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 June 30, 2014

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 x   No  ¨

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  x  No  ¨

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 August 1, 2014, 58,314,688 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 June 30, 2014 and December 31, 2013.	3
	Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income for the Three and Six Months Ended June 30, 2014 and 2013.	4
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2014 and 2013.	5
	Notes to Condensed Consolidated Financial Statements.	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	40
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	61
Item 4.	Controls and Procedures.	61
Part II. OTHER INFORMATION
Item 1.	Legal Proceedings.	62
Item 1A.	Risk Factors.	62
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	62
Item 3.	Defaults Upon Senior Securities.	62
Item 4.	Mine Safety Disclosure.	62
Item 5.	Other Information.	62
Item 6.	Exhibits.	63
Signatures		64

2

PART I – FINANCIAL INFORMATION

ITEM 1. UNAUDITED FINANCIAL STATEMENTS

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(In thousands)

	June 30,			December 31,
	2014			2013
ASSETS
CURRENT ASSETS:
Cash	$	44,749		$	31,967
Restricted cash		448,106			399,333
Notes receivable		36,948			60,054
Restricted notes receivable		106,873			395,589
Loans receivable - related parties		4,540			4,540
Accounts receivable, net		5,277			4,078
Accounts receivable - related parties		5,788			2,942
Other receivables, net		54,804			54,716
Other receivables - related parties		57,983			54,106
Inventories		208,971			212,921
Advances on inventory purchase		58,503			44,897
Advances on inventory purchase - related parties		119,279			83,003
Prepaid expense and other		3,322			1,388
Prepaid taxes		12,489			28,407
Short-term investment		2,763			2,783
TOTAL CURRENT ASSETS		1,170,395			1,380,724
PLANT AND EQUIPMENT, net		1,253,351			1,271,907
OTHER ASSETS:
Advances on equipment purchase		92,133			6,409
Investment in unconsolidated entities		16,710			16,943
Long-term deferred expense		552			668
Intangible assets, net of accumulated amortization		23,333			23,707
TOTAL OTHER ASSETS		132,728			47,727
TOTAL ASSETS	$	2,556,474		$	2,700,358
LIABILITIES AND DEFICIENCY
CURRENT LIABILITIES:
Short term notes payable	$	875,479		$	1,017,830
Accounts payable		418,468			434,979
Accounts payable - related parties		262,103			235,692
Short term loans - bank		201,673			301,917
Short term loans - others		64,395			62,067
Short term loans - related parties		153,996			126,693
Current maturities of long-term loans - related party		62,374			53,013
Other payables and accrued liabilities		48,343			45,653
Other payable - related parties		98,209			94,079
Customer deposits		136,288			87,860
Customer deposits - related parties		142,888			64,881
Deposit due to sales representatives		21,435			24,343
Deposit due to sales representatives - related parties		1,658			1,997
Taxes payable		4,181			4,628
Deferred lease income, current		2,171			2,187
Capital lease obligations, current		6,443			4,321
TOTAL CURRENT LIABILITIES		2,500,104			2,562,140
NON-CURRENT LIABILITIES:
Long-term loans - related party		9,750			19,644
Deferred lease income, noncurrent		73,620			75,257
Capital lease obligations, noncurrent		384,830			375,019
Profit sharing liability at fair value		164,067			162,295
TOTAL NON-CURRENT LIABILITIES		632,267			632,215
TOTAL LIABILITIES		3,132,371			3,194,355
COMMITMENTS AND CONTINGENCIES
DEFICIENCY:
Preferred stock, $0.001 par value, 50,000,000 shares authorized, 3,092,899 shares issued and outstanding as of June 30, 2014 and December 31, 2013		3			3
Common stock, $0.001 par value, 200,000,000 shares authorized, 58,314,688 and 58,234,688 shares issued, 55,842,382 and 55,762,382 shares outstanding as of June 30, 2014 and December 31, 2013, respectively		58			58
Treasury stock, at cost, 2,472,306 shares as of June 30, 2014 and December 31, 2013		(4,199	)		(4,199	)
Paid-in-capital		107,097			106,878
Statutory reserves		6,408			6,243
Accumulated deficits		(469,381	)		(414,798	)
Accumulated other comprehensive income		3,016			729
TOTAL GENERAL STEEL HOLDINGS, INC. DEFICIENCY		(356,998	)		(305,086	)
NONCONTROLLING INTERESTS		(218,899	)		(188,911	)
TOTAL DEFICIENCY		(575,897	)		(493,997	)
TOTAL LIABILITIES AND DEFICIENCY	$	2,556,474		$	2,700,358

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 (LOSS) INCOME

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2014 AND 2013

(UNAUDITED)

(In thousands, except per share data)

