Group has the ability to significantly influence the operating and financial decisions of the entity through equity ownership either directly or through key employees, commercial contractual terms, or the ability to assign management personnel.

		Nine months ended		Nine months ended
Name of related parties	Relationship	September 30, 2013		September 30, 2012
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	226,754	$	360,820
Sichuan Yutai Trading Co., Ltd	Significant influence by Long Steel Group		72		147,847
Shaanxi Yuchang Trading Co., Ltd	Significant influence by Long Steel Group		21,491		41,433
Shaanxi Haiyan Trade Co., Ltd	Significant influence by Long Steel Group		15,681		43,015
Shaanxi Shenganda Trading Co., Ltd	Significant influence by Long Steel Group		56,545		34,132
Shaanxi Steel	Majority shareholder of Long Steel Group		2,390		634
Shaanxi Long Steel Group Baoji Steel Rolling Co., Ltd	Subsidiary of Long Steel Group		2,122		31,485
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		33,075		37,965
Shaanxi Coal and Chemical Industry Group Co., Ltd	Shareholder of Shaanxi Steel		22,577		-
Others	Entities either owned or have significant influence by our affiliates or management		-		1,493
Total		$	380,707	$	698,824

Schedule Of Related Party Purchases [Table Text Block]

The following charts summarize purchases from related parties for the three and nine months ended September 30, 2013 and 2012.

		Three months ended		Three months ended
Name of related parties	Relationship	September 30, 2013		September 30, 2012
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	101,606	$	123,637
Hancheng Haiyan Coking Co., Ltd	Noncontrolling shareholder of Long Steel Group		31,331		47,487
Xi’an Pinghe Metallurgical Raw Material Co., Ltd	Noncontrolling shareholder of Long Steel Group		1,181		16,674
Shaanxi Long Steel Group Baoji Steel Rolling Co., Ltd	Subsidiary of Long Steel Group		-		1,568
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		1		2,257
Shaanxi Huafu New Energy Co., Ltd	Significant influence by the Long Steel Group		10,529		10,322
Beijing Daishang Trading Co., Ltd.	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		1,726		1,049
Others	Entities either owned or have significant influence by our affiliates or management		64		91
Total		$	146,438	$	203,085

		Nine months ended		Nine months ended
Name of related parties	Relationship	September 30, 2013		September 30, 2012
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	376,104	$	453,947
Hancheng Haiyan Coking Co., Ltd	Noncontrolling shareholder of Long Steel Group		148,322		195,861
Xi’an Pinghe Metallurgical Raw Material Co., Ltd	Noncontrolling shareholder of Long Steel Group		13,678		83,251
Shaanxi Long Steel Group Baoji Steel Rolling Co., Ltd	Subsidiary of Long Steel Group		53		5,332
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		212		4,417
Shaanxi Huafu New Energy Co., Ltd	Significant influence by the Long Steel Group		28,618		24,347
Beijing Daishang Trading Co., Ltd.	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		6,635		3,653
Others	Entities either owned or have significant influence by our affiliates or management		300		305
Total		$	573,922	$	771,113

Schedule Of Related Party Transactions Loan Receivables From Related Party [Table Text Block]

Loans receivable – related parties:

Name of related parties	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	-	$	63,319
Teamlink Investment Co., Ltd	Partially owned by CEO* through indirect shareholding		4,540		6,000
Total		$	4,540	$	69,319

*The CEO is referred to herein as the chief executive officer of General Steel Holdings, Inc. 

Schedule Of Related Party Transactions, Accounts Receivables From Related Party [Table Text Block]

Accounts receivables – related parties:

Name of related parties	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	1,834	$	10,409
Shaanxi Long Steel Group Baoji Steel Rolling Co., Ltd	Subsidiary of Long Steel Group		-		2,017
Tianjin Daqiuzhuang Steel Plates	Partially owned by CEO through indirect shareholding		19		18
Shaanxi Steel	Majority shareholder of Long Steel Group		1,227		2,435
Others			172		87
Total		$	3,252	$	14,966

Schedule Of Related Party Transactions, Other Receivables Related Parties [Table Text Block]

Other receivables – related parties:

Other receivables - related parties are those nontrade receivables arising from transactions between the Company and its related parties, such as advances or payments made on behalf of these related parties.

Name of related parties	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	561	$	301
Shaanxi Steel	Majority shareholder of Long Steel Group		44,811		65,981
Tianjin General Quigang Pipe Co., Ltd	Partially owned by CEO through indirect shareholding		1,228		1,195
Tianjin Dazhan Industry Co, Ltd	Partially owned by CEO through indirect shareholding		489		476
Maoming Shengze Trading Co., Ltd.	Partially owned by CEO through indirect shareholding		3,834		-
Others	Entities either owned or have significant influence by our affiliates or management		578		429
Total		$	51,501	$	68,382

Schedule Of Related Party Transactions, Advances On Inventory Purchase From Related Parties [Table Text Block]

Advances on inventory purchase – related parties:

Name of related parties	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	1,377	$	1,367
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		6,254		-
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		12,805		-
Tianjin General Qiugang Pipe Co., Ltd	Partially owned by CEO through indirect shareholding		9,210		41,316
Maoming Shengze Trading Co., Ltd	Partially owned by CEO through indirect shareholding		-		3,733
Others	Entities either owned or have significant influence by our affiliates or management		21		-
Total		$	29,667	$	46,416

Schedule Of Related Party Transactions, Accounts Payable Related Parties [Table Text Block]

Accounts payable - related parties:

Name of related parties	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Hancheng Haiyan Coking Co., Ltd	Noncontrolling shareholder of Longmen Joint Venture	$	60,463	$	58,661
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		100,579		91,511
Shaanxi Coal and Chemical Industry Group Co., Ltd.	Shareholder of Shaanxi Steel		-		5,652
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		954		3
Xi’an Pinghe Metallurgical Raw Material Co., Ltd	Noncontrolling shareholder of Long Steel Group		7,838		5,278
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		1		13,919
Henan Xinmi Kanghua Fire Refractory Co., Ltd	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		722		1,146
Beijing Daishang Trading Co., Ltd	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		1,149		875
Tianjin General Qiugang Pipe Co., Ltd	Partially owned by CEO through indirect shareholding		-		52
Others	Entities either owned or have significant influence by our affiliates or management		553		335
Total		$	172,259	$	177,432

Schedule Of Related Party Transactions, Short Term Loans Related Parties [Table Text Block]

Short-term loans - related parties:

Name of related parties	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Shaanxi Steel	Majority shareholder of Long Steel Group	$	-	$	35,839
Shaanxi Coal and Chemical Industry Group Co., Ltd	Shareholder of Shaanxi Steel		33,580		-
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		1,547		-
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		10,916		19,549
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		-		21,397
Beijing Shenhua Xinyuan Metal Materials Co., Ltd	Partially owned by CEO through indirect shareholding		1,395		1,359
Yangpu Capital Automobile	Partially owned by CEO through indirect shareholding		1,451		1,413
Total		$	48,889	$	79,557

Schedule Of Related Party Transactions Current Maturities Of Long Term Loans Related Parties [Table Text Block]

Current maturities of long-term loans – related parties

Name of related party	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Shaanxi Steel	Majority shareholder of Long Steel Group	$	47,896	$	54,885
Total		$	47,896	$	54,885

Schedule Of Related Party Transactions, Other Payable Related Parties [Table Text Block]

Other payables – related parties:

Other payables – related parties are those nontrade payables arising from transactions between the Company and its related parties, such as advances or payments from these related parties on behalf of the Group.

		September 30,		December 31,
Name of related parties	Relationship	2013		2012
		(in thousands)		(in thousands)
Tianjin Hengying Trading Co, Ltd	Partially owned by CEO through indirect shareholding	$	876	$	2,770
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		51,919		60,180
Shaanxi Steel	Majority shareholder of Long Steel Group		44,173		-
Wendlar Investment & Management Group Co., Ltd	Common control under CEO		911		836
Yangpu Capital Automobile	Partially owned by CEO through indirect shareholding		254		141
Xi’an Pinghe Metallurgical Raw Material Co., Ltd	Noncontrolling shareholder of Long Steel Group		-		4,761
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		4,020		3,695
Maoming Shengze Trading Co., Ltd	Partially owned by CEO through indirect shareholding		1,566		-
Victory Energy Resource Co., Ltd	Partially owned by CEO through indirect shareholding		1,375		-
Others	Entities either owned or have significant influence by our affiliates or management		1,059		642
Total		$	106,153	$	73,025

Schedule Of Related Party Transactions, Customer Deposits Related Parties [Table Text Block]

Customer deposits – related parties:

Name of related parties	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Shaanxi Yuchang Trading Co., Ltd	Significant influence by Long Steel Group	$	10	$	4,869
Sichuan Yutai Trading Co., Ltd	Significant influence by Long Steel Group		-		2,163
Tianjin Hengying Trading Co, Ltd	Partially owned by CEO through indirect shareholding		-		90
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		13,600		8,864
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		679		5,615
Shaanxi Shenganda Trading Co., Ltd	Significant influence by Long Steel Group		-		353
Others	Entities either owned or have significant influence by our affiliates or management		223		44
Total		$	14,512	$	21,998

Schedule Of Related Party Transactions, Deposits Due To Sales Representatives [Table Text Block]

Deposits due to sales representatives – related parties

Name of related parties	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Hancheng Haiyan Coking Co., Ltd	Noncontrolling shareholder of Long Steel Group	$	587	$	619
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		635		619
Shaanxi Yuchang Trading Co., Ltd	Significant influence by Long Steel Group		587		-
Total		$	1,809	$	1,238

Schedule Of Related Party Transactions, Long Term Loans Related Parties [Table Text Block]

Long-term loans – related party:

Name of related party	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Shaanxi Steel	Majority shareholder of Long Steel Group	$	24,450	$	38,088
Total		$	24,450	$	38,088

Schedule Of Related Party Transactions Long Term Other Payable [Table Text Block]

Long-term other payable – related party:

Long-term other payable – related party is a nontrade payable arising from a transaction between the Company and its related party, Shaanxi Steel, in which the Company received an advance from Shaanxi Steel to make payment to a third party for a construction project.

Name of related party	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Shaanxi Steel	Majority shareholder of Long Steel Group	$	-	$	43,008
Total		$	-	$	43,008

Schedule Of Related Party Transactions, Deferred Lease Income [Table Text Block]

Deferred lease income

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Beginning balance	$	77,199	$	78,524
Less: Lease income realized		(1,613)		(2,119)
Exchange rate effect		2,072		794
Ending balance		77,658		77,199
Current portion		(2,178)		(2,120)
Noncurrent portion	$	75,480	$	75,079

Shaanxi Coal and Shaanxi Steel [Member]

Schedule of Capital Leased Assets [Table Text Block]

The following is an analysis of the leased assets under the capital lease:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Machinery	$	603,248	$	587,334
Less: accumulated depreciation		(69,248)		(46,497)
Carrying value of leased assets	$	534,000	$	540,837

XML

Plant and equipment, net (Details 1) (USD $) In Thousands, unless otherwise specified			9 Months Ended
	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2013 1.2 million tons high-strength steel production line [Member]	Sep. 30, 2013 Iron-making system dust removing equipment [Member]	Sep. 30, 2013 Drainage system [Member]	Sep. 30, 2013 Factory wall repair [Member]	Sep. 30, 2013 Gas pipe repair [Member]	Sep. 30, 2013 Office buildings [Member]	Sep. 30, 2013 Equipment updates [Member]	Sep. 30, 2013 5 blast furnace construction [Member]	Sep. 30, 2013 Reconstruction Of Miscellaneous Factory Buildings [Member]	Sep. 30, 2013 Project materials [Member]	Sep. 30, 2013 Others [Member]
Construction in progress	$ 58,111	$ 4,645	$ 32,268	$ 3,307	$ 499	$ 241	$ 121	$ 1,336	$ 7,381	$ 208	$ 690	$ 2,154	$ 9,906
Construction Completion Date			Dec. 31, 2013	Nov. 30, 2013	Nov. 30, 2013	Nov. 30, 2013	Nov. 30, 2013	Nov. 30, 2013	Nov. 30, 2013	Sep. 30, 2014	Jan. 31, 2014

XML

Taxes (Details 2) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
VAT taxes payable	$ 7,309	$ 13,579
Income taxes payable	20	68
Misc. taxes	2,387	3,027
Totals	$ 9,716	$ 16,674

XML

Taxes (Details Textual) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012	Dec. 31, 2011
Preferential Tax Rate			15.00%
Deferred Tax Assets, Operating Loss Carryforwards, Subject to Expiration	$ 436,900,000		$ 436,900,000
Percentage Of Deferred Tax Asset	100.00%		100.00%
Valuation Allowance, Deferred Tax Asset, Change in Amount			0
Value Added Tax Receivable	3,100,000		3,100,000		4,200,000
Value Added Tax On Sales	160,500,000	209,700,000	513,700,000	620,600,000
Value Added Tax On Purchases	156,200,000	206,700,000	494,400,000	594,100,000
Deferred Tax Assets, Valuation Allowance	86,935,000		86,935,000		72,891,000	47,703,000
Tax Initiative Extension Period			10 years
Operating Loss Carryforwards, Date Expiration			The Group’s losses carried forward of $436.9 million will begin to expire in 2014.
UNITED STATES
Percentage Of Deferred Tax Asset	100.00%		100.00%
Net operating losses carried forward	1,600,000		1,600,000
Deferred Tax Assets, Valuation Allowance	500,000		500,000
Operating Loss Carryforwards, Date Expiration			The net operating loss carry forwards for United States income taxes amounted to $1.6 million, which may be available to reduce future years’ taxable income. These carry forwards will expire, if not utilized, starting from 2026 through 2032.
Subsidiaries [Member]
Effective Income Tax Rate Reconciliation, Percent, Total			25.00%
Subsidiaries [Member] | UNITED STATES
Net operating losses carried forward	$ 100,000		$ 100,000
Subsidiaries [Member] | Longmen Joint Venture [Member]
Effective Income Tax Rate Reconciliation, Percent, Total			15.00%
Maximum [Member]
Value Added Tax Rate			17.00%
Minimum [Member]
Value Added Tax Rate			13.00%

XML

Related party transactions and balances (Details Textual) In Millions, unless otherwise specified	9 Months Ended		24 Months Ended			3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2013 USD ($)	Sep. 30, 2012 USD ($)	Dec. 31, 2011 USD ($)	Dec. 31, 2011 CNY	Dec. 31, 2012 USD ($)	Sep. 30, 2013 Shaanxi Iron and Steel Group [Member] USD ($)	Sep. 30, 2012 Shaanxi Iron and Steel Group [Member] USD ($)	Sep. 30, 2013 Shaanxi Iron and Steel Group [Member] USD ($)	Sep. 30, 2012 Shaanxi Iron and Steel Group [Member] USD ($)	Dec. 30, 2010 Tianjin Daqiuzhuang Steel Plates Co Ltd [Member] USD ($)	Dec. 30, 2010 Tianjin Daqiuzhuang Steel Plates Co Ltd [Member] CNY
Capital Lease, Monthly Base Rental	$ 0	$ 1.6	$ 0.2	1.7
Related Party Loans Secured	139.9				118.0
Capital Leases, Income Statement, Lease Revenue						$ 0.5	$ 0.5	$ 1.6	$ 1.6	$ 34.4	215.8

XML

Earnings (Loss) per share (Details Textual)	Sep. 30, 2012
Warrants Exercisable	3,900,871

XML

Related party transactions and balances

9 Months Ended

Sep. 30, 2013

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

Note 20 – Related party transactions and balances

Related party transactions

a. Capital lease

As disclosed in Notes 15 – “Capital lease obligations”, Longmen Joint Venture entered into a capital lease arrangement on April 29, 2011, with Shaanxi Coal and Shaanxi Steel, which are related parties of the Group. The following is an analysis of the leased assets under the capital lease:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Machinery	$	603,248	$	587,334
Less: accumulated depreciation		(69,248)		(46,497)
Carrying value of leased assets	$	534,000	$	540,837

b. On January 1, 2010, General Steel (China), entered into a lease agreement with Tianjin Daqiuzhuang Steel Plates Co., Ltd. (the “Lessee”), whereby General Steel (China) leases its facility located at No. 1, Tonga Street, Daqiuzhuang Town, Jinghai County, Tianjin City to the Lessee (the “Lease Agreement”). The Lease Agreement provides approximately 776,078 square feet of workshops, land, equipment and other facilities amounting to RMB 215.8 million ($34.4 million) to the Lessee and allows the Company to reduce overhead costs while providing a recurring monthly income stream resulting from payments due under the lease. The term of the Lease Agreement was from January 1, 2010 to December 31, 2011 and the monthly base rental rate due to General Steel (China) was approximately $0.2 million (RMB 1.7 million). On July 28, 2011, General Steel (China) (lessor) signed a supplemental agreement with the lessee to extend the lease for an additional five years to December 31, 2016. However, due to current steel market conditions, the lessee informed the Company that they did not intend to extend the lease at June 30, 2012 and has terminated the supplemental agreement early. There was no penalty for early termination. The Company assessed the recoverability of all of its remaining long lived assets at September 30, 2013 and such assessment did not result in any other impairment charges for the three and nine months ended September 30, 2013.

For the three months ended September 30, 2013 and 2012, General Steel (China) did not realize any rental income the related party, and for the nine months ended September 30, 2013 and 2012, General Steel (China) realized rental income $0 million and $1.6 million, respectively, which has been included in “other non-operating income (expense), net” in the unaudited condensed consolidated statements of operations and comprehensive income (loss).

c. The following chart summarized sales to related parties for the three and nine months ended September 30, 2013 and 2012.

		Three months ended		Three months ended
Name of related parties	Relationship	September 30, 2013		September 30, 2012
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	63,793	$	123,631
Sichuan Yutai Trading Co., Ltd	Significant influence by Long Steel Group**		-		16,998
Shaanxi Yuchang Trading Co., Ltd	Significant influence by Long Steel Group		1,081		-
Shaanxi Haiyan Trade Co., Ltd	Significant influence by Long Steel Group		85		12,480
Shaanxi Shenganda Trading Co., Ltd	Significant influence by Long Steel Group		19,866		7,599
Shaanxi Steel	Majority shareholder of Long Steel Group		979		25
Shaanxi Long Steel Group Baoji Steel Rolling Co., Ltd	Subsidiary of Long Steel Group		9		11,392
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		1,782		20,758
Shaanxi Coal and Chemical Industry Group Co., Ltd	Shareholder of Shaanxi Steel		7,951		-
Others	Entities either owned or have significant influence by our affiliates or management		-		-
Total		$	95,546	$	192,883

**Long Steel Group has the ability to significantly influence the operating and financial decisions of the entity through equity ownership either directly or through key employees, commercial contractual terms, or the ability to assign management personnel.

		Nine months ended		Nine months ended
Name of related parties	Relationship	September 30, 2013		September 30, 2012
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	226,754	$	360,820
Sichuan Yutai Trading Co., Ltd	Significant influence by Long Steel Group		72		147,847
Shaanxi Yuchang Trading Co., Ltd	Significant influence by Long Steel Group		21,491		41,433
Shaanxi Haiyan Trade Co., Ltd	Significant influence by Long Steel Group		15,681		43,015
Shaanxi Shenganda Trading Co., Ltd	Significant influence by Long Steel Group		56,545		34,132
Shaanxi Steel	Majority shareholder of Long Steel Group		2,390		634
Shaanxi Long Steel Group Baoji Steel Rolling Co., Ltd	Subsidiary of Long Steel Group		2,122		31,485
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		33,075		37,965
Shaanxi Coal and Chemical Industry Group Co., Ltd	Shareholder of Shaanxi Steel		22,577		-
Others	Entities either owned or have significant influence by our affiliates or management		-		1,493
Total		$	380,707	$	698,824

d.  The following charts summarize purchases from related parties for the three and nine months ended September 30, 2013 and 2012.

		Three months ended		Three months ended
Name of related parties	Relationship	September 30, 2013		September 30, 2012
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	101,606	$	123,637
Hancheng Haiyan Coking Co., Ltd	Noncontrolling shareholder of Long Steel Group		31,331		47,487
Xi’an Pinghe Metallurgical Raw Material Co., Ltd	Noncontrolling shareholder of Long Steel Group		1,181		16,674
Shaanxi Long Steel Group Baoji Steel Rolling Co., Ltd	Subsidiary of Long Steel Group		-		1,568
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		1		2,257
Shaanxi Huafu New Energy Co., Ltd	Significant influence by the Long Steel Group		10,529		10,322
Beijing Daishang Trading Co., Ltd.	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		1,726		1,049
Others	Entities either owned or have significant influence by our affiliates or management		64		91
Total		$	146,438	$	203,085

		Nine months ended		Nine months ended
Name of related parties	Relationship	September 30, 2013		September 30, 2012
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	376,104	$	453,947
Hancheng Haiyan Coking Co., Ltd	Noncontrolling shareholder of Long Steel Group		148,322		195,861
Xi’an Pinghe Metallurgical Raw Material Co., Ltd	Noncontrolling shareholder of Long Steel Group		13,678		83,251
Shaanxi Long Steel Group Baoji Steel Rolling Co., Ltd	Subsidiary of Long Steel Group		53		5,332
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		212		4,417
Shaanxi Huafu New Energy Co., Ltd	Significant influence by the Long Steel Group		28,618		24,347
Beijing Daishang Trading Co., Ltd.	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		6,635		3,653
Others	Entities either owned or have significant influence by our affiliates or management		300		305
Total		$	573,922	$	771,113

Related party balances

a. Loans receivable – related parties:

Name of related parties	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	-	$	63,319
Teamlink Investment Co., Ltd	Partially owned by CEO* through indirect shareholding		4,540		6,000
Total		$	4,540	$	69,319

*The CEO is referred to herein as the chief executive officer of General Steel Holdings, Inc. 

See Note 3 – loans receivable – related parties for loan details.

b. Accounts receivables – related parties:

Name of related parties	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	1,834	$	10,409
Shaanxi Long Steel Group Baoji Steel Rolling Co., Ltd	Subsidiary of Long Steel Group		-		2,017
Tianjin Daqiuzhuang Steel Plates	Partially owned by CEO through indirect shareholding		19		18
Shaanxi Steel	Majority shareholder of Long Steel Group		1,227		2,435
Others			172		87
Total		$	3,252	$	14,966

c. Other receivables – related parties:

Other receivables - related parties are those nontrade receivables arising from transactions between the Company and its related parties, such as advances or payments made on behalf of these related parties.