	For the three months ended June 30,						For the six months ended June 30,
	2014			2013			2014			2013
SALES	$	508,637		$	517,350		$	1,020,642		$	1,019,781
SALES - RELATED PARTIES		79,376			136,301			161,582			285,161
TOTAL SALES		588,013			653,651			1,182,224			1,304,942
COST OF GOODS SOLD		482,011			540,271			1,012,755			1,038,897
COST OF GOODS SOLD - RELATED PARTIES		77,908			148,916			163,936			297,514
TOTAL COST OF GOODS SOLD		559,919			689,187			1,176,691			1,336,411
GROSS PROFIT (LOSS)		28,094			(35,536	)		5,533			(31,469	)
SELLING, GENERAL AND  ADMINISTRATIVE EXPENSES		(18,849	)		(20,848	)		(39,902	)		(39,803	)
CHANGE IN FAIR VALUE OF PROFIT SHARING LIABILITY		(2,920	)		9,494			(2,969	)		56,273
INCOME (LOSS) FROM OPERATIONS		6,325			(46,890	)		(37,338	)		(14,999	)
OTHER INCOME (EXPENSE)
Interest income		4,066			3,383			7,258			5,822
Finance/interest expense		(26,619	)		(21,216	)		(55,314	)		(46,073	)
Gain (loss) on disposal of equipment and intangible assets		(142	)		(235	)		(96	)		96
Income from equity investments		54			132			67			90
Foreign currency transaction gain		(963	)		98			(1,817	)		126
Lease income		542			539			1,088			1,071
Other non-operating (expense) income, net		302			521			126			790
Other expense, net		(22,760	)		(16,778	)		(48,688	)		(38,078	)
LOSS BEFORE PROVISION FOR INCOME TAXES AND NONCONTROLLING INTEREST		(16,435	)		(63,668	)		(86,026	)		(53,077	)
PROVISION FOR INCOME TAXES
Current		107			105			112			176
Deferred		-			-			-			-
Provision for income taxes		107			105			112			176
NET LOSS		(16,542	)		(63,773	)		(86,138	)		(53,253	)
Less: Net loss attributable to noncontrolling interest		(5,523	)		(23,955	)		(31,555	)		(16,538	)
NET LOSS ATTRIBUTABLE TO GENERAL STEEL HOLDINGS, INC.	$	(11,019	)	$	(39,818	)	$	(54,583	)	$	(36,715	)
NET LOSS	$	(16,542	)	$	(63,773	)	$	(86,138	)	$	(53,253	)
OTHER COMPREHENSIVE LOSS
Foreign currency translation adjustments		(929	)		(7,210	)		3,741			(9,736	)
COMPREHENSIVE LOSS		(17,471	)		(70,983	)		(82,397	)		(62,989	)
Less: Comprehensive loss attributable to noncontrolling interest		(5,875	)		(26,745	)		(30,101	)		(20,290	)
COMPREHENSIVE LOSS ATTRIBUTABLE TO GENERAL STEEL HOLDINGS, INC.	$	(11,596	)	$	(44,238	)	$	(52,296	)	$	(42,699	)
WEIGHTED AVERAGE NUMBER OF SHARES
Basic and Diluted		55,842			54,980			55,828			54,893
LOSS PER SHARE
Basic and Diluted	$	(0.20	)	$	(0.72	)	$	(0.98	)	$	(0.67	)

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 SIX MONTHS ENDED JUNE 30, 2014 AND 2013

(UNAUDITED)

(In thousands)

	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(86,138	)	$	(53,253	)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Depreciation, amortization and depletion		47,788			43,067
Change in fair value of derivative liabilities - warrants		-			(1	)
Change in fair value of profit sharing liability		2,969			(56,273	)
(Gain) loss on disposal of equipment and intangible assets		96			(96	)
Provision for doubtful accounts		(250	)		(169	)
Reservation of mine maintenance fee		278			215
Stock issued for services and compensation		219			480
Amortization of deferred financing cost on capital lease		9,253			10,217
Income from equity investments		(67	)		(90	)
Foreign currency transaction (gain) loss		1,817			(126	)
Deferred lease income		(1,088	)		(1,071	)
Changes in operating assets and liabilities
Notes receivable		45,931			(64,424	)
Accounts receivable		(1,008	)		(33,951	)
Accounts receivable - related parties		(2,875	)		8,969
Other receivables		(307	)		(857	)
Other receivables - related parties		(4,275	)		10,275
Inventories		1,286			38,014
Advances on inventory purchases		(13,968	)		23,215
Advances on inventory purchases - related parties		(36,971	)		(48,019	)
Prepaid expense and other		(1,947	)		(1,115	)
Long-term deferred expense		111			317
Prepaid taxes		15,747			2,742
Accounts payable		(18,050	)		43,122
Accounts payable - related parties		28,204			55,227
Other payables and accrued liabilities		2,637			5,002
Other payables - related parties		4,824			(16,987	)
Customer deposits		49,187			(6,103	)
Customer deposits - related parties		78,667			(14,502	)
Taxes payable		(413	)		(6,639	)
Other noncurrent liabilities		-			1,378
Net cash provided by (used in) operating activities		121,657			(61,436	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Restricted cash		(51,820	)		(49,988	)
Cash proceeds from short term investment		-			80
Cash proceeds from sales of equipments and intangible assets		24			16
Equipment purchase and intangible assets		(112,713	)		(52,350	)
Net cash used in investing activities		(164,509	)		(102,242	)
CASH FLOWS FINANCING ACTIVITIES:
Restricted notes receivable		286,485			244,940
Borrowings on short term notes payable		900,202			812,577
Payments on short term notes payable		(1,035,408	)		(1,001,301	)
Borrowings on short term loans - bank		185,023			141,484
Payments on short term loans - bank		(285,100	)		(83,433	)
Borrowings on short term loan - others		19,949			47,903
Payments on short term loans - others		(25,417	)		(47,055	)
Borrowings on short term loan - related parties		32,576			213,576
Payments on short term loans - related parties		(19,233	)		(124,059	)
Deposits due to sales representatives		(2,736	)		(3,734	)
Deposit due to sales representatives - related parties		(326	)		529
Payments on long-term loans - related party		-			(17,544	)
Net cash provided by financing activities		56,015			183,883
EFFECTS OF EXCHANGE RATE CHANGE IN CASH		(381	)		1,199
INCREASE IN CASH		12,782			21,404
CASH, beginning of period		31,967			46,467
CASH, end of period	$	44,749		$	67,871

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 – Organization and Operations

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 $605.8 million (or approximately RMB 3.7 billion) of the constructed iron and steel making facilities owned by Shaanxi Steel, which includes one 400 m² sintering machine, two 1,280 m³ 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 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, the facilities 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 or loss generated by Longmen Joint Venture decreased from 60% to 36%. However, the overall capacity under the management of Longmen Joint Venture increased by three million tons, or 75%. The Agreement improved 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. There has been no adjustment to the Agreement from its inception to the present time nor intention to make future adjustment by the Company and Shaanxi Steel.