Name of related parties	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	561	$	301
Shaanxi Steel	Majority shareholder of Long Steel Group		44,811		65,981
Tianjin General Quigang Pipe Co., Ltd	Partially owned by CEO through indirect shareholding		1,228		1,195
Tianjin Dazhan Industry Co, Ltd	Partially owned by CEO through indirect shareholding		489		476
Maoming Shengze Trading Co., Ltd.	Partially owned by CEO through indirect shareholding		3,834		-
Others	Entities either owned or have significant influence by our affiliates or management		578		429
Total		$	51,501	$	68,382

d. Advances on inventory purchase – related parties:

Name of related parties	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	1,377	$	1,367
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		6,254		-
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		12,805		-
Tianjin General Qiugang Pipe Co., Ltd	Partially owned by CEO through indirect shareholding		9,210		41,316
Maoming Shengze Trading Co., Ltd	Partially owned by CEO through indirect shareholding		-		3,733
Others	Entities either owned or have significant influence by our affiliates or management		21		-
Total		$	29,667	$	46,416

e. Accounts payable - related parties:

Name of related parties	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Hancheng Haiyan Coking Co., Ltd	Noncontrolling shareholder of Longmen Joint Venture	$	60,463	$	58,661
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		100,579		91,511
Shaanxi Coal and Chemical Industry Group Co., Ltd.	Shareholder of Shaanxi Steel		-		5,652
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		954		3
Xi’an Pinghe Metallurgical Raw Material Co., Ltd	Noncontrolling shareholder of Long Steel Group		7,838		5,278
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		1		13,919
Henan Xinmi Kanghua Fire Refractory Co., Ltd	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		722		1,146
Beijing Daishang Trading Co., Ltd	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		1,149		875
Tianjin General Qiugang Pipe Co., Ltd	Partially owned by CEO through indirect shareholding		-		52
Others	Entities either owned or have significant influence by our affiliates or management		553		335
Total		$	172,259	$	177,432

f. Short-term loans - related parties:

Name of related parties	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Shaanxi Steel	Majority shareholder of Long Steel Group	$	-	$	35,839
Shaanxi Coal and Chemical Industry Group Co., Ltd	Shareholder of Shaanxi Steel		33,580		-
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		1,547		-
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		10,916		19,549
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		-		21,397
Beijing Shenhua Xinyuan Metal Materials Co., Ltd	Partially owned by CEO through indirect shareholding		1,395		1,359
Yangpu Capital Automobile	Partially owned by CEO through indirect shareholding		1,451		1,413
Total		$	48,889	$	79,557

See Note 9 – Debt for the loan details.

g. Current maturities of long-term loans – related parties

Name of related party	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Shaanxi Steel	Majority shareholder of Long Steel Group	$	47,896	$	54,885
Total		$	47,896	$	54,885

h. Other payables – related parties:

Other payables – related parties are those nontrade payables arising from transactions between the Company and its related parties, such as advances or payments from these related parties on behalf of the Group.

		September 30,		December 31,
Name of related parties	Relationship	2013		2012
		(in thousands)		(in thousands)
Tianjin Hengying Trading Co, Ltd	Partially owned by CEO through indirect shareholding	$	876	$	2,770
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		51,919		60,180
Shaanxi Steel	Majority shareholder of Long Steel Group		44,173		-
Wendlar Investment & Management Group Co., Ltd	Common control under CEO		911		836
Yangpu Capital Automobile	Partially owned by CEO through indirect shareholding		254		141
Xi’an Pinghe Metallurgical Raw Material Co., Ltd	Noncontrolling shareholder of Long Steel Group		-		4,761
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		4,020		3,695
Maoming Shengze Trading Co., Ltd	Partially owned by CEO through indirect shareholding		1,566		-
Victory Energy Resource Co., Ltd	Partially owned by CEO through indirect shareholding		1,375		-
Others	Entities either owned or have significant influence by our affiliates or management		1,059		642
Total		$	106,153	$	73,025

i. Customer deposits – related parties:

Name of related parties	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Shaanxi Yuchang Trading Co., Ltd	Significant influence by Long Steel Group	$	10	$	4,869
Sichuan Yutai Trading Co., Ltd	Significant influence by Long Steel Group		-		2,163
Tianjin Hengying Trading Co, Ltd	Partially owned by CEO through indirect shareholding		-		90
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		13,600		8,864
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		679		5,615
Shaanxi Shenganda Trading Co., Ltd	Significant influence by Long Steel Group		-		353
Others	Entities either owned or have significant influence by our affiliates or management		223		44
Total		$	14,512	$	21,998

j. Deposits due to sales representatives – related parties

Name of related parties	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Hancheng Haiyan Coking Co., Ltd	Noncontrolling shareholder of Long Steel Group	$	587	$	619
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		635		619
Shaanxi Yuchang Trading Co., Ltd	Significant influence by Long Steel Group		587		-
Total		$	1,809	$	1,238

k. Long-term loans – related party:

Name of related party	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Shaanxi Steel	Majority shareholder of Long Steel Group	$	24,450	$	38,088
Total		$	24,450	$	38,088

The Company also provided guarantee on related parties’ bank loans amounting to $139.9 million and $118.0 million as of September 30, 2013 and as of December 31, 2012, respectively.

l. Long-term other payable – related party:

Long-term other payable – related party is a nontrade payable arising from a transaction between the Company and its related party, Shaanxi Steel, in which the Company received an advance from Shaanxi Steel to make payment to a third party for a construction project.

Name of related party	Relationship	September 30, 2013		December 31, 2012
		(in thousands)		(in thousands)
Shaanxi Steel	Majority shareholder of Long Steel Group	$	-	$	43,008
Total		$	-	$	43,008

m. Deferred lease income

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Beginning balance	$	77,199	$	78,524
Less: Lease income realized		(1,613)		(2,119)
Exchange rate effect		2,072		794
Ending balance		77,658		77,199
Current portion		(2,178)		(2,120)
Noncurrent portion	$	75,480	$	75,079

For the three months ended September 30, 2013 and 2012, the Company realized lease income from Shaanxi Steel, a related party, amounted to $0.5 million and $0.5 million, respectively.

For the nine months ended September 30, 2013 and 2012, the Company realized lease income from Shaanxi Steel, a related party, amounted to $1.6 million and $1.6 million, respectively.

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Background

9 Months Ended

Sep. 30, 2013

Background [Abstract]

Background [Text Block]

Note 1 – Background

General Steel Holdings, Inc. (the “Company”) was incorporated on August 5, 2002 in the state of Nevada. The Company through its 100% owned subsidiary, General Steel Investment, operates steel companies serving various industries in the People’s Republic of China (“PRC”). The Company’s main operation is manufacturing and sales of steel products such as steel rebar, hot-rolled carbon and silicon sheets and spiral-weld pipes. The Company, together with its subsidiaries, majority owned subsidiaries and variable interest entity, is referred to as the “Group”.

On April 29, 2011, a 20-year Unified Management Agreement (“the Agreement”) was entered into between the Company, the Company’s 60%-owned subsidiary Shaanxi Longmen Iron and Steel Co., Ltd. (“Longmen Joint Venture”), Shaanxi Coal and Chemical Industry Group Co., Ltd. (“Shaanxi Coal”) and Shaanxi Iron and Steel Group (“Shaanxi Steel”). Shaanxi Steel is the controlling shareholder of Shaanxi Longmen Iron and Steel Group Co., Ltd (“Long Steel Group”) which is the non-controlling interest holder in Longmen Joint Venture, and Shaanxi Coal, a state owned entity, is the parent company of Shaanxi Steel. Under the terms of the Agreement, all manufacturing machinery and equipment of Longmen Joint Venture and the $603.2 million (or approximately RMB 3.7 billion) of newly constructed iron and steel making facilities owned by Shaanxi Steel, which includes one 400m ² sintering machine, two 1,280m ³ blast furnaces, two 120 ton converters and some auxiliary systems, are managed collectively as a single virtual asset pool (“Asset Pool”). Longmen Joint Venture manages the Asset Pool as the principal operating entity and is responsible for the daily operations of the new and existing facilities.

The Agreement leverages each of the parties’ operating strengths, allowing the Longmen Joint Venture to derive the greatest benefit from the cooperation and the newly constructed iron and steel making facilities. At the designed efficiency level, these new facilities are expected to contribute three million tons of crude steel production capacity per year.

Longmen Joint Venture pays Shaanxi Steel for the use of the constructed iron and steel making facilities an amount equaling the depreciation expense on the equipment constructed by Shaanxi Steel as well as 40% of the pre-tax profit generated by the Asset Pool. The remaining 60% of the pre-tax profit is allocated to Longmen Joint Venture. As a result, the Company’s economic interest in the profit generated by Longmen Joint Venture decreased from 60% to 36%. However, the overall capacity under the management of Longmen Joint Venture has increased by three million tons, or 75%. The Agreement is also expected to improve Longmen Joint Venture’s cost structure through sustainable and steady sourcing of key raw materials and reduced transportation costs. The distribution of profit is subject to a prospective adjustment after the first two years based on each entity’s actual investment of time and resources into the Asset Pool.

The parties to the Agreement have agreed to establish the Shaanxi Longmen Iron and Steel Unified Management Supervisory Committee ("Supervisory Committee") to ensure that the facilities and related resources are being operated and managed according to the stipulations set forth in the Agreement. However, the Board of Directors of Longmen Joint Venture, of which the Company holds 4 out of 7 seats, requires a simple majority vote. Therefore, the Board of Directors of Longmen Joint Venture remains the controlling decision-making body of Longmen Joint Venture and the Asset Pool. See Note 2(c) “Consolidation of VIE.” 

The Agreement constitutes an arrangement that involves a lease which met certain of the criteria of a capital lease and therefore, the lease is accounted for as such by Longmen Joint Venture as a capital lease. See Notes 2 “Summary of significant accounting policies”, 15 “Capital lease obligations” and 16 “Profit sharing liability”.

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Related party transactions and balances (Details 9) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Dec. 31, 2012
Current maturities of long-term loans - related party	$ 47,896	$ 47,896	$ 54,885
Shaanxi Steel [Member]
Current maturities of long-term loans - related party	$ 47,896	$ 47,896	$ 54,885
Related Party Relationship	Majority shareholder of Long Steel Group	Majority shareholder of Long Steel Group

XML

Loans receivable - related parties

9 Months Ended

Sep. 30, 2013

Loans and Leases Receivable, Related Parties Disclosure [Abstract]

Loans Receivable Related Parties Disclosure [Text Block]

Note 3 – Loans receivable – related parties

Loans receivable – related parties represents amounts the Company expects to collect from related parties upon maturity. 

The Company had the following loans receivable – related parties due within one year as of:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Loans to Long Steel Group; due on demand and non-interest bearing.		-		63,319
Loan to Teamlink Investment Co., Ltd; due in December 2013, June 2014, and July 2014; interest rate was 4.75%		4,540		6,000
Total loans receivable – related parties	$	4,540	$	69,319

See Note 20 “Related party transactions and balances” for the nature of the relationship of related parties.

Total interest income for the loans amounted to $0.1 million and $0 for the three months ended September 30, 2013 and 2012, respectively. 

Total interest income for the loans amounted to $0.2 million and $1.8 million for the nine months ended September 30, 2013 and 2012, respectively.

XML

Commitment and contingencies (Details 1) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Guarantor Obligations, Current Carrying Value	$ 304,571
Line of credit [Member]
Guaranty Obligations, Guaranty Due Date	Various from October 2013 to August 2015
Three-party financing agreements [Member]
Guaranty Obligations, Guaranty Due Date	Various from October 2013 to January 2014
Confirming storage [Member]
Guaranty Obligations, Guaranty Due Date	Various from December 2013 to September 2014
Financing by the rights of goods delivery in future [Member]
Guaranty Obligations, Guaranty Due Date	Various from December 2013 to March 2015
Longmen Joint Venture [Member]
Guarantor Obligations, Current Carrying Value	304,571
Longmen Joint Venture [Member] | Line of credit [Member]
Guarantor Obligations, Current Carrying Value	178,931
Longmen Joint Venture [Member] | Three-party financing agreements [Member]
Guarantor Obligations, Current Carrying Value	42,315
Longmen Joint Venture [Member] | Confirming storage [Member]
Guarantor Obligations, Current Carrying Value	19,951
Longmen Joint Venture [Member] | Financing by the rights of goods delivery in future [Member]
Guarantor Obligations, Current Carrying Value	$ 63,374

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Advances on inventory purchases

9 Months Ended

Sep. 30, 2013

Inventory Disclosure [Abstract]

Advances On Inventory Purchase [Text Block]

Note 6 – Advances on inventory purchases

Advances on inventory purchases are monies deposited or advanced to outside vendors or related parties on future inventory purchases. Most of the Company’s vendors require a certain amount of money to be deposited with them as a guarantee that the Company will complete its purchases on a timely basis.

This amount is refundable and bears no interest. The Company has legally binding contracts with its vendors, which require the deposit to be returned to the Company or netted against accounts payable due to its vendors to the extent there are unpaid balances when the contract ends. The inventory is normally delivered within one month after the monies have been advanced. The total outstanding amount, including advances to related parties, was $109.5 million and $126.1 million as of September 30, 2013 and December 31, 2012, respectively.

XML

Intangible assets, net (Details 1) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013
Estimated amortization and depletion expenses, June 30, 2014	$ 1,082
Estimated amortization and depletion expenses, June 30, 2015	1,082
Estimated amortization and depletion expenses, June 30, 2016	1,082
Estimated amortization and depletion expenses, June 30, 2017	1,082
Estimated amortization and depletion expenses, June 30, 2018	1,082
Estimated amortization and depletion expenses, Thereafter	18,518
Estimated amortization and depletion expenses, Total	23,928
Gross carrying amount, June 30, 2014	22,846
Gross carrying amount, June 30, 2015	21,764
Gross carrying amount, June 30, 2016	20,682
Gross carrying amount, June 30, 2017	19,600
Gross carrying amount, June 30, 2018	18,518
Gross carrying amount, Thereafter	$ 0

XML

Accounts receivable (including related parties), net

9 Months Ended

Sep. 30, 2013

Receivables [Abstract]

Accounts Receivable [Text Block]

Note 4 – Accounts receivable (including related parties), net

Accounts receivable, including related party receivables, net of allowance for doubtful accounts consists of the following:  

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Accounts receivable	$	9,729	$	8,062
Less: allowance for doubtful accounts		(1,152)		(1,367)
Accounts receivable – related parties		3,252		14,966
Net accounts receivable	$	11,829	$	21,661

Movement of allowance for doubtful accounts is as follows:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Beginning balance	$	1,367	$	2,023
Charge to expense		-		433
Less: recovery		(249)		(1,109)
Exchange rate effect		34		20
Ending balance	$	1,152	$	1,367

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Taxes (Tables)

9 Months Ended

Sep. 30, 2013

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

Significant components of the provision for income taxes on earnings and deferred taxes on net operating losses from operations for the three months ended September 30, 2013 and 2012 are as follows:

	For the three months ended		For the three months ended
(In thousands)	September 30, 2013		September 30, 2012
Current	$	25	$	100
Deferred		-		-
Total provision for income taxes	$	25	$	100

	For the nine months ended		For the nine months ended
(In thousands)	September 30, 2013		September 30, 2012
Current	$	201	$	510
Deferred		-		169
Total provision (benefit) for income taxes	$	201	$	679

Summary of Valuation Allowance [Table Text Block]

Movement of valuation allowance:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Beginning balance	$	72,891	$	47,703
Current period addition		12,776		25,180
Current period reversal		(857)		-
Deconsolidation of Tongxing		-		(216)
Exchange difference		2,125		224
Ending balance	$	86,935	$	72,891

Schedule Of Taxes Payable [Table Text Block]

Taxes payable consisted of the following: 

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
VAT taxes payable	$	7,309	$	13,579
Income taxes payable		20		68
Misc. taxes		2,387		3,027
Totals	$	9,716	$	16,674

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Statutory reserves

9 Months Ended

Sep. 30, 2013

Statutory Reserves [Abstract]

Statutory Reserves [Text Block]

Note 23 – Statutory reserves

The laws and regulations of the People’s Republic of China require that before a foreign -invested enterprise distributes profits to its shareholders, it must first satisfy all tax liabilities, provision for losses in previous years, and make allocations, in proportions determined at the discretion of the board of directors, to the statutory reserves. The statutory reserves include the surplus reserve funds and the enterprise fund and these statutory reserves represent restricted retained earnings.

Surplus reserve fund

The Company is required to transfer 10% of its net income, as determined in accordance with the PRC accounting rules and regulations, to a statutory surplus reserve fund until such reserve balance reaches 50% of the Company’s registered capital.

The transfer to this reserve must be made before distribution of any dividend to shareholders. The surplus reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any, and may be utilized for business expansion or converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of the shares currently held by them, provided that the remaining reserve balance after such issue is not less than 25% of the registered capital. For the periods ended September 30, 2013 and 2012, the Company did not make any contributions to these reserves.

Special reserve

The Company is required by the PRC government to reserve safety and maintenance expense to the cost of production based on the actual quantity of mineral exploited.  The amount of reserves is determined within the unit price range provided by Ministry of Finance of PRC. For the nine months ended September 30, 2013 and 2012, the Company made contributions of $0.7 million and $0.9 million to these reserves, respectively and used $0.4 million and $0.9 million of safety and maintenance expense, respectively.

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Summary of significant accounting policies (Tables)

9 Months Ended

Sep. 30, 2013

Schedule of Subsidiary of Limited Liability Company or Limited Partnership, Description [Table Text Block]

The unaudited condensed consolidated financial statements of the Company reflect the activities of the following major directly owned subsidiaries: 

		Percentage
Subsidiary		of Ownership
General Steel Investment Co., Ltd.	British Virgin Islands		100.0	%
General Steel (China) Co., Ltd. (“General Steel (China)”)	PRC		100.0	%
Baotou Steel – General Steel Special Steel Pipe Joint Venture Co., Ltd.	PRC		80.0	%
Yangpu Shengtong Investment Co., Ltd.	PRC		99.1	%
Tianjin Qiu Steel Investment Co., Ltd. (“Qiu Steel”)	PRC		98.7	%
Longmen Joint Venture	PRC		VIE/60.0	%
Maoming Hengda Steel Company, Ltd. (“Maoming Hengda”)	PRC		99.0	%
Tianwu General Steel Material Trading Co., Ltd (“Tianwu Joint Venture”)	PRC		60.0	%

Schedule Of Consolidated Assets and Liabilities Of Variable Interest Entities and Subsidiaries [Table Text Block]

The carrying amount of the VIE and its subsidiaries’ consolidated assets and liabilities are as follows:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Current assets	$	1,253,672	$	1,285,967
Plant and equipment, net		1,239,805		1,154,811
Other noncurrent assets		44,475		72,428
Total assets		2,537,952		2,513,206
Total liabilities		(3,006,938)		(2,943,761)
Net liabilities	$	(468,986)	$	(430,555)

Schedule Of Liabilities Of Variable Interest Entities and Subsidiaries [Table Text Block]

VIE and its subsidiaries’ liabilities consist of the following:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Current liabilities:
Short term notes payable	$	950,498	$	971,117
Accounts payable		466,631		324,563
Accounts payable - related parties		171,759		177,160
Short term loans - bank		215,955		114,935
Short term loans - others		123,974		141,290
Short term loans - related parties		42,613		35,839
Current maturities of long-term loans – related party		56,372		54,885
Other payables and accrued liabilities		43,978		29,769
Other payables - related parties		96,901		64,941
Customer deposits		94,767		109,120
Customer deposits - related parties		14,512		21,998
Deposit due to sales representatives		28,184		33,870
Deposit due to sales representatives – related parties		1,809		1,238
Taxes payable		8,258		15,339
Deferred lease income		2,178		2,120
Intercompany payable to be eliminated		-		30,476
Total current liabilities		2,318,416		2,128,660
Non-current liabilities:
Long term loans - related parties		15,974		38,088
Long-term other payable – related party		-		43,008
Deferred lease income - noncurrent		75,480		75,079
Capital lease obligations		354,576		330,099
Profit sharing liability		241,090		328,827
Other noncurrent liabilities		1,402		-
Total non-current liabilities		688,522		815,101
Total liabilities of consolidated VIE	$	3,006,938	$	2,943,761

Schedule Of Statement Of Operations Of Variable Interest Entities and Subsidiaries [Table Text Block]

VIE and its subsidiaries’ statements of operations are as follows:

	Three months ended		Three months ended
	September 30, 2013		September 30, 2012
	(in thousands)		(in thousands)
Sales	$	606,444	$	708,974
Gross profit (loss)	$	8,122	$	(18,417)
Income (loss) from operations	$	32,967	$	(37,000)
Net income (loss) attributable to controlling interest	$	8,284	$	(39,494)

	Nine months ended		Nine months ended
	September 30, 2013		September 30, 2012
	(in thousands)		(in thousands)
Sales	$	1,903,933	$	2,126,556
Gross profit (loss)	$	(23,704)	$	12,628
Income (loss) from operations	$	32,998	$	(40,071)
Net loss attributable to controlling interest	$	(18,335)	$	(92,974)

Schedule of Line of Credit Facilities [Table Text Block]

The Company received lines of credit from the listed major banks totaling $110.8 million with expiration dates ranging from September 27, 2014 to October 26, 2014.

	Amount of
	Line of Credit
Banks	(in millions)		Repayment Date
Bank of China		6.5	August 25, 2014 to October 26, 2014
China Everbright Bank		48.9	October 8, 2014
Bank of Xi’an		32.6	October 9, 2014
Bank of Jinzhou		22.8	September 27, 2014*
Total	$	110.8

* Management expects the line of credit will be extended after September 27, 2014.