The parties to the Agreement established the Shaanxi Longmen Iron and Steel Unified Management Supervisory Committee ("Supervisory Committee") to ensure that the facilities and related resources are operated and managed according to the stipulations set forth in the Agreement. The Board of Directors of Longmen Joint Venture, of which the Company holds 4 out of 7 seats, requires a simple majority vote and 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 meets certain of the criteria of a capital lease and therefore the assets constructed by Shaanxi Steel are accounted for by Longmen Joint Venture as a capital lease. The profit sharing liability portion of the lease obligation, representing 40% of the pre-tax profit generated by the Asset Pool, is accounted for by Longmen Joint Venture as a derivative financial instrument at fair value. 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 and 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 for a fair presentation of the financial statements have been included. Interim results are not necessarily indicative of results to be expected for the full year. The information included in this Form 10-Q should be read in conjunction with information included in the 2013 annual report on Form 10-K/A filed on August 19, 2014.

6

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(a) Basis of presentation

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

Subsidiary		Percentage 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. (“Yangpu Shengtong”)	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

Prior to November 19, 2013, the Company held a 60.0% equity interest in Tianwu General Steel Material Trading Co., Ltd. (“Tianwu”). 32% interest was held by General Steel (China) and 28% interest was held by Yangpu Shengtong. On November 19, 2013, the Company sold its 28% equity interest of Tianwu held by Yangpu Shengtong to Tianjin Dazhan Industry Co., Ltd., a related party through indirect common ownership, for $13.6 million (RMB 84.3 million) while retaining 32% interest held by General Steel (China). As a result of this transaction, the Company met the criteria under ASC 810-10-40-4 to deconsolidate Tianwu at the disposal date and recognized a gain of $1.0 million in the fourth quarter of 2013 in accordance with ASC 810-10-40-5. At the same time, General Steel (China)’s remaining 32% interest is accounted for as an investment in unconsolidated subsidiaries using the equity method. See Note 2(t) - Investments in unconsolidated entities for details.

(b) Principles of consolidation – subsidiaries

The accompanying 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.

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 of Directors 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. The Supervisory Committee, in which the Company holds 2 out of 4 seats, requires a ¾ majority vote, while the Board of Directors, on 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. 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. If the Unified Management Agreement cannot be enforced, the Company would not consolidate Longmen Joint Venture as a VIE. However, the current PRC legal system has not limited the Company’s ability to enforce the Unified Management Agreement nor does the Company believe it is likely to do so in the future. The Company makes an 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:

	June 30, 2014			December 31, 2013
	(in thousands)			(in thousands)
Current assets	$	990,397		$	1,282,054
Plant and equipment, net		1,245,144			1,262,144
Other noncurrent assets		114,372			29,014
Total assets		2,349,913			2,573,212
Total liabilities		(2,891,359	)		(3,040,879	)
Net liabilities	$	(541,446	)	$	(467,667	)

VIE and its subsidiaries’ liabilities consist of the following:

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Current liabilities:
Short term notes payable	$	864,104	$	988,364
Accounts payable		409,550		393,816
Accounts payable - related parties		261,437		235,116
Short term loans - bank		149,348		267,688
Short term loans - others		58,218		55,844
Short term loans - related parties		152,550		125,236
Current maturities of long-term loans – related party		62,374		56,614
Other payables and accrued liabilities		39,685		37, 028
Other payables - related parties		93,742		88,914
Customer deposits		66,595		87,661
Customer deposits - related parties		45,589		18,359
Deposit due to sales representatives		21,435		24,343
Deposit due to sales representatives – related parties		1,658		1,997
Taxes payable		2,930		3,357
Deferred lease income		2,171		2,187
Capital lease obligations, current		6,443		4,321
Intercompany payable to be eliminated		21,263		21,420
Total current liabilities		2,259,092		2,412,265
Non-current liabilities:
Long term loans - related parties		9,750		16,043
Deferred lease income - noncurrent		73,620		75,257
Capital lease obligations, noncurrent		384,830		375,019
Profit sharing liability at fair value		164,067		162,295
Total non-current liabilities		632,267		628,614
Total liabilities of consolidated VIE	$	2,891,359	$	3,040,879

8

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

	Three months ended June 30, 2014			Three months ended June 30, 2013
	(in thousands)			(in thousands)
Sales	$	587,314		$	650,741
Gross profit (loss)	$	28,229		$	(36,193	)
Income (loss) from operations	$	8,128		$	(44,684	)
Net loss attributable to controlling interest	$	(8,077	)	$	(34,944	)
	Six months ended June 30, 2014			Six months ended June 30, 2013
	(in thousands)			(in thousands)
Sales	$	1,181,328		$	1,297,489
Gross profit (loss)	$	6,010		$	(31,826	)
Loss from operations	$	(31,166	)	$	(9,747	)
Net loss attributable to controlling interest	$	(46,111	)	$	(26,619	)

Longmen Joint Venture has two 100% owned subsidiaries, Yuxin Trading Co., Ltd. (“Yuxin”) and Yuteng Trading Co., Ltd. (“Yuteng”). Longmen Joint Venture also 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 invested in by Longmen Joint Venture in June 2007 and July 2008, respectively. 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. The assets, liabilities and the operating results of Hualong are immaterial to the Company’s consolidated financial statements as of June 30, 2014 and December 31, 2013, respectively, and for the three and six months ended June 30, 2014 and 2013, respectively.