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

The following table sets forth by level within the fair value hierarchy, the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2013:

	Carrying Value as		Fair Value Measurements at September 30,
	of September 30,		2013
(in thousands)	2013		Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Profit sharing liability	$	241,090	$	-	$	-	$	241,090
Total	$	241,090	$	-	$	-	$	241,090

The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2012:

	Carrying Value as		Fair Value Measurements at December 31,
	of December 31,		2012
(in thousands)	2012		Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Derivative liabilities	$	1	$	-	$	1	$	-
Profit sharing liability		328,827		-		-		328,827
Total	$	328,828	$	-	$	1	$	328,827

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

The following is a reconciliation of the beginning and ending balance of the assets and liabilities measured at fair value on a recurring basis for the nine month ended September 30, 2013 and for the year ended December 31, 2012:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Beginning balance	$	328,828	$	303,243
Change in fair value of profit sharing liability		(107,877)		-
Current period interest expense accreted		12,440		22,499
Change of derivative liabilities charged to earnings		1		9
Exchange rate effect		7,698		3,077
Ending balance	$	241,090	$	328,828

Schedule Of Property Plant and Equipment Estimated Useful Life [Table Text Block]

The estimated useful lives are as follows:

Buildings and Improvements	10-40 Years
Machinery	10-30 Years
Machinery and equipment under capital lease	20 Years
Other equipment	5 Years
Transportation Equipment	5 Years

Schedule of Acquired Finite-Lived Intangible Assets by Major Class [Table Text Block]

Other than the land use rights that General Steel (China) acquired in 2001, the Company amortizes the land use rights over their 50 year term.

Entity	Original Cost		Expires on
	(in thousands)
General Steel (China)	$	3,867		2050 & 2053
Longmen Joint Venture	$	24,226		2048 & 2052
Maoming Hengda	$	2,705		2054

Schedule Of Investments By Affiliates [Table Text Block]

The table below summarizes Longmen Joint Venture’s investment holdings as of September 30, 2013 and December 31, 2012.

			September 30,				December 31,
			2013				2012
	Year		Net investment		Owned		Net investment		Owned
Unconsolidated entities	acquired		(In thousands)		%		(In thousands)		%
Xian Delong Powder Engineering Materials Co., Ltd.		2007	$	1,161		24.1	$	1,166		24.1

Longmen Joint Venture [Member]

Schedule Of Estimated Cash Flow [Table Text Block]

The detailed breakdown of Longmen Joint Venture’s estimated cash flows items are listed below.

	Cash inflow (outflow)
	(in millions)
	For the twelve months ended
	September 30, 2014
Current liabilities over current assets (excluding non-cash items) as of September 30, 2013 (unaudited)	$	(1,072.0)
Projected cash financing and outflows:
Cash provided by line of credit from banks		110.8
Cash provided by vendor financing		815.0
Cash provided by financing sales		81.5
Cash provided by other financing		77.4
Cash provided by sales representatives		30.0
Cash projected to be used in operations in the twelve months ended September 30, 2014		(28.6)
Net projected change in cash for the twelve months ended September 30, 2014	$	14.1

Vendor Financing [Member]

Schedule Of Estimated Cash Flow [Table Text Block]

Longmen Joint Venture signed additional vendor financing agreements, which will provide liquidity to the Company in a total amount of $815.0 million with the following companies:

		Financing Amount
Company	Financing period covered	(in millions)
Company A – related party	January 6, 2013 – January 5, 2015	$	163.0
Company B – third party	January 6, 2013 – November 7, 2015		163.0
Company C – third party	October 1, 2013 – March 31, 2015		489.0
Total		$	815.0

Other Financing [Member]

Schedule Of Estimated Cash Flow [Table Text Block]

On January 7, 2013, November 6, 2013, November 7, 2013, Longmen Joint Venture signed a payment extension agreement with each company listed below. In total, Longmen Joint Venture can get $77.4 million in financial support from a two-year balancing payment extension granted by the following five companies:

			Financing Amount
Company	Financing period covered		(in millions)
Company E – related party	January 7, 2013 – January 6, 2015	$	16.3
Company F – related party	January 7, 2013 – January 6, 2015		21.2
Company G – related party	January 7, 2013 – January 6, 2015		7.3
Company H – related party	November 7, 2013 – November 7, 2015		16.3
Company I – related party	November 6, 2013 – November 6, 2015		16.3
Total		$	77.4

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Plant and equipment, net (Details Textual) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended		3 Months Ended		9 Months Ended
	Sep. 30, 2013 USD ($)	Sep. 30, 2012 USD ($)	Sep. 30, 2013 USD ($)	Sep. 30, 2012 USD ($)	Dec. 31, 2012 USD ($)	Dec. 31, 2012 CNY	Sep. 30, 2013 Assets Held under Capital Leases [Member] USD ($)	Sep. 30, 2012 Assets Held under Capital Leases [Member] USD ($)	Sep. 30, 2013 Assets Held under Capital Leases [Member] USD ($)	Sep. 30, 2012 Assets Held under Capital Leases [Member] USD ($)
Depreciation	$ 21.6	$ 20.8	$ 64.1	$ 61.4			$ 7.1	$ 7.0	$ 21.2	$ 20.9
Impairment of plant and equipment					$ 20.2	127.2
Lease Expiration Date			Apr. 30, 2031

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Related party transactions and balances (Details 4) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Dec. 31, 2012
Accounts Receivable, Related Parties, Current	$ 3,252	$ 3,252	$ 14,966
Long Steel Group [Member]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture	Noncontrolling shareholder of Longmen Joint Venture
Accounts Receivable, Related Parties, Current	1,834	1,834	10,409
Shaanxi Long Steel Group Baoji Steel Rolling Co Ltd [Member]
Related Party Relationship	Subsidiary of Long Steel Group	Subsidiary of Long Steel Group
Accounts Receivable, Related Parties, Current	0	0	2,017
Tianjin Daqiuzhuang Steel Plates [Member]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Accounts Receivable, Related Parties, Current	19	19	18
Shaanxi Steel [Member]
Related Party Relationship	Majority shareholder of Long Steel Group	Majority shareholder of Long Steel Group
Accounts Receivable, Related Parties, Current	1,227	1,227	2,435
Others [Member]
Related Party Relationship	Entities either owned or have significant influence by our affiliates or management	Entities either owned or have significant influence by our affiliates or management
Accounts Receivable, Related Parties, Current	$ 172	$ 172	$ 87

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Segments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2013		Sep. 30, 2012		Sep. 30, 2013		Sep. 30, 2012		Dec. 31, 2012
Sales:
Segment Reporting Information, Revenue for Reportable Segment	$ 613,853		$ 840,771		$ 1,969,375		$ 2,276,150
Interdivisional Sales Revenue	(3,758)		(129,346)		(54,338)		(136,001)
TOTAL SALES	610,095		711,425		1,915,037		2,140,149
Gross profit:
Segment Reporting Gross Profit Loss	8,231		(13,596)		(23,238)		20,078
Interdivision Gross Profit Loss	0		0		0		0
GROSS PROFIT	8,231		(13,596)		(23,238)		20,078
Income (loss) from operations:
Segment Reporting Income Loss From Operations	31,572		(35,033)		28,679		(37,467)
Interdivision Income Loss From Operations	0		0		0		0
Unallocated Income Loss From Operations	(1,177)	[1]	(1,350)	[1]	(3,504)	[1]	(4,003)	[1]
INCOME (LOSS) FROM OPERATIONS	30,395		(36,383)		25,175		(41,470)
Net income (loss) attributable to General Steel Holdings, Inc.:
Segment Reporting Income Loss Net	4,917		(40,190)		(29,616)		(98,709)
Interdivision Income Loss Net	0		0		0		0
Unallocated Income Loss Net	(1,116)	[1]	(1,408)	[1]	(3,298)	[1]	(4,050)	[1]
NET LOSS ATTRIBUTABLE TO GENERAL STEEL HOLDINGS, INC.	3,801		(41,598)		(32,914)		(102,759)
Depreciation and amortization:
Depreciation, amortization and depletion	21,888		21,208		64,955		62,538
Finance/interest expenses:
Interdivision Interest Expense	0		0		0		0
Unallocated Finance Interest Expense	1	[1]	(3)	[1]	3	[1]	(1)	[1]
Finance/interest expenses	25,503		36,615		81,355		138,929
Capital expenditures:
Consolidated capital expenditures	0	[1]	0	[1]	0	[1]	0	[1]
Equipment purchase and intangible assets	16,455		3,298		75,326		15,909
ASSETS
Interdivision Assets	(84,880)				(84,880)				(57,436)
Reconciling item	5,654	[2]			5,654	[2]			7,074	[2]
TOTAL ASSETS	2,672,026				2,672,026				2,650,682
Longmen Joint Venture [Member]
Sales:
Segment Reporting Information, Revenue for Reportable Segment	606,444		708,974		1,903,933		2,126,556
Gross profit:
Segment Reporting Gross Profit Loss	8,122		(18,417)		(23,704)		12,628
Income (loss) from operations:
Segment Reporting Income Loss From Operations	32,967		(37,000)		32,998		(40,071)
Net income (loss) attributable to General Steel Holdings, Inc.:
Segment Reporting Income Loss Net	8,284		(39,494)		(18,335)		(92,974)
Depreciation and amortization:
Depreciation, amortization and depletion	21,014		19,915		62,295		58,573
Finance/interest expenses:
Segment Reporting Finance Interest Expense	23,252		33,989		73,424		129,683
Capital expenditures:
Equipment purchase and intangible assets	16,455		3,259		60,461		19,604
ASSETS
Segment Reporting Assets	2,537,952				2,537,952				2,513,206
Maoming Hengda Steel Company Ltd [Member]
Sales:
Segment Reporting Information, Revenue for Reportable Segment	252		1,134		3,124		4,003
Gross profit:
Segment Reporting Gross Profit Loss	(57)		(761)		188		(1,174)
Income (loss) from operations:
Segment Reporting Income Loss From Operations	(719)		(1,062)		(1,741)		(2,498)
Net income (loss) attributable to General Steel Holdings, Inc.:
Segment Reporting Income Loss Net	(694)		(1,073)		(1,681)		(2,393)
Depreciation and amortization:
Depreciation, amortization and depletion	307		451		933		1,447
Finance/interest expenses:
Segment Reporting Finance Interest Expense	1		35		1		47
Capital expenditures:
Equipment purchase and intangible assets	0		23		2		38
ASSETS
Segment Reporting Assets	29,340				29,340				29,687
Baotou Steel Pipe Joint Venture [Member]
Sales:
Segment Reporting Information, Revenue for Reportable Segment	2,921		1,322		3,902		3,923
Gross profit:
Segment Reporting Gross Profit Loss	160		120		249		193
Income (loss) from operations:
Segment Reporting Income Loss From Operations	20		630		(285)		224
Net income (loss) attributable to General Steel Holdings, Inc.:
Segment Reporting Income Loss Net	16		403		(227)		(263)
Depreciation and amortization:
Depreciation, amortization and depletion	62		52		185		134
Finance/interest expenses:
Segment Reporting Finance Interest Expense	0		127		0		381
Capital expenditures:
Equipment purchase and intangible assets	0		1		8		6
ASSETS
Segment Reporting Assets	5,116				5,116				5,186
General Steel (China) Tianwu Joint Venture [Member]
Sales:
Segment Reporting Information, Revenue for Reportable Segment	4,236		129,341		58,416		141,668
Gross profit:
Segment Reporting Gross Profit Loss	6		5,462		29		8,431
Income (loss) from operations:
Segment Reporting Income Loss From Operations	(695)		2,399		(2,293)		4,878
Net income (loss) attributable to General Steel Holdings, Inc.:
Segment Reporting Income Loss Net	(2,689)		(26)		(9,373)		(3,079)
Depreciation and amortization:
Depreciation, amortization and depletion	505		790		1,542		2,384
Finance/interest expenses:
Segment Reporting Finance Interest Expense	2,249		2,467		7,927		8,819
Capital expenditures:
Equipment purchase and intangible assets	0		15		3		18
ASSETS
Segment Reporting Assets	$ 178,844				$ 178,844				$ 152,965

[1] Reconciling item represents the unallocated income or expenses of the Company, arising from General Steel Investment Co., Ltd, Yangpu Shengtong Investment Co., Ltd and Qiu Steel for the three months and six months ended June 30, 2013 and 2012.

[2] Reconciling item represents assets held at General Steel Holdings, Inc., General Steel Investment Co., Ltd, Yangpu Shengtong Investment Co., Ltd and Qiu Steel as of September 30, 2013 and December 31, 2012.

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Intangible assets, net (Tables)

9 Months Ended

Sep. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets [Table Text Block]

Intangible assets consist of the following:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Land use rights	$	30,798	$	29,986
Mining right		2,448		2,384
Software		742		692
Subtotal		33,988		33,062
Less:
Accumulated amortization – land use rights		(8,387)		(7,577)
Accumulated amortization – mining right		(1,144)		(993)
Accumulated amortization – software		(529)		(426)
Subtotal		(10,060)		(8,996)
Intangible assets, net	$	23,928	$	24,066

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

The estimated aggregate amortization and depletion expenses for each of the five succeeding years is as follows:

	Estimated
	amortization and		Gross carrying
Year ending	depletion expenses		amount
	(in thousands)		(in thousands)
June 30, 2014	$	1,082		22,846
June 30, 2015		1,082		21,764
June 30, 2016		1,082		20,682
June 30, 2017		1,082		19,600
June 30, 2018		1,082		18,518
Thereafter		18,518		-
Total	$	23,928

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Plant and equipment, net (Details 2) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Machinery	$ 603,248	$ 587,334
Less: accumulated depreciation	(69,248)	(46,497)
Carrying value of leased assets	$ 534,000	$ 540,837

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Earnings (Loss) per share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Income (loss) attributable to holders of common stock	$ 3,801	$ (41,598)	$ (32,914)	$ (102,759)
Basic and diluted weighted average number of common shares outstanding	55,141	54,466	54,976	54,946
Earnings (loss) per share
Basic and diluted	$ 0.07	$ (0.76)	$ (0.60)	$ (1.87)

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Summary of significant accounting policies (Details 8) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012	Dec. 31, 2011
Derivative liabilities	$ 0	$ 1
Profit sharing liability	241,090	328,827
Total	241,090	328,828	303,243
Fair Value, Inputs, Level 1 [Member]
Derivative liabilities		0
Profit sharing liability	0	0
Total	0	0
Fair Value, Inputs, Level 2 [Member]
Derivative liabilities		1
Profit sharing liability	0	0
Total	0	1
Fair Value, Inputs, Level 3 [Member]
Derivative liabilities		0
Profit sharing liability	241,090	328,827
Total	$ 241,090	$ 328,827

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Summary of significant accounting policies (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Sales	$ 514,549	$ 518,542	$ 1,534,330	$ 1,441,325
Gross profit (loss)	8,231	(13,596)	(23,238)	20,078
Income (loss) from operations	30,395	(36,383)	25,175	(41,470)
Net income (loss) attributable to controlling interest	3,801	(41,598)	(32,914)	(102,759)
Variable Interest Entities and Subsidiary [Member]
Sales	606,444	708,974	1,903,933	2,126,556
Gross profit (loss)	8,122	(18,417)	(23,704)	12,628
Income (loss) from operations	32,967	(37,000)	32,998	(40,071)
Net income (loss) attributable to controlling interest	$ 8,284	$ (39,494)	$ (18,335)	$ (92,974)

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Segments (Tables)

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

The following represents results of division operations for three months ended September 30, 2013 and 2012:

(In thousands)
Sales:	2013		2012
Longmen Joint Venture	$	606,444	$	708,974
Maoming Hengda		252		1,134
Baotou Steel Pipe Joint Venture		2,921		1,322
General Steel (China) & Tianwu Joint Venture		4,236		129,341
Total sales		613,853		840,771
Interdivision sales		(3,758)		(129,346)
Consolidated sales	$	610,095	$	711,425

Gross profit (loss):	2013		2012
Longmen Joint Venture	$	8,122	$	(18,417)
Maoming Hengda		(57)		(761)
Baotou Steel		160		120
General Steel (China) & Tianwu Joint Venture		6		5,462
Total gross profit (loss)		8,231		(13,596)
Interdivision gross profit		-		-
Consolidated gross profit (loss)	$	8,231	$	(13,596)

Income (loss) from operations:	2013		2012
Longmen Joint Venture	$	32,967	$	(37,000)
Maoming Hengda		(719)		(1,062)
Baotou Steel		20		630
General Steel (China) & Tianwu Joint Venture		(695)		2,399
Total income (loss) from operations		31,572		(35,033)
Interdivision income (loss) from operations		-		-
Reconciling item (1)		(1,177)		(1,350)
Consolidated income (loss) from operations	$	30,395	$	(36,383)

Net income (loss) attributable to General Steel Holdings, Inc.:	2013		2012
Longmen Joint Venture	$	8,284	$	(39,494)
Maoming Hengda		(694)		(1,073)
Baotou Steel		16		403
General Steel (China) & Tianwu Joint Venture		(2,689)		(26)
Total net income (loss) attributable to General Steel Holdings, Inc.		4,917		(40,190)
Interdivision net income		-		-
Reconciling item (1)		(1,116)		(1,408)
Consolidated net income (loss) attributable to General Steel Holdings, Inc.	$	3,801	$	(41,598)

Depreciation, amortization and depletion:	2013		2012
Longmen Joint Venture	$	21,014	$	19,915
Maoming Hengda		307		451
Baotou Steel		62		52
General Steel (China) & Tianwu Joint Venture		505		790
Consolidated depreciation, amortization and depletion	$	21,888	$	21,208

Finance/interest expenses:	2013		2012
Longmen Joint Venture	$	23,252	$	33,989
Maoming Hengda		1		35
Baotou Steel		-		127
General Steel (China) & Tianwu Joint Venture		2,249		2,467
Interdivision interest expenses		-		-
Reconciling item (1)		1		(3)
Consolidated interest expenses	$	25,503	$	36,615

Capital expenditures:	2013		2012
Longmen Joint Venture	$	16,455	$	3,259
Maoming Hengda		-		23
Baotou Steel		-		1
General Steel (China) & Tianwu Joint Venture		-		15
Reconciling item (1)		-		-
Consolidated capital expenditures	$	16,455	$	3,298

The following represents results of division operations for nine months ended September 30, 2013 and 2012:

(In thousands)
Sales:	2013		2012
Longmen Joint Venture	$	1,903,933	$	2,126,556
Maoming Hengda		3,124		4,003
Baotou Steel Pipe Joint Venture		3,902		3,923
General Steel (China) & Tianwu Joint Venture		58,416		141,668
Total sales		1,969,375		2,276,150
Interdivision sales		(54,338)		(136,001)
Consolidated sales	$	1,915,037	$	2,140,149

Gross profit (loss):	2013		2012
Longmen Joint Venture	$	(23,704)	$	12,628
Maoming Hengda		188		(1,174)
Baotou Steel		249		193
General Steel (China) & Tianwu Joint Venture		29		8,431
Total gross profit (loss)		(23,238)		20,078
Interdivision gross profit		-		-
Consolidated gross profit (loss)	$	(23,238)	$	20,078

Income (loss) from operations:	2013		2012
Longmen Joint Venture	$	32,998	$	(40,071)
Maoming Hengda		(1,741)		(2,498)
Baotou Steel		(285)		224
General Steel (China) & Tianwu Joint Venture		(2,293)		4,878
Total income (loss) from operations		28,679		(37,467)
Interdivision income (loss) from operations		-		-
Reconciling item (1)		(3,504)		(4,003)
Consolidated income (loss) from operations	$	25,175	$	(41,470)

Net loss attributable to General Steel Holdings, Inc.:	2013		2012
Longmen Joint Venture	$	(18,335)	$	(92,974)
Maoming Hengda		(1,681)		(2,393)
Baotou Steel		(227)		(263)
General Steel (China) & Tianwu Joint Venture		(9,373)		(3,079)
Total net loss attributable to General Steel Holdings, Inc.		(29,616)		(98,709)
Interdivision net income		-		-
Reconciling item (1)		(3,298)		(4,050)
Consolidated net loss attributable to General Steel Holdings, Inc.	$	(32,914)	$	(102,759)

Depreciation, amortization and depletion:	2013		2012
Longmen Joint Venture	$	62,295	$	58,573
Maoming Hengda		933		1,447
Baotou Steel		185		134
General Steel (China) & Tianwu Joint Venture		1,542		2,384
Consolidated depreciation, amortization and depletion	$	64,955	$	62,538

Finance/interest expenses:	2013		2012
Longmen Joint Venture	$	73,424	$	129,683
Maoming Hengda		1		47
Baotou Steel		-		381
General Steel (China) & Tianwu Joint Venture		7,927		8,819
Interdivision interest expenses		-		-
Reconciling item (1)		3		(1)
Consolidated interest expenses	$	81,355	$	138,929

Capital expenditures:	2013		2012
Longmen Joint Venture	$	60,461	$	19,604
Maoming Hengda		2		38
Baotou Steel		8		6
General Steel (China) & Tianwu Joint Venture		3		18
Reconciling item (1)		-		-
Consolidated capital expenditures	$	60,474	$	19,666

Total Assets as of:	September 30, 2013		December 31, 2012
Longmen Joint Venture	$	2,537,952	$	2,513,206
Maoming Hengda		29,340		29,687
Baotou Steel Pipe Joint Venture		5,116		5,186
General Steel (China) & Tianwu Joint Venture		178,844		152,965
Interdivision assets		(84,880)		(57,436)
Reconciling item (2)		5,654		7,074
Total Assets	$	2,672,026	$	2,650,682

(1) Reconciling item represents the unallocated income or expenses of the Company, arising from General Steel Investment Co., Ltd, Yangpu Shengtong Investment Co., Ltd and Qiu Steel for the three and nine months ended September 30, 2013 and 2012.

(2) Reconciling item represents assets held at General Steel Holdings, Inc., General Steel Investment Co., Ltd, Yangpu Shengtong Investment Co., Ltd and Qiu Steel as of September 30, 2013 and December 31, 2012.

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CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $)	Sep. 30, 2013	Dec. 31, 2012
Preferred Stock, par or stated value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued	3,092,899	3,092,899
Preferred stock, shares outstanding	3,092,899	3,092,899
Common Stock, par or stated value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares, issued	57,771,038	57,269,838
Common stock, shares, outstanding	55,298,732	54,797,532
Treasury stock, shares	2,472,306	2,472,306

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Debt

9 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

Note 9 – Debt

Short-term notes payable

Short-term notes payable are lines of credit extended by banks. Banks in turn issue the Company a bank acceptance note, which can be endorsed and assigned to vendors as payments for purchases. The notes payable are generally payable within three to six months. This short-term note payable is guaranteed by the bank for its complete face value. The banks do not charge interest on these notes, but usually charge a transaction fee of 0.05% of the notes value. In addition, the banks usually require the Company to deposit either a certain amount of cash at the bank as a guarantee deposit, which is classified on the balance sheet as restricted cash, or provide notes receivable as security, which are classified on the balance sheet as restricted notes receivable. Restricted cash as a guarantee for the notes payable amounted to $405.8 million and $322.7 million as of September 30, 2013 and December 31, 2012, respectively. Restricted notes receivable as a guarantee for the notes payable amounted to $237.2 million and $345.8 million as of September 30, 2013 and December 31, 2012, respectively.