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 assets, liabilities and the operating results of Huatianyulong are immaterial to the Company’s consolidated financial statements as of June 30, 2014 and December 31, 2013, respectively, and for the three and six months ended June 30, 2014 and 2013, respectively.

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 majority voting rights in each entity, and thereby, the power of control, to Longmen Joint Venture.

9

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(d) Liquidity

The Company’s accounts have been prepared under the 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 options (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 the 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 June 30, 2014 and December 31, 2013 were (5.4) and (6.5), respectively. As of June 30, 2014, the Company’s current liabilities exceed current assets by $1.3 billion.

Longmen Joint Venture, as the most important entity of the Company, accounted for a majority of the 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, as well as its ability to obtain external financial supports, including but not limited to lines of credit from banks and vendor financing. If Longmen Joint Venture does not maintain a sufficient level of financial support by renewing its financing terms with existing financing sources or obtaining new sources of financial support, there may be an immediate negative impact on the Company’s operations and its ability to continue as a going concern. Longmen Joint Venture has obtained different types of financial support, which are listed below by category:

Lines of credit

The Company has lines of credit from the listed major banks totaling $147.9 million with expiration dates ranging from June 16, 2015 to November 28, 2015.

Banks	Amount of Line of Credit (in millions)		Repayment Date
China Minsheng Bank		97.5	November 28, 2015
China CITIC Bank		32.5	June 16, 2015
Bank of Communication		17.9	July 17, 2015
Total	$	147.9

Management expects the above lines of credit will be extended after the repayment dates.

As of the date of this report, the Company utilized $50.4 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 $811.5 million with the following companies:

Company	Financing Period	Financing Amount (in millions)
Company A – related party	July 30, 2014 – July 30, 2019	$	243.8
Company B – third party	January 22, 2014 – January 22, 2017		162.5
Company C – third party	October 1, 2013 – March 31, 2016		487.5
Total		$	893.8

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 many years. On July 30, 2014, Company A signed a five-year agreement with Longmen Joint Venture to finance its coke purchases up to $243.8 million. Company B signed a three-year agreement with Longmen Joint Venture on January 22, 2014 to finance its coke purchases up to $162.5 million. According to the above signed agreements, both Company A and B will not demand any cash payments during their respective financing periods. As of the date of this report, our payables to Company A and Company B were approximately $68.2 million and $65.4 million, respectively.

10

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Company C is a Fortune 500 Company. On June 28, 2013, Company C signed an agreement with Longmen Joint Venture to finance Longmen Joint Venture’s purchase of iron ore for an amount up to $487.5 million to commence on October 1, 2013 and end on March 31, 2015. On August 1, 2014, Company C signed an extension agreement with the Company and extended the financing terms to March 31, 2016. 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. As of the date of this report, our payable to Company C is approximately $1.9 million.

Other financing

On February 20, 2014, March 5, 2014, April 22, 2014 and April 23, 2014 Longmen Joint Venture signed payment extension agreements with each company listed below. In total, Longmen Joint Venture can obtain $362.0 million in financial support from two-year and three-year balancing payment extensions granted by the following five companies:

Company	Financing Period	Financing Amount (in millions)
Company D – related party	April 22, 2014 – April 22, 2017	$	81.3
Company E – related party	April 23, 2014 – April 23, 2017		86.0
Company F – related party	April 22, 2014 – April 22, 2017		81.3
Company G – related party	March 5, 2014 – March 5, 2016		56.9
Company H – related party	March 5, 2014 – March 5, 2016		56.9
Total		$	362.4

As of the date of this report, our payables to Company D, Company E, Company F, Company G and Company H are approximately $16.3 million, $21.5 million, $19.0 million, $9.9 million and $1.0 million, 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 June 30, 2014, Longmen Joint Venture has collected a total amount of $23.1 million. Historically, this amount is quite stable and we do not expect a big fluctuation in this amount for the next twelve months from June 30, 2014 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 June 30, 2015. The detailed breakdown of Longmen Joint Venture’s estimated cash flows are listed below.

	Cash inflow (outflow) (in millions)
	For the twelve months ending June 30, 2015
Current liabilities over current assets (excluding deferred lease income) as of June 30, 2014 (unaudited)	$	(1,327.5	)
Projected cash financing and outflows:
Cash provided by lines of credit from banks		147.9
Cash provided by vendor financing		893.8
Cash provided by other financing		362.4
Cash provided by sales representatives		23.1
Cash projected to be used in operations in the twelve months ending June 30, 2015		(28.8	)
Cash projected to be used for financing costs in the twelve months ending June 30, 2015		(63.7	)
Net projected change in cash for the twelve months ending June 30, 2015	$	7.2

11

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

As a result, the consolidated financial statements as of June 30, 2014 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 consolidated financial statements and footnotes. Significant accounting estimates reflected in the Company’s consolidated financial statements include the fair value of the profit sharing liability, the useful lives of and impairment of property, plant and equipment, potential losses on uncollectible receivables, the allowance for inventory valuation, the interest rate used in the financing sales, the fair value of the assets recorded under capital leases and the present value of the net minimum lease payments of the capital leases. 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 price fluctuation of raw materials and energy prices as part of its normal operations. The Company does not utilize 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 June 30, 2014 and December 31, 2013 amounted to $ 492.9 million and $ 431.3 million, including $ 0.6 million and $ 2.0 million that were deposited in Shaanxi Coal and Chemical Industry Group Financial Co., Ltd., a related party, respectively. As of June 30, 2014, $ 0.1 million cash in the bank was covered by insurance. The Company has not experienced any losses in its bank accounts and deposits its cash in a number of different banks to minimize its exposure to credit risk.