The Company had the following short-term notes payable as of:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
General Steel (China): Notes payable to various banks in China, due various dates from October 2013 to March 2014. Restricted cash required of $24.5 million and $6.3 million as of September 30, 2013 and December 31, 2012, respectively; guaranteed by third parties. These notes payable were either repaid or renewed subsequently on the due dates.	$	37,490	$	12,696
Longmen Joint Venture: Notes payable to various banks in China, due various dates from October 2013 to August 2014. $381.3 million restricted cash and $237.2 million notes receivable are secured for notes payable as of September 30, 2013, and comparatively $316.4 million restricted cash and $345.8 million notes receivable secured as of December 31, 2012, respectively; some notes are further guaranteed by third parties. These notes payable were either repaid or renewed subsequently on the due dates.		950,498		971,117
Total short-term notes payable	$	987,988	$	983,813

Short-term loans

Short-term loans represent amounts due to various banks, other companies and individuals, including related parties, normally due within one year. The principal of the loans are due at maturity but can be renewed at the bank’s option. Accrued interest is due either monthly or quarterly.

Short term loans due to banks, related parties and other parties consisted of the following as of:

Due to banks

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
General Steel (China): Loans from various banks in China, due various dates from December 2013 to September 2014. Weighted average interest rate was 7.2% per annum and 7.6% per annum as of September 30, 2013 and December 31, 2012, respectively; some are guaranteed by third parties while others are secured by equipment and inventory. These loans were either repaid or renewed subsequently on the due dates.	$	38,973	$	32,189
Longmen Joint Venture: Loans from various banks in China, due various dates from November 2013 to August 2014. Weighted average interest rate was 6.5% per annum and 6.8% per annum as of September 30, 2013 and December 31, 2012, respectively; some are guaranteed by third parties, restricted cash or notes receivables. $120.0 million and $76.0 million restricted notes receivable were secured for the loans as of September 30, 2013 and December 31, 2012, respectively; These loans were either repaid or renewed subsequently on the due dates.		215,956		114,935
Total short-term loans - bank	$	254,929	$	147,124

As of September 30, 2013 and December 31, 2012, the Company had not met its financial covenants stipulated by certain loan agreements related to the Company’s debt to asset ratio. Based on the financial covenants, the Company should have kept its debt to asset ratio below 20% and 85% as of September 30, 2013 and December 31, 2012, respectively. However, as of September 30, 2013 and December 31, 2012, the Company's debt to asset ratio was 117.7% and 116.4%, respectively.

Furthermore, the Company is a party to a loan agreement with a cross default clause whereby any breach of loan covenants will automatically result in default of the loan. The outstanding balance of the short term loans affected by the above breach of covenants and cross default as of September 30, 2013 and December 31, 2012 was $6.4 million and $12.7 million, respectively. According to the Company’s short term loan agreements, the banks have the rights to request for more collateral or additional guarantees if the breach of covenant is not remedied or request early repayment of the loan if the Company does not cure such breach within a certain period of time. As of the date of this report, the Company has not received any notice from the banks to request more collateral, additional guarantees or early repayment of the short term loans due to the breach of covenant.

Due to unrelated parties

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Longmen Joint Venture: Loans from various unrelated companies and individuals, due various dates from October 2013 to February 2014, and weighted average interest rate was 5.2% per annum and 6.0% per annum as of September 30, 2013 and December 31, 2012, respectively. These loans were either repaid or renewed subsequently on the due dates.	$	33,294	$	25,324
Longmen Joint Venture: Loans from financing sales.		90,680		115,966
Maoming Hengda: Loans from one unrelated parties and one related party, due on demand, none interest bearing.		6,196		6,033
Total short-term loans – others	$	130,170	$	147,323

The Company had various loans from unrelated companies amounting to $130.2 million and $147.3 million as of September 30, 2013 and December 31, 2012, respectively. Of the $130.2 million, $6.2 million loans carry no interest, $90.7 million of financing sales are subject to interest rates ranging between 4.2% and 5.9%, and the remaining $33.3 million are subject to interest rates ranging from 4.7% to 12.0%. All short term loans from unrelated companies are payable on demand and unsecured.

As part of its working capital management, Longmen Joint Venture has entered into a number of sale and purchase back contracts ("contracts") with third party companies and Yuxin and Yuteng. According to the contracts, Longmen Joint Venture sells rebar to the third party companies at a certain price, and within the same month, Yuxin and Yuteng will purchase back the rebar from the third party companies at a price of 4.2% to 5.9% higher than the original selling price from Longmen Joint Venture. Based on the contract terms, Longmen Joint Venture is paid in advance for the rebar sold to the third party companies and Yuxin and Yuteng are given a credit period of several months to one year from the third party companies. There is no physical movement of the inventory during the sale and purchase back arrangement. The margin of 4.2% to 5.9% is determined by reference to the bank loan interest rates at the time when the contracts are entered into, plus an estimated premium based on the financing sale amount, which represents the interest charged by the third party companies for financing Longmen Joint Venture through the above sale and purchase back arrangement. The revenue and cost of goods sold arising from the above transactions are eliminated and the incremental amounts paid by Yuxin and Yuteng to purchase back the goods are treated as financing costs in the unaudited condensed consolidated financial statements.

Total financing sales for the three months ended September 30, 2013 and 2012 amounted to $166.2 million and $307.1 million, respectively, and for the nine months ended September 30, 2013 and 2012, amounted to $519.5 million and $600.8 million, respectively, which are eliminated in the Company’s unaudited condensed consolidated financial statements. The financial cost related to financing sales for the three months ended September 30, 2013 and 2012, accounted to $1.1 million and $2.1 million, respectively, and for the nine months ended September 30, 2013 and 2012, amounted to $4.2 million and $6.8 million, respectively.

Short term loans due to related parties

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Baotou Steel: Loans from Tianjin Hengying Trading Co., Ltd, due on demand, and interest rates is 10% per annum.	$	3,430	$	4,133
General Steel China: Loans from Tianjin Hengying Trading Co., Ltd., due on demand, and interest rates is 10% per annum.		-		15,416
General Steel China: Loans from Tianjin Dazhan Industry Co, Ltd., due on demand, and interest rates is 10% per annum.		-		21,397
General Steel China:Loans from Beijing Shenhua Xinyuan Metal Materials Co., Ltd., due on demand, and interest rates is 10% per annum.		1,395		1,359
General Steel China: Loans from Yangpu Capital Automobile, due on demand, and interest rates is 10% per annum.		1,451		1,413
Longmen Joint Venture: Loan from Shaanxi Coal and Chemical Industry Group Co., Ltd., due in December 2013, and interest rate is 7.0% per annum.		33,580		-
Longmen Joint Venture: Loans from financing sales.		9,033		35,839
Total short-term loans - related parties	$	48,889	$	79,557

Long-term loans due to related party

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Longmen Joint Venture: Loans from Shaanxi Steel Group, due on various dates through November 2015 and interest rate are 5.6% - 5.9% per annum.	$	72,346	$	92,973
Less: Current maturities of long-term loans – related party		(47,896)		(54,885)
Long-term loans - related party	$	24,450	$	38,088

Total interest expense, net of capitalized interest, amounted to $15.5 million and $36.6 million for the three months ended September 30, 2013 and 2012, respectively.

Total interest expense, net of capitalized interest, amounted to $54.5 million and $138.9 million for the nine months ended September 30, 2013 and 2012, respectively.

Capitalized interest amounted to $1.3 million and $0.2 million for the three months ended September 30, 2013 and 2012, respectively.

Capitalized interest amounted to $2.1 million and $0.6 million for the nine months ended September 30, 2013 and 2012, respectively. 

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (43,853)	$ (164,095)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Depreciation, amortization and depletion	64,955	62,538
Change in fair value of derivative liabilities	(1)	48
Gain on disposal of equipment	(113)	(177)
Provision for doubtful accounts	(251)	2,316
Reservation of mine maintenance fee	315	3
Stock issued for services and compensation	692	679
Amortization of deferred financing cost on capital lease	27,778	32,363
Income from equity investments	(137)	(80)
Foreign currency transaction gain	(448)	1,169
Deferred tax assets	0	169
Deferred lease income	(1,613)	(1,588)
Change in fair value of profit sharing liability	(107,877)	0
Changes in operating assets and liabilities
Notes receivable	32,138	(99,337)
Accounts receivable	(483)	5,429
Accounts receivable - related parties	11,968	(7,607)
Other receivables	(3,466)	(5,460)
Other receivables - related parties	(55,744)	4,784
Inventories	4,191	73,024
Advances on inventory purchases	1,996	(23,365)
Advances on inventory purchases - related parties	(27,882)	(88,412)
Prepaid expense and other	(1,016)	(183)
Long-term deferred expense	373	119
Prepaid taxes	8,250	4,168
Accounts payable	113,592	(48,059)
Accounts payable - related parties	54,364	31,353
Other payables and accrued liabilities	(3,742)	34,286
Other payables - related parties	(12,844)	95,746
Customer deposits	(33,185)	(9,490)
Customer deposits - related parties	(7,981)	14,740
Taxes payable	(7,317)	(5,195)
Other noncurrent liabilities	1,384	0
Net cash provided by (used in) operating activities	14,043	(90,114)
CASH FLOWS FROM INVESTING ACTIVITIES:
Restricted cash	(72,676)	(35,094)
Loans to related parties	1,460	(69,247)
Cash proceeds from (made to) short term investment	(80)	40
Cash proceeds from sales of equipment	16	19
Equipment purchase and intangible assets	(75,326)	(15,909)
Effect on cash due to deconsolidating of a subsidiary	0	(2,972)
Net cash used in investing activities	(146,606)	(123,163)
CASH FLOWS FINANCING ACTIVITIES:
Capital contributed by noncontrolling interest	18,028	0
Payments made for treasury stock acquired	0	(1,404)
Notes receivable - restricted	10,218	521,866
Borrowings on short term notes payable	1,348,631	1,382,976
Payments on short term notes payable	(1,370,832)	(1,637,570)
Borrowings on short term loans - bank	258,357	237,535
Payments on short term loans - bank	(155,390)	(355,008)
Borrowings on short term loan - others	148,678	160,554
Payments on short term loans - others	(169,558)	(193,964)
Borrowings on short term loan - related parties	362,202	269,362
Payments on short term loans - related parties	(274,718)	(221,134)
Deposits due to sales representatives	(6,521)	11,939
Deposit due to sales representatives - related parties	531	285
Payments on current maturities of long-term loans - related party	(22,856)	0
Net cash provided by financing activities	146,770	175,437
EFFECTS OF EXCHANGE RATE CHANGE IN CASH	1,417	1,426
INCREASE (DECREASE) IN CASH	15,624	(36,414)
CASH, beginning of period	46,467	120,016
CASH, end of period	$ 62,091	$ 83,602

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Summary of significant accounting policies (Details 11) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
General Steel (China) [Member]
Original Cost	$ 3,867
Expires on	2050 & 2053
Longmen Joint Venture [Member]
Original Cost	24,226
Expires on	2048 & 2052
Maoming Hengda [Member]
Original Cost	$ 2,705
Expires on	2054

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
ASSETS
Cash	$ 62,091	$ 46,467
Restricted cash	405,781	323,420
Notes receivable	116,900	145,502
Restricted notes receivable	357,250	357,900
Loans receivable - related parties	4,540	69,319
Accounts receivable, net	8,577	6,695
Accounts receivable - related parties	3,252	14,966
Other receivables, net	56,494	8,407
Other receivables - related parties	51,501	68,382
Inventories	177,383	212,671
Advances on inventory purchase	79,855	79,715
Advances on inventory purchase - related parties	29,667	46,416
Prepaid expense and other	1,490	450
Prepaid taxes	16,415	24,116
Short-term investment	2,771	2,619
TOTAL CURRENT ASSETS	1,373,967	1,407,045
PLANT AND EQUIPMENT, net	1,250,542	1,167,836
OTHER ASSETS:
Advances on equipment purchase	21,715	6,499
Long-term other receivable	0	43,008
Investment in unconsolidated entities	1,161	1,166
Long-term deferred expense	713	1,062
Intangible assets, net of accumulated amortization	23,928	24,066
TOTAL OTHER ASSETS	47,517	75,801
TOTAL ASSETS	2,672,026	2,650,682
LIABILITIES AND DEFICIENCY
Short term notes payable	987,988	983,813
Accounts payable	495,488	352,052
Accounts payable - related parties	172,259	177,432
Short term loans - bank	254,929	147,124
Short term loans - others	130,170	147,323
Short term loans - related parties	48,889	79,557
Current maturities of long-term loans - related party	47,896	54,885
Other payables and accrued liabilities	52,272	54,589
Other payable - related parties	106,153	73,025
Customer deposits	95,695	125,890
Customer deposits - related parties	14,512	21,998
Deposit due to sales representatives	28,184	33,870
Deposit due to sales representatives - related parties	1,809	1,238
Taxes payable	9,716	16,674
Deferred lease income, current	2,178	2,120
TOTAL CURRENT LIABILITIES	2,448,138	2,271,590
NON-CURRENT LIABILITIES:
Long-term loans - related party	24,450	38,088
Long-term other payable - related party	0	43,008
Deferred lease income, noncurrent	75,480	75,079
Capital lease obligations	354,576	330,099
Profit sharing liability	241,090	328,827
Other noncurrent liabilities	1,402	0
TOTAL NON-CURRENT LIABILITIES	696,998	815,101
TOTAL LIABILITIES	3,145,136	3,086,691
COMMITMENTS AND CONTINGENCIES
DEFICIENCY:
Preferred stock, $0.001 par value, 50,000,000 shares authorized, 3,092,899 shares issued and outstanding as of September 30, 2013 and December 31, 2012	3	3
Common stock, $0.001 par value, 200,000,000 shares authorized, 57,771,038 and 57,269,838 shares issued, 55,298,732 and 54,797,532 shares outstanding as of September 30, 2013 and December 31, 2012, respectively	58	57
Treasury stock, at cost, 2,472,306 shares as of September 30, 2013 and December 31, 2012	(4,199)	(4,199)
Paid-in-capital	106,405	105,714
Statutory reserves	6,263	6,076
Accumulated deficits	(414,696)	(381,782)
Accumulated other comprehensive income	2,471	10,185
TOTAL GENERAL STEEL HOLDINGS, INC. DEFICIENCY	(303,695)	(263,946)
NONCONTROLLING INTERESTS	(169,415)	(172,063)
TOTAL DEFICIENCY	(473,110)	(436,009)
TOTAL LIABILITIES AND DEFICIENCY	$ 2,672,026	$ 2,650,682

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Summary of significant accounting policies (Details 4) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Amount of Line of Credit	$ 110.8
Bank Of China [Member]
Amount of Line of Credit	6.5
Repayment Date	August 25, 2014 to October 26, 2014
China Everbright Bank [Member]
Amount of Line of Credit	48.9
Repayment Date	Oct. 08, 2014
Bank Of Xian [Member]
Amount of Line of Credit	32.6
Repayment Date	Oct. 09, 2014
Bank Of Jinzhou [Member]
Amount of Line of Credit	$ 22.8
Repayment Date	September 27, 2014*	[1]

[1] Management expects the line of credit will be extended after September 27, 2014.

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Debt (Details 4) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Current maturities of long-term loans - related party	$ 47,896	$ 54,885
Long-term loans - related party	24,450	38,088
Longmen Joint Venture Loans from Shaanxi Steel Group [Member]
Current maturities of long-term loans - related party	$ 72,346	$ 92,973

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Debt (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Short term notes payable	$ 987,988	$ 983,813
General Steel China Notes Payable To China Agricultural Bank [Member]
Short term notes payable	37,490	12,696
Longmen Joint Venture Notes Payable To Various Banks In China [Member]
Short term notes payable	$ 950,498	$ 971,117

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Commitment and contingencies

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Note 24 – Commitment and contingencies

Operating Lease Commitments

Total operating lease commitments for rental of offices, buildings, equipment and land use rights of the Company’s PRC subsidiaries as of September 30, 2013 is as follows:

Year ending September 30,	Minimum lease payment
	(in thousands)
	(Unaudited)
2014	$	1,445
2015		680
2016		559
2017		559
2018		559
Years after		20,185
Total minimum payments required	$	23,987

Total rental expense was $0.8 million and $0.8 million for the three months ended September 30, 2013 and 2012, respectively, and $2.4 million and $2.4 million for the nine months ended September 30, 2013 and 2012, respectively.

Contractual Commitments

Longmen Joint Venture has $211.6 million contractual obligations related to construction projects as of September 30, 2013 estimated to be fulfilled between November 2013 and September 2014.

Contingencies

As of September 30, 2013, Longmen Joint Venture provided guarantees to related parties’ and third parties’ bank loans, including lines of credit and others, amounting to $304.6 million.

	Guarantee
Nature of guarantee	amount		Guaranty Due Date
	(In thousands)
Line of credit	$	178,931	Various from October 2013 to August 2015
Three-party financing agreements		42,315	Various from October 2013 to January 2014
Confirming storage		19,951	Various from December 2013 to September 2014
Financing by the rights of goods delivery in future		63,374	Various from December 2013 to March 2015
Total	$	304,571

	Guarantee
Name of parties being guaranteed	amount		Guaranty Due Date
	(In thousands)
Long Steel Group	$	74,819	Various from October 2013 to August 2015
Hancheng Haiyan Coking Co., Ltd		42,315	Various from October 2013 to January 2014
Long Steel Group Fuping Rolling Steel Co., Ltd		11,271	Various from January to June 2014
Yichang Zhongyi Industrial Co., Ltd		25,428	June 2014
Xi’an Laisheng Logistics Co., Ltd		4,303	May 2014
Xi'an Kaiyuan Steel Sales Co., Ltd		3,733	Various from November 2013 to January 2014
Shaanxi Hongan Material Co., Ltd.		5,379	Various from October to December 2013
Shaanxi Anlin Logistics Co., Ltd		7,726	Various from December 2013 to April 2014
Chengdu Zhongyi Steel Co., Ltd		3,977	December 2013
Shaanxi Huatai Huineng Group Co., Ltd		24,450	March 2014
Hancheng Sanli Furnace Burden Co., Ltd.		16,300	March 2015
Tianjin Dazhan Industry Co., Ltd		44,238	Various from January 2014 to March 2015
Tianjin Hengying Trading Co., Ltd		19,637	Various from January to July 2014
Tianjin Qiu Steel Pipe Industry Co., Ltd		11,410	April 2014
Jinmen Desheng Metallurty Co., Ltd		3,260	August 2014
Shaanxi Baolong Industry Co., Ltd		2,347	November 2013
Shaanxi Longan Industrial Development Co., Ltd		3,978	November 2013
Total	$	304,571

As of September 30, 2013, the Company did not accrue any liability for the amounts the Group has guaranteed for third and related parties because those parties are current in their payment obligations and the Company has not experienced any losses from providing guarantees. The Company has evaluated the debt guarantees and concluded that the likelihood of having to make payments under the guarantees is remote and that the fair value of the stand-ready obligation under these commitments is not material.

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Taxes

9 Months Ended

Sep. 30, 2013

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 18 – Taxes

Income tax

Significant components of the provision for income taxes on earnings and deferred taxes on net operating losses from operations for the three months ended September 30, 2013 and 2012 are as follows:

	For the three months ended		For the three months ended
(In thousands)	September 30, 2013		September 30, 2012
Current	$	25	$	100
Deferred		-		-
Total provision for income taxes	$	25	$	100

	For the nine months ended		For the nine months ended
(In thousands)	September 30, 2013		September 30, 2012
Current	$	201	$	510
Deferred		-		169
Total provision (benefit) for income taxes	$	201	$	679

Under the Income Tax Laws of the PRC, General Steel (China), Baotou Steel Pipe Joint Venture (located in Inner Mongolia province), Maoming Hengda (located in Guangdong province) and Tianwu Joint Venture (located in Tianjin Port Free Trade Zone) are subject to income tax at a rate of 25%.

Longmen Joint Venture is located in the Mid-West region of China and as such, qualifies for the “Go-West” tax rate of 15% promulgated by the government. In 2010, the Chinese government announced that the “Go-West” tax initiative would be extended for 10 years, and thus, the preferential tax rate of 15% will be in effect until 2020. This special tax treatment for Longmen Joint Venture will be evaluated on a year-to-year basis by the local tax bureau.

Deferred taxes assets – China

According to Chinese tax regulations, net operating losses can be carried forward to offset operating income for the next five years. The Group’s losses carried forward of $436.9 million will begin to expire in 2014. The Chinese government recently announced several policies to curb the real estate price increases across the country which led to a slowdown in demand for construction steel products. Additionally due to the continued global economic slowdown and the overcapacity issues in China's steel market, management expected there would be a sustained increase in margin pressure in the next five years until all the existing but outdated steel capacity across the whole industry are eliminated. Management took into consideration this potential negative impact on average selling price and gross margin of its products, re-performed an operating forecast for the next five years and concluded that the beginning-of-the-year balance of deferred tax assets mainly relating to the net operating loss carry forward may not be fully realizable due to the reduction in the projection of income to be available in the next 5 years. Management therefore decided to provide 100% valuation allowance for the deferred tax assets. The valuation allowance as of September 30, 2013 and December 31, 2012 was $86.9 million and $72.9 million, respectively. Management will review this valuation allowance periodically and make adjustments as warranted. Temporary differences, representing tax and book differences in various items, such as receivable allowances, inventory allowances, impairments on fixed assets and deferred lease income.

Movement of valuation allowance:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Beginning balance	$	72,891	$	47,703
Current period addition		12,776		25,180
Current period reversal		(857)		-
Deconsolidation of Tongxing		-		(216)
Exchange difference		2,125		224
Ending balance	$	86,935	$	72,891

Deferred taxes assets – U.S.