The Company’s five major customers are all distributors and collectively represented 31.8% and 24.4% of the Company’s total sales for the three and six months ended June 30, 2014, respectively. None of the five major customers individually accounted for more than 10% of the total sales for the three months or the six months ended June 30, 2014. The Company’s five major customers represented 27.8% and 23.3% of the Company’s total sales for the three months and six months ended June 30, 2013, respectively. None of the five major customers individually accounted for more than 10% of the total sales for the three months or the six months ended June 30, 2013. None of the five major customers has accounts receivable, including related parties, with the Company as of June 30, 2014 and December 31, 2013, respectively.

For the three and six months ended June 30, 2014, the Company purchased 47.4% and 43.8% 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 months ended June 30, 2014 and one of the five major suppliers individually accounted for 12.7% of the total purchases for the six months ended June 30, 2014. The purchases from the five major suppliers represented 45.0% and 38.4% of the Company’s total purchases for the three months and six months ended June 30, 2013, respectively. Two of the five major suppliers individually accounted for 15.6% and 10.7% of the total purchases for the three months ended June 30, 2013, respectively, and one of the five major suppliers individually accounted for 11.6% of the total purchases for the six months ended June 30, 2013. These five vendors accounted for 38.3% and 29.1% of total accounts payable, including related parties, as of June 30, 2014 and December 31, 2013, respectively. None of the five major suppliers individually accounted for more than 10% of total accounts payable as June 30, 2014 and and December 31, 2013.

(g) Foreign currency translation and other comprehensive income

The reporting currency of the Company is the U.S. dollar. The Company’s subsidiaries and VIE 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 statements of operations 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.

12

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Translation adjustments included in accumulated other comprehensive income amounted to $3.0 million and $0.7 million as of June 30, 2014 and December 31, 2013, respectively. The balance sheet amounts, with the exception of equity, at June 30, 2014 and December 31, 2013 were translated at 6.15 RMB and 6.11 RMB to $1.00, respectively. The equity accounts were stated at their historical rate. The average translation rates applied to the statements of operations for the three months ended June 30, 2014 and 2013 were 6.16 RMB and 6.20 RMB, respectively. The average translation rates applied to the statements of operations for the six months ended June 30, 2014 and 2013 were 6.14 RMB and 6.24 RMB, respectively. Cash flows are also translated at average translation rates for the periods; as a result,, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances in 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 standard 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 investments, 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 carrying value of the long term loans-related party approximates its fair value as of the reporting date as their stated interest rates approximate current rates available.

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.

The Company analyzes all financial instruments with features of both liabilities and equity, pursuant to which warrants previously issued by the Company were required to be recorded as a liability at fair value and marked to market each reporting period. The warrants were accounted for as derivative liabilities and recorded at their fair value, with the change in fair value charged or credited to income each period.  The warrants expired unexercised on May 13, 2013. Prior to their expiration, the fair value of the warrants was estimated using a binomial lattice model, using level 3 inputs.

As described in Note 15 - Capital lease obligations, payments related to the capital lease of the Asset Pool consist of two components: (1) a fixed monthly payment of $2.3 million (RMB 14.6 million), based on Shaanxi Steel’s cost to construct the assets, to be paid for the 20 year term of the Unified Management Agreement; and (2) 40% of any remaining pre-tax profits from the Asset Pool, which includes Longmen Joint Venture and the constructed iron and steel making facilities. The aforementioned profit sharing component meets the definition of a derivative instrument under ASC 815-10-15-83 and, accordingly, the profit sharing liability is accounted for separately as a derivative liability. It was recognized initially at its estimated fair value at inception. The estimated fair value is adjusted each reporting period, with changes in the estimated fair value of the profit sharing liability charged or credited to operating income each period.

The Company determines the fair value of the profit sharing liability using Level 3 inputs by considering the present value of Longmen Joint Venture’s projected profits/losses, discounted based on our average borrowing rate, which is currently 7.3%.

The fair value of the profit sharing liability will change each period as a result of (a) any changes in our estimate of Longmen Joint Venture’s projected profits/losses over the remaining term of the Agreement, (b) any change in the discount rate used, based on changes in our current or expected borrowing rate, (c) the change in fair value related to the passage of time and change in the number of future periods over which the present value of future cash flows is estimated and (d) any difference between the previously estimated operating results for the current period and actual results.

13

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Each period, the Company considers whether the discount rate based on the Company’s average borrowing rate should be adjusted based upon the current and expected future financial condition of the Company. To date, the Company has not considered any adjustment to be necessary based upon, but not limited to, the following assumptions:

· because the joint venture partner of Longmen Joint Venture is a state-owned enterprise with an excellent credit history, PRC banks grant similar credit treatment to Longmen Joint Venture in terms of credit availability

· the current average borrowing rate of enterprises in the steel industry in the PRC is similar to this borrowing rate

· the current new/renewal borrowing rates of the Company’s bank loans are similar to prior periods

· the People’s Bank of China has not recently adjusted any borrowing rate

· PRC bank interest rates are not industry specific. The downtrend in the steel industry did not materially impact the bank borrowing rates for steel companies

· the bank interest rates are assessed by each individual bank and governed by the Chinese banking regulatory bodies. Reports from credit rating research firms are not commonly used by PRC banks

The projected profits/losses in Longmen Joint Venture are based upon, but not limited to, the following assumptions:

· 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

· interest rate index

· gross national product index

· industry index

· government policy

From inception to December 31, 2012, the assumptions underlying the estimated fair value did not change significantly. Beginning in the first quarter of 2013, the assumptions related to unit selling prices and costs were revised, resulting in a reduction of the estimated profit sharing liability. These assumptions were further revised during 2013. The above assumptions were again reviewed by the Company at June 30, 2014 but no major change was deemed necessary to the assumptions used at December 31, 2013. For the six months ended June 30, 2014, the Company recognized a loss on the change in the fair value of the profit sharing liability of $2.9 million due to a $5.7 million reduction in the present value discount offset by a $2.8 million gain resulting from the Asset Pool’s operating results for the six months ended June 30, 2014 being slightly less favorable than previously estimated as of December 31, 2013.