General Steel Holdings, Inc. was incorporated in the United States and has incurred net operating losses for income tax purposes for the nine months ended September 30, 2013. The net operating loss carry forwards for United States income taxes amounted to $1.6 million, which may be available to reduce future years’ taxable income. These carry forwards will expire, if not utilized, starting from 2026 through 2032. Management believes that the realization of the benefits from these losses appears uncertain due to the Company’s limited operating history and continuing losses for United States income tax purposes. Accordingly, the Company has provided a 100% valuation allowance on the deferred tax asset benefit to reduce the asset to zero. The valuation allowance as of September 30, 2013 was $0.5 million. The net change in the valuation allowance for the nine months ended September 30, 2013 was $0. Management will review this valuation allowance periodically and make adjustments as warranted.

The Company has cumulative proportionate retained earnings from profitable subsidiaries of approximately $0.1 million as of September 30, 2013. Accordingly, no provision has been made for U.S. deferred taxes related to future repatriation of these earnings, nor is it practicable to estimate the amount of income taxes that would have to be provided if we concluded that such earnings will be remitted in the future.

Value added tax

Enterprises or individuals who sell commodities, engage in repair and maintenance or import and export goods in the PRC are subject to a value added tax in accordance with PRC laws. The value added tax (“VAT”) standard rates are 13% to 17% of the gross sales price. A credit is available whereby VAT paid on the purchases of semi-finished products or raw materials used in the production of the Company’s finished products can be used to offset the VAT due on sales of the finished product. As of September 30, 2013 and December 31, 2012, the Company had $3.1 million and $4.2 million in value added tax credit which are available to offset future VAT payables, respectively.

Sales and purchases are recorded net of VAT collected and paid as the Company acts as an agent for the government for VAT collection. VAT on sales and VAT on purchases amounted to $160.5 million and $156.2 million, respectively, for the three months ended September 30, 2013 and $209.7 million and $206.7 million, respectively, for the three months ended September 30, 2012. VAT on sales and VAT on purchases amounted to $513.7 million and $494.4 million, respectively, for the nine months ended September 30, 2013, $620.6 million and $594.1 million, respectively, for the nine months ended September 30, 2012. 

Taxes payable consisted of the following: 

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
VAT taxes payable	$	7,309	$	13,579
Income taxes payable		20		68
Misc. taxes		2,387		3,027
Totals	$	9,716	$	16,674

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Related party transactions and balances (Details 6) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Dec. 31, 2012
Advances on inventory purchase - related parties	$ 29,667	$ 29,667	$ 46,416
Long Steel Group [Member]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture	Noncontrolling shareholder of Longmen Joint Venture
Advances on inventory purchase - related parties	1,377	1,377	1,367
Tianjin Dazhan Industry Co Ltd [Member]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Advances on inventory purchase - related parties	6,254	6,254	0
Tianjin Hengying Trading Co Ltd [Member]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Advances on inventory purchase - related parties	12,805	12,805	0
Tianjin General Qiugang Pipe Co Ltd [Member]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Advances on inventory purchase - related parties	9,210	9,210	41,316
Maoming Shengze Trading Co Ltd [Member]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Advances on inventory purchase - related parties	0	0	3,733
Others [Member]
Related Party Relationship	Entities either owned or have significant influence by our affiliates or management	Entities either owned or have significant influence by our affiliates or management
Advances on inventory purchase - related parties	$ 21	$ 21	$ 0

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Commitment and contingencies (Tables)

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

Total operating lease commitments for rental of offices, buildings, equipment and land use rights of the Company’s PRC subsidiaries as of September 30, 2013 is as follows:

Year ending September 30,	Minimum lease payment
	(in thousands)
	(Unaudited)
2014	$	1,445
2015		680
2016		559
2017		559
2018		559
Years after		20,185
Total minimum payments required	$	23,987

Schedule of Guarantor Obligations [Table Text Block]

As of September 30, 2013, Longmen Joint Venture provided guarantees to related parties’ and third parties’ bank loans, including lines of credit and others, amounting to $304.6 million.

	Guarantee
Nature of guarantee	amount		Guaranty Due Date
	(In thousands)
Line of credit	$	178,931	Various from October 2013 to August 2015
Three-party financing agreements		42,315	Various from October 2013 to January 2014
Confirming storage		19,951	Various from December 2013 to September 2014
Financing by the rights of goods delivery in future		63,374	Various from December 2013 to March 2015
Total	$	304,571

Schedule Of Parties Being Guaranteed [Table Text Block]

	Guarantee
Name of parties being guaranteed	amount		Guaranty Due Date
	(In thousands)
Long Steel Group	$	74,819	Various from October 2013 to August 2015
Hancheng Haiyan Coking Co., Ltd		42,315	Various from October 2013 to January 2014
Long Steel Group Fuping Rolling Steel Co., Ltd		11,271	Various from January to June 2014
Yichang Zhongyi Industrial Co., Ltd		25,428	June 2014
Xi’an Laisheng Logistics Co., Ltd		4,303	May 2014
Xi'an Kaiyuan Steel Sales Co., Ltd		3,733	Various from November 2013 to January 2014
Shaanxi Hongan Material Co., Ltd.		5,379	Various from October to December 2013
Shaanxi Anlin Logistics Co., Ltd		7,726	Various from December 2013 to April 2014
Chengdu Zhongyi Steel Co., Ltd		3,977	December 2013
Shaanxi Huatai Huineng Group Co., Ltd		24,450	March 2014
Hancheng Sanli Furnace Burden Co., Ltd.		16,300	March 2015
Tianjin Dazhan Industry Co., Ltd		44,238	Various from January 2014 to March 2015
Tianjin Hengying Trading Co., Ltd		19,637	Various from January to July 2014
Tianjin Qiu Steel Pipe Industry Co., Ltd		11,410	April 2014
Jinmen Desheng Metallurty Co., Ltd		3,260	August 2014
Shaanxi Baolong Industry Co., Ltd		2,347	November 2013
Shaanxi Longan Industrial Development Co., Ltd		3,978	November 2013
Total	$	304,571

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Debt (Details 2) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Short term loans - others	$ 130,170	$ 147,323
Longmen Joint Venture Loans from various unrelated companies and individuals [Member]
Short term loans - others	33,294	25,324
Longmen Joint Venture Loans from financing sales [Member]
Short term loans - others	90,680	115,966
Maoming Hengda Loans from one unrelated parties and one related party [Member]
Short term loans - others	$ 6,196	$ 6,033

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Commitment and contingencies (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013
2014	$ 1,445
2015	680
2016	559
2017	559
2018	559
Years after	20,185
Total minimum payments required	$ 23,987

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Summary of significant accounting policies (Details 7) (Scenario, Forecast [Member], USD $) In Millions, unless otherwise specified	12 Months Ended
	Sep. 30, 2014
Scenario, Forecast [Member]
Current liabilities over current assets (excluding non-cash items) as of September 30, 2013 (unaudited)	$ (1,072.0)
Projected cash financing and outflows:
Cash provided by line of credit from banks	110.8
Cash provided by vendor financing	815.0
Cash provided by financing sales	81.5
Cash provided by other financing	77.4
Cash provided by sales representatives	30.0
Cash projected to be used in operations in the twelve months ended September 30, 2014	(28.6)
Net projected change in cash for the twelve months ended September 30, 2014	$ 14.1

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Inventories (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012	Dec. 31, 2011
Supplies	$ 23,302	$ 23,123
Raw materials	138,951	141,503
Finished goods	22,527	57,630
Less: allowance for inventory valuation	(7,397)	(9,585)	(38,143)
Total inventories	$ 177,383	$ 212,671

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Convertible notes and derivative liabilities (Tables)

9 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

Fair Value, by Balance Sheet Grouping [Table Text Block]

The fair value of the warrants as of December 31, 2012 was calculated using the Cox Rubenstein Binomial model based on the following variables:

	December 31, 2012
Expected volatility		86	%
Expected dividend yield		0	%
Risk-free interest rate		0.08	%
Expected lives		0.36 years
Market price	$	0.99
Strike price	$	5.00

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

The Company has the following warrants outstanding:

Outstanding as of December 31, 2011	6,678,649
Granted	-
Forfeited / expired	(2,777,778)
Exercised	-
Outstanding as of December 31, 2012	3,900,871
Granted	-
Forfeited / expired	(3,900,871)
Exercised	-
Outstanding as of September 30, 2013	-

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Inventories (Tables)

9 Months Ended

Sep. 30, 2013

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

Inventories consist of the following:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Supplies	$	23,302	$	23,123
Raw materials		138,951		141,503
Finished goods		22,527		57,630
Less: allowance for inventory valuation		(7,397)		(9,585)
Total inventories	$	177,383	$	212,671

Summary Of Inventory Valuation Allowance [Table Text Block]

Movement of allowance for inventory valuation is as follows:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Beginning balance	$	9,585	$	38,143
Addition		7,305		9,582
Less: write-off		(9,722)		(38,519)
Exchange rate effect		229		379
Ending balance	$	7,397	$	9,585

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Plant and equipment, net (Tables)

9 Months Ended

Sep. 30, 2013

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

Plant and equipment consist of the following:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Buildings and improvements	$	253,621	$	214,661
Machinery		616,813		573,572
Machinery under capital lease		603,248		587,334
Transportation and other equipment		22,085		20,274
Construction in progress		58,111		4,645
Subtotal		1,553,878		1,400,486
Less: accumulated depreciation		(303,336)		(232,650)
Total	$	1,250,542	$	1,167,836

Schedule Of Construction In Progress [Table Text Block]

Construction in progress consisted of the following as of September 30, 2013:

Construction in progress	Value		Completion
description	(In thousands)		date
1.2 million tons high-strength steel production line		32,268		December 2013
Iron-making system dust removing equipment		3,307		November 2013
Drainage system		499		November 2013
Factory wall repair		241		November 2013
Gas pipe repair		121		November 2013
Office buildings		1,336		November 2013
Equipment updates		7,381		November 2013
#5 blast furnace construction		208		September 2014
Reconstruction of miscellaneous factory buildings		690		January 2014
Project materials		2,154
Others		9,906
Total	$	58,111

Schedule of Capital Leased Assets [Table Text Block]

The carrying value of assets acquired under the capital lease consists of the following:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Machinery	$	603,248	$	587,334
Less: accumulated depreciation		(69,248)		(46,497)
Carrying value of leased assets	$	534,000	$	540,837

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Intangible assets, net

9 Months Ended

Sep. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets Disclosure [Text Block]

Note 8 – Intangible assets, net

Intangible assets consist of the following:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Land use rights	$	30,798	$	29,986
Mining right		2,448		2,384
Software		742		692
Subtotal		33,988		33,062
Less:
Accumulated amortization – land use rights		(8,387)		(7,577)
Accumulated amortization – mining right		(1,144)		(993)
Accumulated amortization – software		(529)		(426)
Subtotal		(10,060)		(8,996)
Intangible assets, net	$	23,928	$	24,066

The gross amount of the intangible assets amounted to $34.0 million and $33.1 million as of September 30, 2013 and December 31, 2012, respectively. The remaining weighted average amortization period is 33.7 years as of September 30, 2013.

Total amortization expense for the three months ended September 30, 2013 and 2012 amounted to $0.2 million and $0.3 million, respectively, and for the nine months ended September 30, 2013 and 2012, amounted to $0.7 million and $0.9 million, respectively.

Total depletion expense for the three months ended September 30, 2013 and 2012 amounted to $0.02 million and $0.1 million, respectively, and for the nine months ended September 30, 2013 and 2012, amounted to $0.1 million and $0.2 million, respectively.

The estimated aggregate amortization and depletion expenses for each of the five succeeding years is as follows:

	Estimated
	amortization and		Gross carrying
Year ending	depletion expenses		amount
	(in thousands)		(in thousands)
June 30, 2014	$	1,082		22,846
June 30, 2015		1,082		21,764
June 30, 2016		1,082		20,682
June 30, 2017		1,082		19,600
June 30, 2018		1,082		18,518
Thereafter		18,518		-
Total	$	23,928

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Loans receivable - related parties (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Interest Income Related Party	$ 0.1	$ 0	$ 0.2	$ 1.8
Teamlink Investment Co Ltd [Member]
Loans Receivable Maturity Date			December 2013, June 2014, and July 2014
Loans Receivable Interest Rate Stated Percentage	4.75%		4.75%

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Capital lease obligation (Details Textual) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended			12 Months Ended
	Sep. 30, 2013 USD ($)	Sep. 30, 2012 USD ($)	Sep. 30, 2013 USD ($)	Sep. 30, 2012 USD ($)	Sep. 30, 2013 Shaanxi Iron and Steel Group [Member]	Dec. 31, 2011 Shaanxi Iron and Steel Group [Member] USD ($)	Dec. 31, 2011 Shaanxi Iron and Steel Group [Member] CNY
Capital Lease Agreement Term						20 years	20 years
Classification Of Lease, Percentage Base						75.00%	75.00%
Unified Management Agreement, Percentage Of Pretax Profit					40.00%	40.00%	40.00%
Unified Management Agreement, Cost Of Asset						$ 2.3	14.6
Interest Expense On Minimum Lease Payments	5.1	5.1	15.3	15.5
Interest Expense On Profit Sharing Liability	$ 2.6	$ 5.6	$ 12.4	$ 16.9

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Segments

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Note 25 – Segments

The Company’s chief operating decision maker evaluates performance and determines resource allocations based on a number of factors, the primary measure being income from operations of the Group’s four regional divisions in the PRC: Longmen Joint Venture in Shaanxi province, Maoming Hengda in Guangdong province, Baotou Steel Pipe Joint Venture in Inner Mongolia province and General Steel (China) & Tianwu Joint Venture in Tianjin City.

The Group operates in one business segment that includes four different divisions. These reportable divisions are consistent with the way the Company manages its business, each division operates under separate management groups and produces discrete financial information. The accounting principles applied at the operating division level in determining income from operations is generally the same as those applied at the consolidated financial statement level.

The following represents results of division operations for three months ended September 30, 2013 and 2012:

(In thousands)
Sales:	2013		2012
Longmen Joint Venture	$	606,444	$	708,974
Maoming Hengda		252		1,134
Baotou Steel Pipe Joint Venture		2,921		1,322
General Steel (China) & Tianwu Joint Venture		4,236		129,341
Total sales		613,853		840,771
Interdivision sales		(3,758)		(129,346)
Consolidated sales	$	610,095	$	711,425

Gross profit (loss):	2013		2012
Longmen Joint Venture	$	8,122	$	(18,417)
Maoming Hengda		(57)		(761)
Baotou Steel		160		120
General Steel (China) & Tianwu Joint Venture		6		5,462
Total gross profit (loss)		8,231		(13,596)
Interdivision gross profit		-		-
Consolidated gross profit (loss)	$	8,231	$	(13,596)

Income (loss) from operations:	2013		2012
Longmen Joint Venture	$	32,967	$	(37,000)
Maoming Hengda		(719)		(1,062)
Baotou Steel		20		630
General Steel (China) & Tianwu Joint Venture		(695)		2,399
Total income (loss) from operations		31,572		(35,033)
Interdivision income (loss) from operations		-		-
Reconciling item (1)		(1,177)		(1,350)
Consolidated income (loss) from operations	$	30,395	$	(36,383)

Net income (loss) attributable to General Steel Holdings, Inc.:	2013		2012
Longmen Joint Venture	$	8,284	$	(39,494)
Maoming Hengda		(694)		(1,073)
Baotou Steel		16		403
General Steel (China) & Tianwu Joint Venture		(2,689)		(26)
Total net income (loss) attributable to General Steel Holdings, Inc.		4,917		(40,190)
Interdivision net income		-		-
Reconciling item (1)		(1,116)		(1,408)
Consolidated net income (loss) attributable to General Steel Holdings, Inc.	$	3,801	$	(41,598)

Depreciation, amortization and depletion:	2013		2012
Longmen Joint Venture	$	21,014	$	19,915
Maoming Hengda		307		451
Baotou Steel		62		52
General Steel (China) & Tianwu Joint Venture		505		790
Consolidated depreciation, amortization and depletion	$	21,888	$	21,208

Finance/interest expenses:	2013		2012
Longmen Joint Venture	$	23,252	$	33,989
Maoming Hengda		1		35
Baotou Steel		-		127
General Steel (China) & Tianwu Joint Venture		2,249		2,467
Interdivision interest expenses		-		-
Reconciling item (1)		1		(3)
Consolidated interest expenses	$	25,503	$	36,615

Capital expenditures:	2013		2012
Longmen Joint Venture	$	16,455	$	3,259
Maoming Hengda		-		23
Baotou Steel		-		1
General Steel (China) & Tianwu Joint Venture		-		15
Reconciling item (1)		-		-
Consolidated capital expenditures	$	16,455	$	3,298

The following represents results of division operations for nine months ended September 30, 2013 and 2012:

(In thousands)
Sales:	2013		2012
Longmen Joint Venture	$	1,903,933	$	2,126,556
Maoming Hengda		3,124		4,003
Baotou Steel Pipe Joint Venture		3,902		3,923
General Steel (China) & Tianwu Joint Venture		58,416		141,668
Total sales		1,969,375		2,276,150
Interdivision sales		(54,338)		(136,001)
Consolidated sales	$	1,915,037	$	2,140,149

Gross profit (loss):	2013		2012
Longmen Joint Venture	$	(23,704)	$	12,628
Maoming Hengda		188		(1,174)
Baotou Steel		249		193
General Steel (China) & Tianwu Joint Venture		29		8,431
Total gross profit (loss)		(23,238)		20,078
Interdivision gross profit		-		-
Consolidated gross profit (loss)	$	(23,238)	$	20,078

Income (loss) from operations:	2013		2012
Longmen Joint Venture	$	32,998	$	(40,071)
Maoming Hengda		(1,741)		(2,498)
Baotou Steel		(285)		224
General Steel (China) & Tianwu Joint Venture		(2,293)		4,878
Total income (loss) from operations		28,679		(37,467)
Interdivision income (loss) from operations		-		-
Reconciling item (1)		(3,504)		(4,003)
Consolidated income (loss) from operations	$	25,175	$	(41,470)

Net loss attributable to General Steel Holdings, Inc.:	2013		2012
Longmen Joint Venture	$	(18,335)	$	(92,974)
Maoming Hengda		(1,681)		(2,393)
Baotou Steel		(227)		(263)
General Steel (China) & Tianwu Joint Venture		(9,373)		(3,079)
Total net loss attributable to General Steel Holdings, Inc.		(29,616)		(98,709)
Interdivision net income		-		-
Reconciling item (1)		(3,298)		(4,050)
Consolidated net loss attributable to General Steel Holdings, Inc.	$	(32,914)	$	(102,759)

Depreciation, amortization and depletion:	2013		2012
Longmen Joint Venture	$	62,295	$	58,573
Maoming Hengda		933		1,447
Baotou Steel		185		134
General Steel (China) & Tianwu Joint Venture		1,542		2,384
Consolidated depreciation, amortization and depletion	$	64,955	$	62,538

Finance/interest expenses:	2013		2012
Longmen Joint Venture	$	73,424	$	129,683
Maoming Hengda		1		47
Baotou Steel		-		381
General Steel (China) & Tianwu Joint Venture		7,927		8,819
Interdivision interest expenses		-		-
Reconciling item (1)		3		(1)
Consolidated interest expenses	$	81,355	$	138,929

Capital expenditures:	2013		2012
Longmen Joint Venture	$	60,461	$	19,604
Maoming Hengda		2		38
Baotou Steel		8		6
General Steel (China) & Tianwu Joint Venture		3		18
Reconciling item (1)		-		-
Consolidated capital expenditures	$	60,474	$	19,666

Total Assets as of:	September 30, 2013		December 31, 2012
Longmen Joint Venture	$	2,537,952	$	2,513,206
Maoming Hengda		29,340		29,687
Baotou Steel Pipe Joint Venture		5,116		5,186
General Steel (China) & Tianwu Joint Venture		178,844		152,965
Interdivision assets		(84,880)		(57,436)
Reconciling item (2)		5,654		7,074
Total Assets	$	2,672,026	$	2,650,682

(1) Reconciling item represents the unallocated income or expenses of the Company, arising from General Steel Investment Co., Ltd, Yangpu Shengtong Investment Co., Ltd and Qiu Steel for the three and nine months ended September 30, 2013 and 2012.

(2) Reconciling item represents assets held at General Steel Holdings, Inc., General Steel Investment Co., Ltd, Yangpu Shengtong Investment Co., Ltd and Qiu Steel as of September 30, 2013 and December 31, 2012.

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Earnings (Loss) per share (Tables)

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

The computation of earnings (loss) per share is as follows:

 (in thousands, except per share data)

	For the three		For the three
	months ended		months ended
	September 30, 2013		September 30, 2012
Income (loss) attributable to holders of common stock	$	3,801	$	(41,598)
Basic and diluted weighted average number of common shares outstanding		55,141		54,466
Earnings (loss) per share
Basic and diluted	$	0.07	$	(0.76)

	For the nine		For the nine
	months ended		months ended
	September 30, 2013		September 30, 2012
Loss attributable to holders of common stock	$	(32,914)	$	(102,759)
Basic and diluted weighted average number of common shares outstanding		54,976		54,946
Loss per share
Basic and diluted	$	(0.60)	$	(1.87)

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Related party transactions and balances (Details 5) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Dec. 31, 2012
Other receivables - related parties	$ 51,501	$ 51,501	$ 68,382
Long Steel Group [Member]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture	Noncontrolling shareholder of Longmen Joint Venture
Other receivables - related parties	561	561	301
Shaanxi Steel [Member]
Related Party Relationship	Majority shareholder of Long Steel Group	Majority shareholder of Long Steel Group
Other receivables - related parties	44,811	44,811	65,981
Tianjin General Quigang Pipe Co Ltd [Member]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Other receivables - related parties	1,228	1,228	1,195
Tianjin Dazhan Industry Co Ltd [Member]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Other receivables - related parties	489	489	476
Maoming Shengze Trading Co Ltd [Member]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Other receivables - related parties	3,834	3,834	0
Others [Member]
Related Party Relationship	Entities either owned or have significant influence by our affiliates or management	Entities either owned or have significant influence by our affiliates or management
Other receivables - related parties	$ 578	$ 578	$ 429

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Deposits due to sales representatives

9 Months Ended

Sep. 30, 2013

Deposits Due To Sales Representatives [Abstract]

Deposits Due To Sales Representatives [Text Block]

Note 11 – Deposits due to sales representatives

Longmen Joint Venture entered into agreements with various entities to act as the Company’s exclusive sales agent in a specified geographic area.  These exclusive sales agents must meet certain criteria and are required to deposit a certain amount of money with the Company. In return the sales agents receive exclusive sales rights in a specified area and at discounted prices on products they order. These deposits bear no interest and are required to be returned to the sales agent once the agreement is terminated.  The agreement is normally entered/or renewed on an annual basis.  Termination of the agreement can be mutually agreed to by both parties at any time.  The Company had $30.0 million and $35.1 million in deposits due to sales representatives, including deposits due to related parties, as of September 30, 2013 and December 31, 2012, respectively.