The estimated fair value of the profit sharing liability at June 30, 2014 is $164.1 million. Changes in any of the assumptions used to estimate the fair value of the profit sharing liability will change the liability accordingly. If we were to reduce the projected bank borrowing rate used to discount the liability to a present value by 1.0% and other factors remained unchanged, our profit sharing liability as of June 30, 2014 would have been $187.3 million and we would increase the loss from the change in the fair value of the profit sharing liability by $23.2 million. If we were to 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 June 30, 2014 would have been $162.2 million and we would decrease the loss from the change in the fair value of the profit sharing liability by $1.9 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 June 30, 2014:

(in thousands)	Carrying Value as of June 30, 2014		Fair Value Measurements at June 30, 2014 Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Profit sharing liability	$	164,067	$	-	$	-	$	164,067
Total	$	164,067	$	-	$	-	$	164,067

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, 2013:

14

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(in thousands)	Carrying Value as of December 31, 2013		Fair Value Measurements at December 31, 2013 Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Profit sharing liability	$	162,295	$	-	$	-	$	162,295
Total	$	162,295	$	-	$	-	$	162,295

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 six months ended June 30, 2014 and for the year ended December 31, 2013:

	June 30, 2014			December 31, 2013
	(in thousands)			(in thousands)
Beginning balance	$	162,295		$	328,828
Change in fair value of profit sharing liability:
Change in estimate of future operating profits		-			(174,821	)
Change in discount rate		-			-
Change in the number of future periods over which the present value of future cash flows is estimated		5,778			16,872
Difference between the previously estimated operating results for the current period and actual results		(2,809	)		(16,620	)
Change in derivative liabilities - warrants		-			1
Exchange rate effect		(1,197	)		8,035
Ending balance	$	164,067		$	162,295

Except for the derivative liabilities related to the profit sharing liability and to the warrants issued by the Company, which expired on May 13, 2013, the Company did not identify any other assets or liabilities that are required to be presented on the balance sheet at fair value.

(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 requests 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 expense for early submission requests for payment for the three months ended June 30, 2014 and 2013 amounted to $12.8 million and $6.5 million, respectively, and amounted to $26.9 million and $17.3 million, respectively, for the six months ended June 30, 2014 and 2013.

(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	10-20 Years
Other equipment	5 Years
Transportation equipment	5 Years

15

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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 betterments 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 their 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.

(k) 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 June 30, 2014, 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 has a twenty-year term.

Long Steel Group contributed land use rights for a total amount of $24.1 million (RMB 148.3 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 in
	(in thousands)
General Steel (China)	$	3,856		2050 & 2053
Longmen Joint Venture	$	24,097		2048 & 2052
Maoming Hengda	$	2,697		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 rights amounting to $2.4 million (RMB 15.0 million), which is amortized over the estimated recoverable reserve of 4.2 million tons.

(l) 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.

16

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The table below summarizes Longmen Joint Venture’s investment holdings as of June 30, 2014 and December 31, 2013.

Unconsolidated entities	Year acquired		June 30, 2014 Net investment (In thousands)		Owned %		December 31, 2013 Net investment (In thousands)		Owned %
Xi’an Delong Powder Engineering Materials Co., Ltd.		2007	$	1,098		24.1	$	1,215		24.1

The table below summarizes General Steel (China)’s investment holding (see Note 2(a) - Basis of presentation) as of June 30, 2014 and December 31, 2013.

Unconsolidated entities	Year  acquired		June 30, 2014  Net investment  (In thousands)		Owned %		December 31, 2013  Net investment  (In thousands)		Owned  %
Tianwu General Steel Material Trading Co., Ltd.		2010	$	15,612		32.0	$	15,728		32.0

Total investment income (loss) in unconsolidated subsidiaries amounted to $0.05 million and $0.13 million for the three months ended June 30, 2014 and 2013, respectively, and $0.06 million and $0.09 million for the six months ended June 30, 2014 and 2013, respectively, which was included in “Income from equity investments” in the condensed consolidated statements of operations and comprehensive (loss) income.

(m) Revenue recognition

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

The Company infrequently engages in trading transactions in which the Company acts as an agent between the suppliers and the customers. The trading arrangements are such that the suppliers are the primary obligors, the Company does not have any general inventory risk, physical inventory loss risk or credit risk, and the Company does not have latitude in establishing price. Sales and cost of goods sold from these trading arrangements are recorded at the net amount retained in accordance with ASC 605-45.

(n) Recently issued accounting pronouncements

In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. The new guidance also requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. The amendments in the ASU are effective in the first quarter of 2015 for public organizations with calendar year ends. Early adoption is permitted. The Company does not expect the adoption of this guidance will have a significant impact on the Company’s financial position and results of operations.

17

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606. This Update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards. The guidance in this Update supersedes the revenue recognition requirements in Topic 605, Revenue Recognition and most industry-specific guidance. The core principle of the guidance is that an entity should recognize revenue to illustrate the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance also includes a cohesive set of disclosure requirements that will provide users of financial statements with comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from a reporting organization’s contracts with customers. This ASU is effective retrospectively for fiscal years, and interim periods within those years beginning after December 15, 2016 for public companies and 2017 for non-public entities. Management is evaluating the effect, if any, on the Company’s financial position and results of operations.