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Taxes (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Current	$ 25	$ 100	$ 201	$ 510
Deferred	0	0	0	169
Total provision for income taxes	$ 25	$ 100	$ 201	$ 679

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Equity (Details Textual) In Millions, except Share data, unless otherwise specified			9 Months Ended					9 Months Ended
	Sep. 30, 2013 Longmen Joint Venture [Member]	Apr. 29, 2011 Longmen Joint Venture [Member]	Sep. 30, 2013 Issue One [Member] USD ($)	Sep. 30, 2013 Issue Two [Member] USD ($)	Sep. 30, 2013 Issue Three [Member] USD ($)	Sep. 30, 2013 Issue Three [Member] CNY	Sep. 30, 2013 Issue Three [Member] Longmen Joint Venture [Member]	Sep. 30, 2013 Issue Three [Member] Tianwu Joint Venture [Member] USD ($)	Sep. 30, 2013 Issue Three [Member] Tianwu Joint Venture [Member] CNY	Sep. 30, 2013 Issue Three [Member] Tianjin Material and Equipment Group Corporation [Member] USD ($)	Sep. 30, 2013 Issue Three [Member] Tianjin Material and Equipment Group Corporation [Member] CNY	Sep. 30, 2013 Issue Four [Member] USD ($)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures			174,900	163,150								163,150
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price			$ 1.01	$ 1.02								$ 0.88
Stock Issued During Period, Value, Other					$ 27.0	168.0		$ 45.1	280.0	$ 18.0	112.0
Equity Method Investment, Ownership Percentage	60.00%	60.00%					60.00%

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Intangible assets, net (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Finite-Lived Intangible Asset, Useful Life			33 years 8 months 12 days
Amortization of Intangible Assets	$ 0.2	$ 0.3	$ 0.7	$ 0.9
Depletion	$ 0.02	$ 0.10	$ 0.10	$ 0.20

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Plant and equipment, net

9 Months Ended

Sep. 30, 2013

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

Note 7 – Plant and equipment, net

Plant and equipment consist of the following:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Buildings and improvements	$	253,621	$	214,661
Machinery		616,813		573,572
Machinery under capital lease		603,248		587,334
Transportation and other equipment		22,085		20,274
Construction in progress		58,111		4,645
Subtotal		1,553,878		1,400,486
Less: accumulated depreciation		(303,336)		(232,650)
Total	$	1,250,542	$	1,167,836

Construction in progress consisted of the following as of September 30, 2013:

Construction in progress	Value		Completion
description	(In thousands)		date
1.2 million tons high-strength steel production line		32,268		December 2013
Iron-making system dust removing equipment		3,307		November 2013
Drainage system		499		November 2013
Factory wall repair		241		November 2013
Gas pipe repair		121		November 2013
Office buildings		1,336		November 2013
Equipment updates		7,381		November 2013
#5 blast furnace construction		208		September 2014
Reconstruction of miscellaneous factory buildings		690		January 2014
Project materials		2,154
Others		9,906
Total	$	58,111

The Group is obligated under a capital lease for the iron and steel making facilities, including one sintering machine, two converters, two blast furnaces and some auxiliary systems that expire on April 30, 2031. The carrying value of assets acquired under the capital lease consists of the following:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Machinery	$	603,248	$	587,334
Less: accumulated depreciation		(69,248)		(46,497)
Carrying value of leased assets	$	534,000	$	540,837

The Company assessed the recoverability of all of its remaining long-lived assets at December 31, 2012, and the sum of the discounted future cash flows expected to result from the long-lived assets and their disposition was less than the carrying value by $20.2 million (RMB 127.2 million), which was impaired and included in the selling, general and administrative expenses for the year ended December 31, 2012.  The discounted cash flows were determined using certain expected changes to the current operational assumptions. If those expectations are not met, the Company may be required to record additional impairment charges in future periods.

The Company assessed the recoverability of all of its remaining long lived assets at September 30, 2013 and such assessment did not result in any other impairment charges for the  three and nine months ended September 30, 2013.

Depreciation expense for the three months ended September 30, 2013 and 2012 amounted to $21.6 million and $20.8 million, respectively, and for the nine months ended September 30, 2013 and 2012, amounted to $64.1 and $61.4 million, respectively. These amounts include depreciation of assets held under capital leases for the three months ended September 30, 2013 and 2012, which amounted to $7.1 million and $7.0 million, respectively, and for the nine months ended September 30, 2013 and 2012, amounted to $21.2 and $20.9 million, respectively.

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Summary of significant accounting policies

9 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

Note 2 – Summary of significant accounting policies

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”).  The financial statements include the accounts of all directly, indirectly owned subsidiaries and the variable interest entity listed below. All material intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary to give a fair statement have been included. Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with information included in the 2012 annual report filed on Form 10-K filed on June 17, 2013.

(a) Basis of presentation

The unaudited condensed consolidated financial statements of the Company reflect the activities of the following major directly owned subsidiaries: 

		Percentage
Subsidiary		of Ownership
General Steel Investment Co., Ltd.	British Virgin Islands		100.0	%
General Steel (China) Co., Ltd. (“General Steel (China)”)	PRC		100.0	%
Baotou Steel – General Steel Special Steel Pipe Joint Venture Co., Ltd.	PRC		80.0	%
Yangpu Shengtong Investment Co., Ltd.	PRC		99.1	%
Tianjin Qiu Steel Investment Co., Ltd. (“Qiu Steel”)	PRC		98.7	%
Longmen Joint Venture	PRC		VIE/60.0	%
Maoming Hengda Steel Company, Ltd. (“Maoming Hengda”)	PRC		99.0	%
Tianwu General Steel Material Trading Co., Ltd (“Tianwu Joint Venture”)	PRC		60.0	%

(b) Principles of consolidation – subsidiaries

The accompanying unaudited condensed consolidated financial statements include the financial statements of the Company, its subsidiaries, its variable interest entity (“VIE”) for which the Company is the ultimate primary beneficiary, and the VIE’s subsidiaries.

Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors.  

A VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, bears the risks of, and enjoys the rewards normally associated with, ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity. 

All significant inter-company transactions and balances have been eliminated upon consolidation.

(c) Consolidation of VIE

Prior to entering into the Unified Management Agreement on April 29, 2011, Longmen Joint Venture had been consolidated as the Company’s 60% direct owned subsidiary. Upon entering into the Unified Management Agreement on April 29, 2011, Longmen Joint Venture was re-evaluated by the Company to determine if Longmen Joint Venture is a VIE and if the Company is the primary beneficiary.

Based on projected profits in this entity and future operating plans, Longmen Joint Venture ’s equity at risk is considered insufficient to finance its activities and therefore Longmen Joint Venture is considered to be a VIE.

The Company would be considered the primary beneficiary of the VIE if it has both of the following characteristics:

a.	The power to direct the activities of the VIE that most significantly impact the VIE’s economic performance; and
b.	The obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

A Supervisory Committee was formed during the negotiation of the Unified Management Agreement. Given there is both a Supervisory Committee and a Board with respect to Longmen Joint Venture , the powers (rights and roles) of both bodies were considered to determine which party has the power to direct the activities of Longmen Joint Venture , and by extension, whether the Company continues to have the power to direct Longmen Joint Venture ’s activities after this Supervisory Committee was formed and the significant investment in plant and equipment by owners of the Longmen Joint Venture partner, as discussed in Note 1- “Background”. The Supervisory Committee, which the Company holds 2 out of 4 seats, requires a ¾ majority vote, while the Board, which the Company holds 4 out of 7 seats, requires a simple majority vote. As the Supervisory Committee’s role is limited to supervising and monitoring management of Longmen Joint Venture and in the event there is any disagreement between the Board and the Supervisory Committee, the Board prevails, the Supervisory Committee is considered subordinate to the Board. Thus, the Board of Directors of Longmen Joint Venture continues to be the controlling decision-making body with respect to Longmen Joint Venture. The Company, which controls 60% of the voting rights of the Board of Directors, has control over the operations of Longmen Joint Venture and as such, has the power to direct the activities of the VIE that most significantly impact Longmen Joint Venture ’s economic performance.

In connection with the Unified Management Agreement, the Company, Shaanxi Coal and Shaanxi Steel may provide such support on a discretionary basis or as needed in the future. See Note 2 item (d) Liquidity.

The Company has the obligation to absorb losses and the rights to receive benefits based on the profit allocation as stipulated by the Unified Management Agreement that are significant to the VIE. As both conditions are met, the Company is the primary beneficiary of Longmen Joint Venture and therefore, continues to consolidate Longmen Joint Venture as a VIE.

The Company believes that the Unified Management Agreement between Longmen Joint Venture and Shaanxi Coal is in compliance with PRC law and is legally enforceable. The Board of Directors of Longmen Joint Venture continues to be the controlling decision-making body with respect to Longmen Joint Venture. The Company, which controls 60% of the voting rights of the Board of Directors, has control over the operations of Longmen Joint Venture and as such, has the power to direct the activities of the VIE. However, PRC law and/or uncertainties in the PRC legal system could limit the Company’s ability to enforce the Unified Management Agreement, which in turn, may lead to reconsideration of the VIE assessment and the potential for a different conclusion. The Company makes ongoing assessment to determine whether Longmen Joint Venture is a VIE.

The carrying amount of the VIE and its subsidiaries’ consolidated assets and liabilities are as follows:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Current assets	$	1,253,672	$	1,285,967
Plant and equipment, net		1,239,805		1,154,811
Other noncurrent assets		44,475		72,428
Total assets		2,537,952		2,513,206
Total liabilities		(3,006,938)		(2,943,761)
Net liabilities	$	(468,986)	$	(430,555)

VIE and its subsidiaries’ liabilities consist of the following:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Current liabilities:
Short term notes payable	$	950,498	$	971,117
Accounts payable		466,631		324,563
Accounts payable - related parties		171,759		177,160
Short term loans - bank		215,955		114,935
Short term loans - others		123,974		141,290
Short term loans - related parties		42,613		35,839
Current maturities of long-term loans – related party		56,372		54,885
Other payables and accrued liabilities		43,978		29,769
Other payables - related parties		96,901		64,941
Customer deposits		94,767		109,120
Customer deposits - related parties		14,512		21,998
Deposit due to sales representatives		28,184		33,870
Deposit due to sales representatives – related parties		1,809		1,238
Taxes payable		8,258		15,339
Deferred lease income		2,178		2,120
Intercompany payable to be eliminated		-		30,476
Total current liabilities		2,318,416		2,128,660
Non-current liabilities:
Long term loans - related parties		15,974		38,088
Long-term other payable – related party		-		43,008
Deferred lease income - noncurrent		75,480		75,079
Capital lease obligations		354,576		330,099
Profit sharing liability		241,090		328,827
Other noncurrent liabilities		1,402		-
Total non-current liabilities		688,522		815,101
Total liabilities of consolidated VIE	$	3,006,938	$	2,943,761

VIE and its subsidiaries’ statements of operations are as follows:

	Three months ended		Three months ended
	September 30, 2013		September 30, 2012
	(in thousands)		(in thousands)
Sales	$	606,444	$	708,974
Gross profit (loss)	$	8,122	$	(18,417)
Income (loss) from operations	$	32,967	$	(37,000)
Net income (loss) attributable to controlling interest	$	8,284	$	(39,494)

	Nine months ended		Nine months ended
	September 30, 2013		September 30, 2012
	(in thousands)		(in thousands)
Sales	$	1,903,933	$	2,126,556
Gross profit (loss)	$	(23,704)	$	12,628
Income (loss) from operations	$	32,998	$	(40,071)
Net loss attributable to controlling interest	$	(18,335)	$	(92,974)

Longmen Joint Venture has two 100% owned subsidiaries, Yuxin Trading Co., Ltd. (“Yuxin”) and Yuteng Trading Co., Ltd. (“Yuteng”). Prior to March 1, 2012, Longmen Joint Venture had three consolidated subsidiaries, Hualong Fire Retardant Material Co., Ltd. (“Hualong”), Hancheng Tongxing Metallurgy Co., Ltd. (“Tongxing”) and Beijing Huatianyulong International Steel Trading Co., Ltd. (“Huatianyulong”), in which Longmen Joint Venture did not hold a controlling interest.  On March 1, 2012, Longmen Joint Venture sold its equity interest in Tongxing, and, as of March 31, 2012, Longmen Joint Venture has two consolidated subsidiaries, Hualong and Huatianyulong, in which it does not hold a controlling interest. Hualong and Huatianyulong are separate legal entities which were established in the PRC as limited liability companies and subsequently acquired by Longmen Joint Venture in June 2007 and July 2008, respectively. Prior to and subsequent to their acquisition by Longmen Joint Venture, these two entities have been operating as self-sustaining integrated sets of activities and assets conducted and managed for the purpose of providing a return to shareholders consisting of all the inputs, processes and outputs of a business. However, these two entities do not meet the definition of variable interest entities. Further consideration was given to whether consolidation was appropriate under the voting interest model, specifically where the power of control may exist with a lesser percentage of ownership (i.e. less than 50%), for example, by contract, lease, agreement with other stockholders or by court decree.

Hualong

Longmen Joint Venture, the single largest shareholder, holds a 36.0% equity interest in Hualong. The other two shareholders, who own 34.67% and 29.33% respectively, assigned their voting rights to Longmen Joint Venture in writing at the time of the acquisition of Hualong. The voting rights have been assigned through the date Hualong ceases its business operations or the other two shareholders sell their interest in Hualong. Hualong’s main business is to supply refractory.

Tongxing

Prior to March 1, 2012, Longmen Joint Venture held a 22.76% equity interest in Tongxing while hundreds of employees of Longmen Joint Venture owned the remaining 77.24%. Each individual employee shareholder comprising the remaining 77.24% assigned its voting rights to Longmen Joint Venture in writing at the time of the acquisition of Tongxing.  The voting rights assigned were effective until Tongxing ceased its business operations or Longmen Joint Venture liquidated its equity interest of Tongxing, whichever came first.

On March 1, 2012, Longmen Joint Venture sold its 22.76% equity interest of Tongxing to two individuals, who are the representatives from Long Steel Group.  As of March 1, 2012, Tongxing had a carrying value of net assets of $40.5 million which were included in the consolidated net assets of the Company and a noncontrolling interest in Tongxing of $32.5 million.  The Company retained the land use right associated with the Tongxing property adjacent to the Longmen Joint Venture facility, which had a carrying value of $3.6 million immediately prior to the transaction and relinquished its controlling interest in the remaining net assets (primarily operating assets). In connection with the transaction, the Company also settled with a payable in cash of $0.3 million and transferred the dividend receivable of $0.9 million from Tongxing to the two individuals.  These arrangements meet the criteria of ASC 810-10-40-6b and 6d, deconsolidation of a Subsidiary with multiple arrangements treated as a single transaction. As the land use rights held in Tongxing have been included as part of the Company’s consolidated assets, this transaction was considered as a change in the Company’s ownership interest in the land use right similar to a change in a parent company’s ownership interest in a subsidiary in accordance with ASC 810-10-45-23 and therefore the carrying value of the land use right was not stepped up to fair value.  The net impact of these transactions resulted in a reduction of $3.1 million paid-in capital on March 1, 2012. 

Huatianyulong

Longmen Joint Venture holds a 50.0% equity interest in Huatianyulong and the other unrelated shareholder holds the remaining 50.0%. The other shareholder assigned its voting rights to Longmen Joint Venture in writing at the time of acquisition of Huatianyulong. The voting rights have been assigned through the date Huatianyulong ceases its business operation or the other unrelated shareholder sells its interest in Huatianyulong. Huatianyulong mainly sells imported iron ore.

The Company has determined that it is appropriate for Longmen Joint Venture to consolidate Hualong and Huatianyulong with appropriate recognition in the Company’s financial statements of the non-controlling interests in each entity, beginning on the acquisition dates as these were also the effective dates of the agreements with other stockholders granting a majority voting rights in each entity, and thereby, the power of control, to Longmen Joint Venture. The Company also has determined that it is appropriate for Longmen Joint Venture to consolidate Tongxing’s net income from the beginning of the acquisition date to March 1, 2012, the date on which Longmen Joint Venture relinquished its equity interest and majority voting rights in Tongxing, and thereby its power of control of Tongxing.

(d) Liquidity

The Company’s accounts have been prepared in accordance with U.S. GAAP on a going concern basis. The going concern basis assumes that assets are realized and liabilities are extinguished in the ordinary course of business at amounts disclosed in the financial statements. The Company’s ability to continue as a going concern depends upon aligning its sources of funding (debt and equity) with the expenditure requirements of the Company and repayment of the short-term debt facilities as and when they fall due.

The steel business is capital intensive and as a normal industry practice in PRC, the Company is highly leveraged. Debt financing in the form of short term bank loans, loans from related parties, financing sales, bank acceptance notes, and capital leases have been utilized to finance the working capital requirements and the capital expenditures of the Company. As a result, the Company’s debt to equity ratio as of September 30, 2013 and December 31, 2012 were (6.6) and (7.1), respectively. As of September 30, 2013, the Company’s current liabilities exceed current assets (excluding non-cash item) by $1.1 billion.

Longmen Joint Venture, as the most important entity of the Company, accounted for majority of total sales of the Company. As such, the majority of the Company’s working capital needs come from Longmen Joint Venture. The Company’s ability to continue as a going concern depends heavily on Longmen Joint Venture’s operations. Longmen Joint Venture has obtained different types of financial supports, which are listed below by category:

Line of credit

The Company received lines of credit from the listed major banks totaling $110.8 million with expiration dates ranging from September 27, 2014 to October 26, 2014.

	Amount of
	Line of Credit
Banks	(in millions)		Repayment Date
Bank of China		6.5	August 25, 2014 to October 26, 2014
China Everbright Bank		48.9	October 8, 2014
Bank of Xi’an		32.6	October 9, 2014
Bank of Jinzhou		22.8	September 27, 2014*
Total	$	110.8

* Management expects the line of credit will be extended after September 27, 2014.

As of the date of this report, the Company utilized $61.9 million of these lines of credit.

Vendor financing

Longmen Joint Venture signed additional vendor financing agreements, which will provide liquidity to the Company in a total amount of $815.0 million with the following companies:

		Financing Amount
Company	Financing period covered	(in millions)
Company A – related party	January 6, 2013 – January 5, 2015	$	163.0
Company B – third party	January 6, 2013 – November 7, 2015		163.0
Company C – third party	October 1, 2013 – March 31, 2015		489.0
Total		$	815.0

Company A, a related party company and Company B, a third party company, are both Longmen Joint Venture’s major coke suppliers. They have been doing business with Longmen Joint Venture for years. Each company has signed a two-year agreement with Longmen Joint Venture which was effective on January 6, 2013 to finance Longmen Joint Venture for its coke purchase for a two-year period. Company B signed an additional two-year agreement with Longmen Joint Venture effective on November 7, 2013. According to the above signed agreement, both Company A and B will not demand any cash payments for next two years. As of the date of this report, our payables to Company A and Company B were approximately$64.3 million and $51.9 million, respectively.

As a critical business stakeholder to the Company’s Tianwu Joint Venture, Company C is a Fortune 500 Company. In October 2012, Company C signed a one year agreement with Longmen Joint Venture to finance Longmen Joint Venture’s purchase of iron ore for an amount up to $158.3 million to commence on October 1, 2012. In June 2013, Company C signed another one year agreement with Longmen Joint Venture to finance Longmen Joint Venture’s purchase of iron ore for an amount up to $318.4 million to commence on October 1, 2013. According to the agreement, Company C agrees to provide an amount not less than $318.4 million in iron ore to Longmen Joint Venture. Subject to the terms of the agreement, Longmen Joint Venture is subject to a penalty of 0.05% of the daily outstanding balance owed to Company C in an event of late payment. The agreement also helps secure Company C’s iron ore sales to Longmen Joint Venture. On June 28, 2013, Company C agreed to increase the finance amount limit to $489.0 million and extended the financing period to March 31, 2015. As of the date of this report, our payable to Company C is approximately$1.2 million.

Financing sales

As part of our working capital management, Longmen Joint Venture has entered into an additional financing sales agreement with a third party company, Company D and two 100% owned subsidiaries of Longmen Joint Venture, named Yuxin Trading Co., Ltd. (“Yuxin”) and Yuteng Trading Co., Ltd. (“Yuteng”) (“financing sales”) to provide liquidity to the Company in the total amount of $81.5 million. See Note 9 for financing sales details.

Based on the contract terms, from December 31, 2012 until the earlier of the expiration date of the contract or December 31, 2013, the advance payment balance from Company D cannot be less than $81.5 million. The contract has been extended to December 31, 2014. The remaining financing sales balance can be paid by installment based on Longmen Joint Venture’s goods delivery volume. As of the date of this report, our payable to Company D is approximately $24.5 million.

Other financing

On January 7, 2013, November 6, 2013 and November 7, 2013, Longmen Joint Venture signed a payment extension agreement with each company listed below. In total, Longmen Joint Venture can get $77.4 million in financial support from a two-year balancing payment extension granted by the following five companies:

			Financing Amount
Company	Financing period covered		(in millions)
Company E – related party	January 7, 2013 – January 6, 2015	$	16.3
Company F – related party	January 7, 2013 – January 6, 2015		21.2
Company G – related party	January 7, 2013 – January 6, 2015		7.3
Company H – related party	November 7, 2013 – November 7, 2015		16.3
Company I – related party	November 6, 2013 – November 6, 2015		16.3
Total		$	77.4

According to the contract terms, Company E, Company F, Company G, Company H and Company I have agreed to grant a two year payment extension in the amounts of $16.3 million, $21.2 million, $7.3 million, $16.3 million and $16.3 million respectively. As of the date of this report, our payables to Company E, Company F, Company G, Company H and Company I are approximately $17.9  million, $14.0 million, $18.9million, $7.5 million and $0, respectively.

Amount due to sales representatives

Longmen Joint Venture entered into agreements with various entities to act as the Company’s exclusive sales agents in specified geographic areas.  These exclusive sales agents must meet certain criteria and are required to deposit a certain amount of money with the Company. In return, the sales agents receive exclusive sales rights in a specified area and discounted prices on products they order. These deposits bear no interest and are required to be returned to the sales agent once the agreement is terminated. As of September 30, 2013, Longmen Joint Venture has collected a total amount of $30.0 million. Historically, this amount is quite stable and we do not expect a big fluctuation in this amount for the next twelve months from September 30, 2013 onwards.

With the financial support from the banks and the companies above, management is of the opinion that the Company has sufficient funds to meet its future operations, working capital requirements and debt obligations until the end of September 30, 2014.The detailed breakdown of Longmen Joint Venture’s estimated cash flows items are listed below.

	Cash inflow (outflow)
	(in millions)
	For the twelve months ended
	September 30, 2014
Current liabilities over current assets (excluding non-cash items) as of September 30, 2013 (unaudited)	$	(1,072.0)
Projected cash financing and outflows:
Cash provided by line of credit from banks		110.8
Cash provided by vendor financing		815.0
Cash provided by financing sales		81.5
Cash provided by other financing		77.4
Cash provided by sales representatives		30.0
Cash projected to be used in operations in the twelve months ended September 30, 2014		(28.6)
Net projected change in cash for the twelve months ended September 30, 2014	$	14.1

As a result, the unaudited condensed consolidated financial statements for the period ended September 30, 2013 have been prepared on a going concern basis.

(e) Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the accompanying unaudited condensed consolidated financial statements and footnotes. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include the fair value of the profit sharing liability, the useful lives of and impairment for property, plant and equipment, and potential losses on uncollectible receivables, allowance for inventory valuation, the interest rate used in the financing sales, the fair value of the assets recorded under capital lease and the present value of the net minimum lease payments of the capital lease. Actual results could differ from these estimates.

(f) Concentration of risks and uncertainties

The Company’s operations are carried out in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC’s economy. The Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America and Western Europe. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.

The Company has significant exposure to the fluctuation of raw materials and energy prices as part of its normal operations. As of September 30, 2013 and December 31, 2012, the Company does not have any open commodity contracts to mitigate such risks.

Cash includes demand deposits in accounts maintained with banks within the PRC, Hong Kong and the United States. Total cash (including restricted cash balances) in these banks on September 30, 2013 and December 31, 2012 amounted to $467.9 million and $369.9 million, including $3.1 million and $2.3 million that were deposited in Shaanxi Coal and Chemical Industry Group Financial Co., Ltd., a related party, respectively. As of September 30, 2013, $0.2 million cash in the bank was covered by insurance. The Company has not experienced any losses in other bank accounts and believes it is not exposed to any risks on its cash in bank accounts.

The Company’s five major customers are all distributors and collectively represented approximately 25.5% and 23.4% of the Company’s total sales for the three and nine months ended September 30, 2013, respectively. The Company had five major customers, which represented approximately 27.2% and 34.1% of the Company’s total sales for the three months and nine months ended September 30, 2012, respectively. None of the five major customers accounted for more than 10% of total sales for the three and nine months ended September 30, 2013 and 2012, respectively. These five major customers accounted for 15.9% and 47.8% of total accounts receivable, including related parties, as of September 30, 2013 and December 31, 2012, respectively. One of the five major customers accounted for more than 10% of total accounts receivable, which amounted to $1.4 million and $10.4 million as of September 30, 2013 and December 31, 2012, respectively.

For the three and nine months ended September 30, 2013, the Company purchased approximately 15.3% and 29.3% of its raw materials from five major suppliers, respectively. None of the five major suppliers individually accounted for more than 10% of the total purchases for the three and nine months ended September 30, 2013. The purchases from the five major suppliers represent approximately 25.4% and 39.6% of the Company’s total purchases for the three months and nine months ended September 30, 2012, respectively.  Two of the five major suppliers individually accounted for more than 10% of the total purchases for the nine months ended September 30, 2012. These five vendors accounted for 28.9% and 33.8% of total accounts payable, including related parties, as of September 30, 2013 and December 31, 2012, respectively. None of the five major suppliers individually accounted for more than 10% of total accounts payable as September 30, 2013 and one of the five major suppliers individually accounted for more than 10% of total accounts payable as December 31, 2012.

(g) Foreign currency translation and other comprehensive income

The reporting currency of the Company is the U.S. dollar. The Company’s subsidiaries in China use the local currency, Renminbi (RMB), as their functional currency. Assets and liabilities are translated at the unified exchange rate as quoted by the People’s Bank of China at the end of the period. The statement of operations accounts are translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statement of equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

Translation adjustments included in accumulated other comprehensive income amounted to $2.5 million and $10.2 million as of September 30, 2013 and December 31, 2012, respectively. The balance sheet amounts, with the exception of equity at September 30, 2013 and December 31, 2012 were translated at 6.13 RMB and 6.30 RMB to $1.00, respectively. The equity accounts were stated at their historical rate. The average translation rates applied to statement of operations accounts for the three months ended September 30, 2013 and 2012 were 6.16 RMB and 6.33 RMB, respectively. The average translation rates applied to statement of operations accounts for the nine months ended September 30, 2013 and 2012 were 6.21 RMB and 6.31 RMB, respectively. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheet.

The PRC government imposes significant exchange restrictions on fund transfers out of the PRC that are not related to business operations. These restrictions have not had a material impact on the Company because it has not engaged in any significant transactions that are subject to the restrictions.

(h) Financial instruments

The accounting standards regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The Company considers the carrying amount of cash, short term investment, accounts receivable, other receivables, accounts payable and accrued liabilities, to approximate their fair values because of the short period of time between the origination of such instruments and their expected realization. For short term loans and notes payable, the Company concluded the carrying values are a reasonable estimate of fair values because of the short period of time between the origination and repayment and as their stated interest rates approximate current rates available.

The Company analyzes all financial instruments with features of both liabilities and equity, pursuant to which the Company’s warrants were required to be recorded as a liability at fair value and marked to market each reporting period.

The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follow:

· Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

· Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

· Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

On December 13, 2007, the Company entered into a Securities Purchase Agreement (the “Agreement”) with certain institutional investors issuing $40.0 million (“Notes”) and 1,154,958 warrants. The warrants can be exercised for common stock through May 13, 2013 at $13.51 per share, subject to customary anti-dilution adjustments.  On December 24, 2009, the holders of the existing warrants of 1,154,958 shares entered into an agreement with the Company that reset the exercise price from $13.51 to $5 per share and increased the number of warrants from 1,154,958 to 3,900,871, which expired on May 13, 2013.

In December 2009, the Company issued an additional 2,777,778 warrants in connection with a registered direct offering, which expired as of June 24, 2012.

The aforementioned warrants meet the definition of a derivative instrument in the accounting standards. Therefore these instruments were accounted for as derivative liabilities and recorded at their fair value as of each reporting period. The change in the value of the derivative liabilities is charged against or credited to income.  The fair value was determined using the Cox Rubenstein Binomial Model, defined in the accounting standard as Level 2 inputs, and recorded the change in earnings. See Note 12– “Convertible notes and derivative liabilities” for the variables used in the Cox Rubenstein Binomial model.

The Company determined the carrying value of the profit sharing liability using Level 3 inputs by considering the present value of Longmen Joint Venture’s projected profits/losses with a discount rate of 7.3% based on the Company’s average borrowing rate. The projected profits/losses in Longmen Joint Venture were based upon, but not limited to, the following assumptions until April 30, 2031:

· projected selling units and growth in the steel market

· projected unit selling price in the steel market

· projected unit purchase cost in the coal and iron ore markets

· selling and general and administrative expenses to be in line with the growth in the steel market

· projected bank borrowings

The above assumptions were reviewed by the Company at September 30, 2013 and the Company changed those assumptions as compared to the assumption used at December 31, 2012 because of the changes in market conditions in PRC.  Since the Company had the most updated information from the banks, GDP report and the operating results from the three and nine months ended September 30, 2013, all of the above information indicated the downward trend in the steel manufacturing industry in the coming years. As a result, the Company re-measured the fair value of the 40% profit sharing liability as of the period ended September 30, 2013 and recorded a gain on change in fair value of profit sharing liability of $41.8 million and $107.9 million for the three and nine months ended September 30, 2013, respectively.

If there will be any slight changes in any of the assumptions that we used, the fair value of the profit sharing liability will be changed accordingly.  If we would reduce the projected bank borrowings rate by 1.0% and other factors remained unchanged, our profit sharing liability as of the beginning of the period ended September 30, 2013 would have been $254.9 million and we would reduce the gain from the change in the fair value of profit sharing liabilities by $32.9 million.If we would reduce the projected selling units and growth in the steel market rate by 1.0% and other factors remained unchanged, our profit sharing liability as of the beginning of the period ended September 30, 2013 would have been $214.3 million and we would increase the gain from the change in the fair value of profit sharing liabilities by $8.3 million.

The following table sets forth by level within the fair value hierarchy, the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2013:

	Carrying Value as		Fair Value Measurements at September 30,
	of September 30,		2013
(in thousands)	2013		Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Profit sharing liability	$	241,090	$	-	$	-	$	241,090
Total	$	241,090	$	-	$	-	$	241,090

The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2012:

	Carrying Value as		Fair Value Measurements at December 31,
	of December 31,		2012
(in thousands)	2012		Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Derivative liabilities	$	1	$	-	$	1	$	-
Profit sharing liability		328,827		-		-		328,827
Total	$	328,828	$	-	$	1	$	328,827

The following is a reconciliation of the beginning and ending balance of the assets and liabilities measured at fair value on a recurring basis for the nine month ended September 30, 2013 and for the year ended December 31, 2012:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Beginning balance	$	328,828	$	303,243
Change in fair value of profit sharing liability		(107,877)		-
Current period interest expense accreted		12,440		22,499
Change of derivative liabilities charged to earnings		1		9
Exchange rate effect		7,698		3,077
Ending balance	$	241,090	$	328,828

Except for the derivative liabilities and profit sharing liability, the Company did not identify any other assets or liabilities that are required to be presented on the balance sheet at fair value in accordance with the accounting standard. The carrying value of the long term loans-related party approximates to its fair value as of the reporting date.

(i) Notes receivable

Notes receivable represents trade accounts receivable due from various customers where the customers’ banks have guaranteed the payment. The notes are non-interest bearing and normally paid within three to six months. The Company has the ability to submit request for payment to the customer’s bank earlier than the scheduled payment date, but will incur an interest charge and a processing fee.

Restricted notes receivable represents notes receivable pledged as collateral for short-term loans and short-term notes payable issued by banks.

Interest expenses for early submission request of payment for the three months ended September 30, 2013 and 2012 amounted to $9.6 million and $16.3 million, respectively, and amounted to $26.9 million and $65.6 million, respectively, for the nine months ended September 30, 2013 and 2012.

 

                 (j)                  Plant and equipment, net

Plant and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets with a 3%-5% residual value. The depreciation expense on assets acquired under capital leases is included with depreciation expense on owned assets. The estimated useful lives are as follows:

Buildings and Improvements	10-40 Years
Machinery	10-30 Years
Machinery and equipment under capital lease	20 Years
Other equipment	5 Years
Transportation Equipment	5 Years

The Company assesses all significant leases for purposes of classification as either operating or capital. At lease inception, if the lease meets any of the four following criteria, the Company will classify it as a capital lease; otherwise it will be treated as an operating lease: a) transfer of ownership to lessee at the end of the lease term, b) bargain purchase option, c) lease term is equal to 75% or more of the estimated economic life of the leased property, d) the present value of the minimum lease payments is 90% or more of the fair value of the leased asset.

Construction in progress represents the costs incurred in connection with the construction of buildings or new additions to the Company’s plant facilities. No depreciation is provided for construction in progress until such time as the assets are completed and are placed into service, maintenance, repairs and minor renewals are charged directly to expense as incurred. Major additions and betterment to buildings and equipment are capitalized. Interest incurred during construction is capitalized into construction in progress. All other interest is expensed as incurred.

Long lived assets, including buildings and improvements, equipment and intangible assets are reviewed if events and changes in circumstances indicate that its carrying amount may not be recoverable, to determine whether their carrying value has become impaired. The Company considers assets to be impaired if the carrying value exceeds the future projected cash flows from related operations. The Company also re-evaluates the periods of depreciation and amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives.

(j) Intangible assets

Finite lived intangible assets of the Company are reviewed for impairment if events and circumstances require. The Company considers assets to be impaired if the carrying value exceeds the future projected cash flows from related operations. The Company also re-evaluates the periods of amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives.  As of September 30, 2013, the Company expects these assets to be fully recoverable.

Land use rights

All land in the PRC is owned by the government. However, the government grants “land use rights.”  General Steel (China) acquired land use rights in 2001 for a total of $3.9 million (RMB 23.7 million). These land use rights are for 50 years and expire in 2050 and 2053. The Company amortizes the land use rights over the twenty-year business term because its business license had a twenty-year term.

Long Steel Group contributed land use rights for a total amount of $24.2 million (RMB 148.6 million) to the Longmen Joint Venture. The contributed land use rights are for 50 years and expire in 2048 to 2052.

Maoming Hengda has land use rights amounting to $2.7 million (RMB 16.6 million) for 50 years that expire in 2054.

Other than the land use rights that General Steel (China) acquired in 2001, the Company amortizes the land use rights over their 50 year term.

Entity	Original Cost		Expires on
	(in thousands)
General Steel (China)	$	3,867		2050 & 2053
Longmen Joint Venture	$	24,226		2048 & 2052
Maoming Hengda	$	2,705		2054

Mining right

Mining rights are capitalized at cost when acquired, including amounts associated with any value beyond proven and probable reserves, and amortized to operations as depletion expense using the units-of-production method over the estimated proven and probable recoverable tons. Longmen Joint Venture has iron ore mining right amounting to $2.4 million (RMB 15.0 million), which is amortized over the estimated recoverable reserve of 4.2 million tons.

(k) Investments in unconsolidated entities

Entities in which the Company has the ability to exercise significant influence, but does not have a controlling interest, are accounted for using the equity method. Significant influence is generally considered to exist when the Company has an ownership interest in the voting stock between 20% and 50%, and other factors, such as representation on the Board of Directors, voting rights and the impact of commercial arrangements, are considered in determining whether the equity method of accounting is appropriate. The Company accounts for investments with ownership less than 20% using the cost method.

The table below summarizes Longmen Joint Venture’s investment holdings as of September 30, 2013 and December 31, 2012.

			September 30,				December 31,
			2013				2012
	Year		Net investment		Owned		Net investment		Owned
Unconsolidated entities	acquired		(In thousands)		%		(In thousands)		%
Xian Delong Powder Engineering Materials Co., Ltd.		2007	$	1,161		24.1	$	1,166		24.1

Total investment income in unconsolidated subsidiaries amounted to $0.05 million and $0.04 million for the three months ended September 30, 2013 and 2012, respectively, and $0.1 million and $0.1 million for the nine months ended September 30, 2013 and 2012, respectively, which was included in “Loss from equity investments” in the unaudited condensed consolidated statements of operations and comprehensive income (loss).

(l) Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications have no effect on the accompanying consolidated statements of operations and cash flows.

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Other income (expense) (Details Textual) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Lease income	$ 542	$ 528	$ 1,613	$ 1,588	$ 2,119

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Summary of significant accounting policies (Details 5) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Financing Amount	$ 110.8
Company A [Member]
Financing period covered	January 6, 2013 – January 5, 2015
Company B [Member]
Financing period covered	January 6 2013 – November 7 2015
Company C [Member]
Financing period covered	October 1, 2013 – March 31, 2015
Vendor Financing [Member] | Company A [Member]
Financing Amount	163.0
Vendor Financing [Member] | Company B [Member]
Financing Amount	163.0
Vendor Financing [Member] | Company C [Member]
Financing Amount	$ 489.0

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Summary of significant accounting policies (Details)	9 Months Ended		9 Months Ended						9 Months Ended
	Sep. 30, 2013 General Steel Investment Co., Ltd. [Member]	Aug. 05, 2002 General Steel Investment Co., Ltd. [Member]	Sep. 30, 2013 General Steel (China) Co., Ltd. ("General Steel (China)") [Member]	Sep. 30, 2013 Baotou Steel - General Steel Special Steel Pipe Joint Venture Co., Ltd. [Member]	Sep. 30, 2013 Yangpu Shengtong Investment Co., Ltd. [Member]	Sep. 30, 2013 Tianjin Qiu Steel Investment Co., Ltd. ("Qiu Steel") [Member]	Sep. 30, 2013 Longmen Joint Venture [Member]	Apr. 29, 2011 Longmen Joint Venture [Member]	Sep. 30, 2013 Maoming Hengda Steel Company, Ltd. ("Maoming Hengda") [Member]	Sep. 30, 2013 Tianwu General Steel Material Trading Co., Ltd ("Tianwu Joint Venture") [Member]
Equity Method Investment, Ownership Percentage	100.00%	100.00%	100.00%	80.00%	99.10%	98.70%	60.00%	60.00%	99.00%	60.00%
Entity Incorporation, State Country Name	British Virgin Islands		PRC	PRC	PRC	PRC	PRC		PRC	PRC

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Related party transactions and balances (Details 7) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Dec. 31, 2012
Accounts payable - related parties	$ 172,259	$ 172,259	$ 177,432
Hancheng Haiyan Coking Co Ltd [Member]
Related Party Relationship	Noncontrolling shareholder of Long Steel Group	Noncontrolling shareholder of Long Steel Group
Accounts payable - related parties	60,463	60,463	58,661
Long Steel Group [Member]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture	Noncontrolling shareholder of Longmen Joint Venture
Accounts payable - related parties	100,579	100,579	91,511
Shaanxi Coal and Chemical Industry Group Co Ltd [Member]
Related Party Relationship	Shareholder of Shaanxi Steel	Shareholder of Shaanxi Steel
Accounts payable - related parties	0	0	5,652
Tianjin Dazhan Industry Co Ltd [Member]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Accounts payable - related parties	954	954	3
Xi'an Pinghe Metallurgical Raw Material Co Ltd [Member]
Related Party Relationship	Noncontrolling shareholder of Long Steel Group	Noncontrolling shareholder of Long Steel Group
Accounts payable - related parties	7,838	7,838	5,278
Tianjin Hengying Trading Co Ltd [Member]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Accounts payable - related parties	1	1	13,919
Henan Xinmi Kanghua Fire Refractory Co Ltd [Member]
Related Party Relationship		Noncontrolling shareholder of Longmen Joint Venture’s subsidiary
Accounts payable - related parties	722	722	1,146
Beijing Daishang Trading Co Ltd [Member]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary
Accounts payable - related parties	1,149	1,149	875
Tianjin General Qiugang Pipe Co Ltd [Member]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Accounts payable - related parties	0	0	52
Others [Member]
Related Party Relationship	Entities either owned or have significant influence by our affiliates or management	Entities either owned or have significant influence by our affiliates or management
Accounts payable - related parties	$ 553	$ 553	$ 335

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Deposits due to sales representatives (Details Textual) (USD $) In Millions, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Deposits Due To Sales Representative Including Related Parties	$ 30.0	$ 35.1

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Related party transactions and balances (Details 14) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Dec. 31, 2012
Long-term other receivable	$ 0	$ 0	$ 43,008
Shaanxi Steel [Member]
Related Party Relationship	Majority shareholder of Long Steel Group	Majority shareholder of Long Steel Group
Long-term other receivable	$ 0	$ 0	$ 43,008

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Loans receivable - related parties (Tables)

9 Months Ended

Sep. 30, 2013

Loans and Leases Receivable, Related Parties Disclosure [Abstract]

Schedule Of Loans Receivable Related Parties Current [Table Text Block]

The Company had the following loans receivable – related parties due within one year as of:

	September 30, 2013		December 31, 2012
	(in thousands)		(in thousands)
Loans to Long Steel Group; due on demand and non-interest bearing.		-		63,319
Loan to Teamlink Investment Co., Ltd; due in December 2013, June 2014, and July 2014; interest rate was 4.75%		4,540		6,000
Total loans receivable – related parties	$	4,540	$	69,319

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Related party transactions and balances (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013		Dec. 31, 2012
Loans receivable - related parties	$ 4,540	$ 4,540		$ 69,319
Long Steel Group [Member]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture	Noncontrolling shareholder of Longmen Joint Venture
Loans receivable - related parties	0	0		63,319
Teamlink Investment Co Ltd [Member]
Related Party Relationship		Partially owned by CEO* through indirect shareholding	[1]
Loans receivable - related parties	$ 4,540	$ 4,540		$ 6,000

[1] The CEO is referred to herein as the chief executive officer of General Steel Holdings, Inc.