(o) Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications have no effect on the accompanying condensed 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:

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Loan to Teamlink Investment Co., Ltd; due in June, July and December 2014; interest rate is 4.75%	$	4,540	$	4,540
Total loans receivable – related parties	$	4,540	$	4,540

See Note 18 “Related party transactions and balances” for the nature of the relationship of related parties.

Total interest income for the loans amounted to $0.05 million and $0.07 million for the three months ended June 30, 2014 and 2013, respectively.

Total interest income for the loans amounted to $0.1 million and $0.1 million for the six months ended June 30, 2014 and 2013, respectively.

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

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

	June 30, 2014			December 31, 2013
	(in thousands)			(in thousands)
Accounts receivable	$	6,078		$	5,131
Less: allowance for doubtful accounts		(801	)		(1,053	)
Accounts receivable – related parties		5,788			2,942
Net accounts receivable	$	11,065		$	7,020

Changes in the allowance for doubtful accounts are as follows:

	June 30, 2014			December 31, 2013
	(in thousands)			(in thousands)
Beginning balance	$	1,053		$	1,367
Charge to expense		-			96
Less: recovery		(244	)		(449	)
Exchange rate effect		(8	)		39
Ending balance	$	801		$	1,053

18

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 5 – Inventories

Inventories consist of the following:

	June 30, 2014			December 31, 2013
	(in thousands)			(in thousands)
Supplies	$	23,451		$	21,040
Raw materials		147,780			164,301
Finished goods		47,713			42,977
Less: allowance for inventory valuation		(9,973	)		(15,397	)
Total inventories	$	208,971		$	212,921

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 June 30, 2014 and December 31, 2013, the Company had provided allowance for inventory valuation in the amounts of $10.0 million and $15.4 million, respectively.

Changes in the allowance for inventory valuation are as follows:

	June 30, 2014			December 31, 2013
	(in thousands)			(in thousands)
Beginning balance	$	15,397		$	9,585
Addition		9,996			15,194
Less: write-off		(15,319	)		(9,757	)
Exchange rate effect		(101	)		375
Ending balance	$	9,973		$	15,397

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 $177.8 million and $127.9 million as of June 30, 2014 and December 31, 2013, respectively.

Note 7 – Plant and equipment, net

Plant and equipment consist of the following:

	June 30, 2014			December 31, 2013
	(in thousands)			(in thousands)
Buildings and improvements	$	280,272		$	274,402
Machinery		658,159			667,093
Machinery under capital lease		625,196			623,895
Transportation and other equipment		23,322			22,991
Construction in progress		38,736			11,412
Subtotal		1,625,685			1,599,793
Less: accumulated depreciation		(372,334	)		(327,886	)
Total	$	1,253,351		$	1,271,907

19

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Construction in progress consisted of the following as of June 30, 2014:

Construction in progress description	Value		Completion		Estimated additional cost to complete
	(In thousands)		date		(In thousands)
Factory wall remodel		1,022	July 2014		77
Equipment updates		109	July 2014		3,206
Sintering machine construction		4,830	November 2014		140,122
#5 blast furnace construction		22,970	December 2014		150,155
Electrical substation construction		13	August 2014		24,419
Reconstruction of miscellaneous factory buildings		5,547	October 2014		4,337
Project materials		2,133			-
Others		2,112			-
Total	$	38,736		$	326,316

The Company 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. During 2013 and 2014, Longmen Joint Venture entered into a number of capital lease agreements for energy-saving equipment installed throughout the steel production line. The Company is obligated under the capital lease for the equipment upon the confirmation of the energy-saving rate between the Company and its vendors.

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

	June 30, 2014			December 31, 2013
	(in thousands)			(in thousands)
Machinery	$	625,196		$	623,895
Less: accumulated depreciation		(92,037	)		(77,086	)
Carrying value of leased assets	$	533,159		$	546,809

The Company assessed the recoverability of all of its remaining long lived assets at June 30, 2014 and December 31, 2013, respectively, and such assessment did not result in any impairment charges.

Depreciation expense for the three months ended June 30, 2014 and 2013 amounted to $23.2 million and $21.4 million, respectively, and for the six months ended June 30, 2014 and 2013, amounted to $47.3 and $42.5 million, respectively. These amounts include depreciation of assets held under capital leases for the three months ended June 30, 2014 and 2013, which amounted to $7.7 million and $7.1 million, respectively, and for the six months ended June 30, 2014 and 2013, amounted to $15.6 and $14.1 million, respectively.

Note 8 – Intangible assets, net

Intangible assets consist of the following:

	June 30, 2014			December 31, 2013
	(in thousands)			(in thousands)
Land use rights	$	30,650		$	30,884
Mining right		2,441			2,459
Software		1,049			743
Subtotal		34,140			34,086
Less:
Accumulated amortization – land use rights		(8,767	)		(8,498	)
Accumulated amortization – mining right		(1,363	)		(1,320	)
Accumulated amortization – software		(677	)		(561	)
Subtotal		(10,807	)		(10,379	)
Intangible assets, net	$	23,333		$	23,707

20

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The gross amount of the intangible assets amounted to $34.1 million and $34.1 million as of June 30, 2014 and December 31, 2013, respectively. The remaining weighted average amortization period is 33.1 years as of June 30, 2014.

Total amortization expense for the three months ended June 30, 2014 and 2013 amounted to $0.3 million and $0.3 million, respectively, and for the six months ended June 30, 2014 and 2013, amounted to $0.5 million and $0.5 million, respectively.