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Related party transactions and balances (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Machinery	$ 603,248	$ 587,334
Less: accumulated depreciation	(69,248)	(46,497)
Carrying value of leased assets	534,000	540,837
Shaanxi Coal and Shaanxi Steel [Member]
Machinery	603,248	587,334
Less: accumulated depreciation	(69,248)	(46,497)
Carrying value of leased assets	$ 534,000	$ 540,837

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Customer deposits (Details Textual) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Customer Deposits Including Related Parties	$ 110,200,000	$ 147,900,000
Customer deposits - related parties	$ 14,512,000	$ 21,998,000

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Capital lease obligation (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Capital Lease Obligation Minimum Lease Payments, Year ended September 30, 2014	$ 0
Capital Lease Obligation Minimum Lease Payments, Year ended September 30, 2015	126,557
Capital Lease Obligation Minimum Lease Payments, Year ended September 30, 2016	28,654
Capital Lease Obligation Minimum Lease Payments, Year ended September 30, 2017	28,654
Capital Lease Obligation Minimum Lease Payments, Year ended September 30, 2018	28,654
Capital Lease Obligation Minimum Lease Payments, Thereafter	360,567
Capital Lease Obligation Minimum Lease Payments, Total minimum lease payments	573,086
Capital Lease Obligation Minimum Lease Payments, Less: amounts representing interest	(218,510)
Capital Lease Obligation Minimum Lease Payments, Ending balance	354,576
Capital Lease Obligation Profit (Loss) Sharing, Year ended September 30, 2014	0
Capital Lease Obligation Profit (Loss) Sharing, Year ended September 30, 2015	0
Capital Lease Obligation Profit (Loss) Sharing, Year ended September 30, 2016	0
Capital Lease Obligation Profit (Loss) Sharing, Year ended September 30, 2017	0
Capital Lease Obligation Profit (Loss) Sharing, Year ended September 30, 2018	0
Capital Lease Obligation Profit (Loss) Sharing, Thereafter	650,586
Capital Lease Obligation Minimum Lease Payments, Total minimum lease payments	650,586
Capital Lease Obligation Profit (Loss) Sharing, Less: amounts representing interest	(409,496)
Capital Lease Obligation Profit (Loss) Sharing, Ending balance	241,090
Total, Year ended September 30, 2014	0
Total, Year ended September 30, 2015	126,557
Total, Year ended September 30, 2016	28,654
Total, Year ended September 30, 2017	28,654
Total, Year ended September 30, 2018	28,654
Total, Thereafter	1,011,153
Total, Total minimum lease payments	1,223,672
Total, Less: amounts representing interest	(628,006)
Total, Ending balance	$ 595,666

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Inventories (Details 1) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Beginning balance	$ 9,585	$ 38,143
Addition	7,305	9,582
Less: write-off	(9,722)	(38,519)
Exchange rate effect	229	379
Ending balance	$ 7,397	$ 9,585

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Retirement plan (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Defined Contribution Plan Employer Matching Contribution Percent Criteria One			20.00%
Defined Contribution Plan Employer Matching Contribution Percent Criteria Two			12.00%
Pension Expense	$ 2.3	$ 1.7	$ 6.4	$ 5.5
Defined Contribution Plan Employer Contribution Description			The Company’s entities in China are required to contribute based on the higher of 20% of the employees’ monthly base salary or 12% of the minimum social average salary of the city where the facilities are located.
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent			8.00%

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Summary of significant accounting policies (Details 12) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Net investment	$ 1,161	$ 1,166
Xian Delong Powder Engineering Materials Co Ltd [Member]
Year acquired	2007
Net investment	$ 1,161	$ 1,166
Owned Percentage	24.10%	24.10%

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Convertible notes and derivative liabilities (Details) (USD $)	12 Months Ended
	Dec. 31, 2012
Expected volatility	86.00%
Expected dividend yield	0.00%
Risk-free interest rate	0.08%
Expected lives (in years)	4 months 10 days
Market price	$ 0.99
Strike price	$ 5.00

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Deferred lease income

9 Months Ended

Sep. 30, 2013

Deferred Revenue [Abstract]

Deferred Revenue Disclosure [Text Block]

Note 14 - Deferred lease income

To compensate the Group for costs and economic losses incurred during construction of the iron and steel making facilities owned by Shaanxi Steel, Shaanxi Steel reimbursed Longmen Joint Venture $11.4 million (RMB 70.1 million) in the fourth quarter of 2010 for the value of assets dismantled and rent under a 40-year property sub-lease that was entered into by the parties in June 2009 (the "Longmen Sub-lease"), and $29.8 million (RMB 183.1 million) for the reduced production efficiency caused by the construction. In addition, in 2010 and 2011, Shaanxi Steel reimbursed Longmen Joint Venture $14.6 million (RMB 89.5 million) and $14.6 million (RMB 89.3 million), respectively, for trial production costs related to the new equipment.

During the period from June 2010 to March 2011, as construction progressed and certain of the assets came online, Longmen Joint Venture used the assets free of charge to produce saleable units of steel products during this period. As such, the cost of using these assets and therefore the fair value of the free rent received was imputed with reference to what the depreciation charge would have been on these assets had they been owned or under capital lease to Longmen Joint Venture during the free use period. This cost of $7.2 million (RMB 43.9 million) each year were deferred and will be recognized over the term of the land sub-lease similar to the other charges and credits related to the construction of these assets.

The deferred lease income is amortized to income over the remaining term of the 40-year land sub-lease. For the three months ended September 30, 2013 and 2012, the Company recognized $0.5 million in each period. For the nine months ended September 30, 2013 and 2012, the Company recognized $1.6 million in each period. As of September 30, 2013 and December 31, 2012, the balance of deferred lease income amounted to $77.7 million and $77.2 million, respectively, of which $2.2 million and $2.1 million represents balance to be amortized within one year.

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Customer deposits

9 Months Ended

Sep. 30, 2013

Deposits [Abstract]

Customer Deposits Disclosure [Text Block]

Note 10 – Customer deposits

Customer deposits represent amounts advanced by customers on product orders. The product normally is shipped within one month after receipt of the advance payment, and the related sale is recognized in accordance with the Company’s revenue recognition policy. As of September 30, 2013 and December 31, 2012, customer deposits amounted to $110.2 million and $147.9 million, respectively, including deposits received from related parties, which amounted to $14.5 million and $22.0 million, respectively.

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Commitment and contingencies (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Operating Leases, Rent Expense	$ 0.8	$ 0.8	$ 2.4	$ 2.4
Contractual Obligation	$ 211.6		$ 211.6

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Plant and equipment, net (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Buildings and improvements	$ 253,621	$ 214,661
Machinery	616,813	573,572
Machinery under capital lease	603,248	587,334
Transportation and other equipment	22,085	20,274
Construction in progress	58,111	4,645
Subtotal	1,553,878	1,400,486
Less: accumulated depreciation	(303,336)	(232,650)
Total	$ 1,250,542	$ 1,167,836

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Other income (expense)

9 Months Ended

Sep. 30, 2013

Other Income and Expenses [Abstract]

Other Income and Other Expense Disclosure [Text Block]

Note 17 – Other income (expense)

Lease income

The deferred lease income from the reimbursement from Shaanxi Steel for the net book value of the fixed assets that were demolished and for the inefficiency costs caused by the construction and loss incurred in the beginning stages of the system production is amortized to income over the remaining sub-lease term. For the three months ended September 30, 2013 and 2012, the Company recognized lease income of $0.5 million and $0.5 million, and for the nine months ended September 30, 2013 and 2012, amounted to $1.6 million and $1.6 million, respectively.

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Capital lease obligation

9 Months Ended

Sep. 30, 2013

Leases, Capital [Abstract]

Capital Leases in Financial Statements of Lessee Disclosure [Text Block]

Note 15 - Capital lease obligation

On April 29, 2011, the Company’s subsidiary, Longmen Joint Venture entered into a Unified Management Agreement with Shaanxi Steel and Shaanxi Coal under which Longmen Joint Venture uses new iron and steel making facilities including one sintering machine, two converters, two blast furnaces and other auxiliary systems constructed by Shaanxi Steel. As the 20-year term of the agreement exceeds 75% of the assets’ useful lives, this arrangement is accounted for as a capital lease. The ongoing lease payments are comprised of two elements: (1) a monthly payment based on Shaanxi Steel’s cost to construct the assets of $2.3 million (RMB14.6 million) to be paid over the term of the Unified Management Agreement of 20 years and (2) 40% of any remaining pre-tax profits from the Asset Pool which includes Longmen Joint Venture and the newly constructed iron and steel making facilities. In October 2012, Shaanxi Steel agreed that it will not demand capital lease payment from Longmen Joint Venture until October 2014. The profit sharing component does not meet the definition of contingent rent because it is based on future revenue and is therefore considered part of the financing for the capital leased assets which is related to the Unified Management Agreement. For purposes of determining the value of the leased asset and obligation at the inception of the lease, the lease liability is then reduced by the value of the profit sharing component, which is recognized as a separate financial liability carried at fair value. See Note 16 – “Profit sharing liability”.

Presented below is a schedule of estimated minimum lease payments on the capital lease obligation as well as payments for the profit sharing liability for the next five years as of September 30, 2013:

	Capital Lease Obligation		Capital Lease Obligation
Year ending September 30,	Minimum Lease Payments		Profit (Loss) Sharing		Total
	(in thousands)		(in thousands)		(in thousands)
2014	$	-	$	-	$	-
2015		126,557		-		126,557
2016		28,654		-		28,654
2017		28,654		-		28,654
2018		28,654		-		28,654
Thereafter		360,567		650,586		1,011,153
Total minimum lease payments		573,086		650,586		1,223,672
Less: amounts representing interest		(218,510)		(409,496)		(628,006)
Ending balance	$	354,576	$	241,090	$	595,666

Longmen Joint Venture does not expect to make payments on the profit sharing payment until year 2022 when Longmen Joint Venture will start to generating accumulated profit after recovering from the previous years’ losses.

Interest expense for the three months ended September 30, 2013 and 2012 on the minimum lease payments were $5.1 million and $5.1 million, respectively.

Interest expense for the nine months ended September 30, 2013 and 2012 on the minimum lease payments were $15.3 million and $15.5 million, respectively.

Interest expense for the three months ended September 30, 2013 and 2012 on the profit sharing liability were $2.6 million and $5.6 million, respectively.

Interest expense for the nine months ended September 30, 2013 and 2012 on the profit sharing liability were $12.4 million and $16.9 million, respectively.

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Related party transactions and balances (Details 8) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Dec. 31, 2012
Short term loans - related parties	$ 48,889	$ 48,889	$ 79,557
Shaanxi Steel [Member]
Related Party Relationship	Majority shareholder of Long Steel Group	Majority shareholder of Long Steel Group
Short term loans - related parties	0	0	35,839
Shaanxi Coal and Chemical Industry Group Co Ltd [Member]
Related Party Relationship	Shareholder of Shaanxi Steel	Shareholder of Shaanxi Steel
Short term loans - related parties	33,580	33,580	0
Long Steel Group [Member]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture	Noncontrolling shareholder of Longmen Joint Venture
Short term loans - related parties	1,547	1,547	0
Tianjin Hengying Trading Co Ltd [Member]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Short term loans - related parties	10,916	10,916	19,549
Tianjin Dazhan Industry Co Ltd [Member]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Short term loans - related parties	0	0	21,397
Beijing Shenhua Xinyuan Metal Materials Co Ltd [Member]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Short term loans - related parties	1,395	1,395	1,359
Yangpu Capital Automobile [Member]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Short term loans - related parties	$ 1,451	$ 1,451	$ 1,413

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Document And Entity Information	9 Months Ended
	Sep. 30, 2013	Nov. 05, 2013
Document Information [Line Items]
Entity Registrant Name	GENERAL STEEL HOLDINGS INC
Entity Central Index Key	0001239188
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		55,298,732
Trading Symbol	GSI
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2013
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2013

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Convertible notes and derivative liabilities (Details 1) (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Outstanding Beginning Balance	$ 3,900,871	$ 6,678,649
Granted	0	0
Forfeited / expired	(3,900,871)	(2,777,778)
Exercised	0	0
Outstanding Ending Balance	$ 0	$ 3,900,871

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Profit sharing liability

9 Months Ended

Sep. 30, 2013

Profit Sharing Liability [Abstract]

Profit Sharing Liability [Text Block]

Note 16 –Profit sharing liability

The profit sharing liability is recognized initially at its estimated fair value at the lease commencement date and included in the initial measurement and recognition of the capital lease in addition to the fixed payment component of the minimum lease payments. Subsequently, this financial instrument is accounted for separately from the lease accounting (Note 15 - “Capital lease obligation”). The initial fair value of the expected payments under the profit sharing component of the Unified Management Agreement is amortized over the term of the agreement using the effective interest method. The value of the profit sharing liability will be reassessed each reporting period with any change in fair value accounted for on a prospective basis. Refer to Note 2(h) – “Financial instruments” for details.

Based on the performance of the Asset Pool, no profit sharing payment, which is not required until net cumulative profits are achieved, was made for the nine months ended September 30, 2013 and 2012. Payments to Shaanxi Steel for the profit sharing are made based on net cumulative profits.

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Loans receivable - related parties (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Loans receivable - related parties	$ 4,540	$ 69,319
Long Steel Group [Member]
Loans receivable - related parties	0	63,319
Teamlink Investment Co., Ltd [Member]
Loans receivable - related parties	$ 4,540	$ 6,000

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Related party transactions and balances (Details 12) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Dec. 31, 2012
Deposit due to sales representatives - related parties	$ 1,809	$ 1,809	$ 1,238
Hancheng Haiyan Coking Co Ltd [Member]
Related Party Relationship	Noncontrolling shareholder of Long Steel Group	Noncontrolling shareholder of Long Steel Group
Deposit due to sales representatives - related parties	587	587	619
Shaanxi Junlong Rolling Co Ltd [Member]
Related Party Relationship	Investee of Long Steel Group	Investee of Long Steel Group
Deposit due to sales representatives - related parties	635	635	619
Shaanxi Yuchang Trading Co Ltd [Member]
Related Party Relationship	Significant influence by Long Steel Group	Significant influence by Long Steel Group
Deposit due to sales representatives - related parties	$ 587	$ 587	$ 0

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Summary of significant accounting policies (Details Textual)	0 Months Ended	3 Months Ended						9 Months Ended				12 Months Ended					9 Months Ended						3 Months Ended	9 Months Ended	3 Months Ended		9 Months Ended				12 Months Ended	9 Months Ended													12 Months Ended																			0 Months Ended	3 Months Ended
	Dec. 31, 2009	Sep. 30, 2013 USD ($)	Sep. 30, 2013 CNY	Mar. 31, 2013	Sep. 30, 2012 USD ($)	Sep. 30, 2012 CNY	Mar. 31, 2012	Sep. 30, 2013 USD ($)	Sep. 30, 2013 CNY	Sep. 30, 2012 USD ($)	Sep. 30, 2012 CNY	Dec. 31, 2012 USD ($)	Dec. 31, 2012 CNY	Oct. 31, 2012 USD ($)	Dec. 24, 2009 USD ($)	Dec. 31, 2007 USD ($)	Sep. 30, 2013 Criteria One [Member] USD ($)	Sep. 30, 2013 Criteria Two [Member] USD ($)	Sep. 30, 2013 Maximum [Member]	Sep. 30, 2013 Minimum [Member]	Sep. 30, 2013 Mining Rights [Member] USD ($)	Sep. 30, 2013 Mining Rights [Member] CNY	Sep. 30, 2012 Five Customers [Member]	Sep. 30, 2012 Five Customers [Member]	Sep. 30, 2013 Five Customers [Member] Sales [Member]	Sep. 30, 2012 Five Customers [Member] Sales [Member]	Sep. 30, 2013 Five Customers [Member] Sales [Member]	Sep. 30, 2012 Five Customers [Member] Sales [Member]	Sep. 30, 2013 One Customer [Member]	Sep. 30, 2013 Five Suppliers [Member]	Dec. 31, 2012 Five Suppliers [Member]	Sep. 30, 2012 One Suppliers [Member]	Sep. 30, 2013 Company E [Member] USD ($)	Sep. 30, 2013 Company A [Member] USD ($)	Sep. 30, 2013 Company B [Member] USD ($)	Dec. 31, 2012 Company D [Member] USD ($)	Sep. 30, 2013 Company F [Member] USD ($)	Sep. 30, 2013 Company G [Member] USD ($)	Sep. 30, 2013 Company H [Member] USD ($)	Sep. 30, 2013 Company C [Member] USD ($)	Sep. 30, 2013 Shaanxi Coal and Chemical Industry Group Co Ltd [Member] USD ($)	Dec. 31, 2012 Shaanxi Coal and Chemical Industry Group Co Ltd [Member] USD ($)	Sep. 30, 2013 Longmen Joint Venture [Member]	Apr. 29, 2011 Longmen Joint Venture [Member]	Dec. 31, 2012 Longmen Joint Venture [Member] Subsequent Event [Member]	Dec. 31, 2012 Longmen Joint Venture [Member] Company D [Member] USD ($)	Dec. 31, 2012 Yuxin Trading Co Ltd [Member]	Dec. 31, 2012 Yuteng Trading Co Ltd [Member]	Sep. 30, 2013 Hualong [Member]	Sep. 30, 2013 Hualong [Member] Shareholder One [Member]	Sep. 30, 2013 Hualong [Member] Shareholder Two [Member]	Dec. 31, 2012 Tongxing [Member]	Dec. 31, 2012 Huatianyulong [Member]	Sep. 30, 2013 General Steel Investment Co Ltd [Member] USD ($)	Sep. 30, 2013 General Steel Investment Co Ltd [Member] CNY	Dec. 31, 2007 General Steel Investment Co Ltd [Member] USD ($)	Dec. 31, 2007 General Steel Investment Co Ltd [Member] CNY	Aug. 05, 2002 General Steel Investment Co Ltd [Member]	Sep. 30, 2013 Maoming Hengda Steel Company Ltd [Member] USD ($)	Sep. 30, 2013 Maoming Hengda Steel Company Ltd [Member] CNY	Sep. 30, 2013 Yangpu Shengtong Investment Co Ltd [Member]	Sep. 30, 2013 Tianjin Qiu Steel Investment Co Ltd [Member]	Sep. 30, 2013 Tianwu General Steel Material Trading Co Ltd [Member]	Mar. 01, 2012 Hancheng Tongxing Metallurgy Co Ltd [Member] USD ($)	Mar. 31, 2012 Hancheng Tongxing Metallurgy Co Ltd [Member] USD ($)
Equity Method Investment, Ownership Percentage																																											60.00%	60.00%			100.00%	100.00%	36.00%	34.67%	29.33%	22.76%	50.00%	100.00%	100.00%			100.00%	99.00%	99.00%	99.10%	98.70%	60.00%
Working Capital		$ 1,100,000,000						$ 1,100,000,000
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners																																																				77.24%
Debt To Equity Ratio		6.6	6.6					6.6	6.6			7.1
Due to Related Parties												1,200,000																					17,900,000	64,300,000	51,900,000	24,500,000	14,000,000	18,900,000	7,500,000
Vendor Financing, Variable Interest Rate																																													0.05%
Line Of Credit Amount Utilized		61,900,000						61,900,000
Financing Sales Agreement, Minimum Advance For Rebar Sold																																														81,500,000
Cash and Cash Equivalents Including Restricted Cash		467,900,000						467,900,000				369,900,000
Cash In Bank, Insurance Coverage		200,000						200,000
Deposits Assets																																									3,100,000	2,300,000
Entity Wide Purchases Major Supplier Percentage		15.30%	15.30%		10.00%	10.00%		29.30%	29.30%														25.40%	39.60%					10.00%	15.90%	47.80%	10.00%
Entity Wide Accounts Payable Major Supplier Percentage		10.00%	10.00%					10.00%	10.00%			10.00%																		28.90%	33.80%
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent								2,500,000				10,200,000
Foreign Currency Exchange Translation Rate Balance Sheet Items			6.13						6.13				6.30
Foreign Currency Exchange Average Translation Rate			6.16			6.33			6.21		6.31
Debt Instrument, Face Amount																40,000,000
Warrants Issued																1,154,958
Warrants Exercise Price																$ 13.51
Warrants Modified Exercise Price															$ 5
Warrants Issued Increased															3,900,871
Warrants Issued During Period	2,777,778
Percentage Of Profit Sharing Liability				40.00%				40.00%	40.00%
Property, Plant and Equipment, Salvage Value, Percentage																			5.00%	3.00%
Criteria For Determination Of Nature Of Lease								The Company assesses all significant leases for purposes of classification as either operating or capital. At lease inception, if the lease meets any of the four following criteria, the Company will classify it as a capital lease; otherwise it will be treated as an operating lease: a) transfer of ownership to lessee at the end of the lease term, b) bargain purchase option, c) lease term is equal to 75% or more of the estimated economic life of the leased property, d) the present value of the minimum lease payments is 90% or more of the fair value of the leased asset.	The Company assesses all significant leases for purposes of classification as either operating or capital. At lease inception, if the lease meets any of the four following criteria, the Company will classify it as a capital lease; otherwise it will be treated as an operating lease: a) transfer of ownership to lessee at the end of the lease term, b) bargain purchase option, c) lease term is equal to 75% or more of the estimated economic life of the leased property, d) the present value of the minimum lease payments is 90% or more of the fair value of the leased asset.
Percentage Of Ownership, Significant Influence																			50.00%	20.00%
Income (Loss) from Equity Method Investments, Net of Dividends or Distributions		50,000			40,000			100,000		100,000
Sale Of Equity Interest Percentage							22.76%
Variable Interest Entity, Consolidated, Carrying Amount, Assets																																																																40,500,000
Noncontrolling Interest in Variable Interest Entity																																																																32,500,000
Sale Of Equity,Non Cash Consideration																																																																3,600,000
Sale Of Equity Non Cash Consideration Dividend																																																																900,000
Sale Of Equity, Cash Consideration																																																																300,000
Deconsolidation of a subsidiary as a reduction to paid-in-capital								0		2,972,000																																																							3,100,000
Fair Value Inputs, Discount Rate												7.30%
Line of Credit Facility, Maximum Borrowing Capacity														158,300,000																										318,400,000
Restricted Notes Receivable Interest Income		9,600,000			16,300,000			26,900,000		65,600,000
Concentration Risk, Percentage																									25.50%	27.20%	23.40%	34.10%
Finite lived Intangible Asset Acquired																					2,400,000	15,000,000																																24,200,000	148,600,000	3,900,000	23,700,000		2,700,000	16,600,000
Profit Sharing Liability Fair Value Criteria																	If we would reduce the projected bank borrowings rate by 1.0% and other factors remained unchanged, our profit sharing liability as of the beginning of the period ended September 30, 2013 would have been $254.9 million and we would reducethe gainfrom the change in the fair value of profit sharing liabilities by $32.9 million.
Profit Sharing Liability																	254,900,000	214,300,000
Gain Loss On Change In Fair Value Of Profit Sharing Liability																	32,900,000	8,300,000
Fair Value Measurement With Unobservable Inputs Reconciliation Initial Measurement And Recognition Of Profit Sharing Liability		41,800,000						107,877,000				0
Account Receivable To Customer		$ 1,400,000			$ 10,400,000			$ 1,400,000		$ 10,400,000

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Convertible notes and derivative liabilities (Details Textual) (USD $)	Sep. 30, 2013	Dec. 31, 2012	Dec. 31, 2007
Debt Instrument, Face Amount			$ 40,000,000
Derivative liabilities	$ 0	$ 1,000