Total depletion expense for the three months ended June 30, 2014 and 2013 amounted to $0.04 million and $0.02 million, respectively, and for the six months ended June 30, 2014 and 2013, amounted to $0.05 million and $0.1 million, respectively.

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

Year ending	Estimated amortization and depletion expenses		Gross carrying amount
	(in thousands)		(in thousands)
June 30, 2015	$	1,024		22,309
June 30, 2016		1,024		21,285
June 30, 2017		1,024		20,261
June 30, 2018		1,024		19,237
June 30, 2019		1,024		18,213
Thereafter		18,213		-
Total	$	23,333

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 $430.2 million and $399.4 million as of June 30, 2014 and December 31, 2013, respectively. Restricted notes receivable as a guarantee for the notes payable amounted to $51.0 million and $231.7 million as of June 30, 2014 and December 31, 2013, respectively.

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

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
General Steel (China): Notes payable to various banks in China, due various dates from July to December 2014. Restricted cash required of $11.4 million and $16.4 million as of June 30, 2014 and December 31, 2013, respectively; guaranteed by third parties. These notes payable were either repaid or renewed subsequently on the due dates.	$	11,375	$	29,466
Longmen Joint Venture: Notes payable to various banks in China, due various dates from July to December 2014. $418.8 million restricted cash and $51.0 million notes receivable are secured for notes payable as of June 30, 2014, and comparatively $383.0 million restricted cash and $231.7 million notes receivable secured as of December 31, 2013, respectively; some notes are further guaranteed by third parties. These notes payable were either repaid or renewed subsequently on the due dates.		864,104		988,364
Total short-term notes payable	$	875,479	$	1,017,830

21

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
General Steel (China): Loans from various banks in China, due various dates from August 2014 to June 2015. Weighted average interest rate was 7.1% per annum and 7.2% per annum as of June 30, 2014 and December 31, 2013, respectively; some are guaranteed by third parties and related parties. $8.1 million and $0 restricted cash were secured for the loans as of June 30, 2014 and December 31, 2013, respectively; These loans were either repaid or renewed subsequently on the due dates.	$	52,325	$	34,229
Longmen Joint Venture: Loans from various banks in China, due various dates from August 2014 to June 2015. Weighted average interest rate was 6.1% per annum and 6.3% per annum as of June 30, 2014 and December 31, 2013, respectively; some are guaranteed by third parties, accounts receivable, restricted cash or notes receivables. $56.1 million and $163.9 million restricted notes receivable were secured for the loans as of June 30, 2014 and December 31, 2013, respectively; $5.9 million and $0 restricted cash were secured for the loans as of June 30, 2014 and December 31, 2013, respectively; These loans were either repaid or renewed subsequently on the due dates.		149,348		267,688
Total short-term loans - bank	$	201,673	$	301,917

As of June 30, 2014 and December 31, 2013, the Company had not met its financial covenants stipulated by certain loan agreements related to the Company’s debt to asset ratio. As of June 30, 2014, two of General Steel (China)’s bank loans contained financial covenants stipulating debt to asset ratios below 20%. However, as of June 30, 2014, General Steel (China)’s debt to asset ratio was 95.4%. As of December 31, 2013, three of General Steel (China)’s bank loans contained financial covenants stipulating debt to asset ratios below 20% and 70%. However, as of December 31, 2013, General Steel (China)’s debt to asset ratio was 89.7%.

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 June 30, 2014 and December 31, 2013 was $5.2 million and $6.4 million, respectively. According to the Company’s short term loan agreements, the banks have the right to request 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

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Longmen Joint Venture: Loans from various unrelated companies and individuals, due various dates from July to December 2014, and weighted average interest rate was 5.6% per annum and 5.2% per annum as of June 30, 2014 and December 31, 2013, respectively. These loans were either repaid or renewed subsequently on the due dates.	$	17,099	$	22,720
Longmen Joint Venture: Loans from financing sales.		41,119		33,124
Maoming Hengda: Loans from one unrelated party and one related party, due on demand, none interest bearing.		6,177		6,223
Total short-term loans – others	$	64,395	$	62,067

22

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Company had various loans from unrelated companies amounting to $64.4 million and $62.1 million as of June 30, 2014 and December 31, 2013, respectively. Of the $64.4 million, $6.2 million of loans carry no interest, $41.1 million of financing sales are subject to interest rates ranging between 4.6% and 9.6%, and the remaining $17.1 million are subject to interest rates ranging from 5.0% to 5.8%. 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 Longmen Joint Venture’s subsidiaries, 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 4.6% to 9.6% 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 4.6% to 9.6% 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 consolidated financial statements.

Total financing sales for the three months ended June 30, 2014 and 2013 amounted to $229.1 million and $188.1 million, respectively, and for the six months ended June 30, 2014 and 2013, amounted to $459.6 million and $353.3 million, respectively, which are eliminated in the Company’s consolidated financial statements. The financial cost related to financing sales for the three months ended June 30, 2014 and 2013 amounted to $0.8 million and $3.1 million, respectively, and for the six months ended June 30, 2014 and 2013, amounted to $1.7 million and $3.1 million, respectively.

Short term loans due to related parties

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
General Steel China: Loans from Yangpu Capital Automobile, due on demand, and interest rate is 10% per annum.	$	1,446	$	1,458
Longmen Joint Venture: Loan from Shaanxi Coal and Chemical Industry Group Co., Ltd., due on demand, and interest rate is 7.0% per annum.		8,822		28,216
Longmen Joint Venture: Loan from Shaanxi Steel Group due on various dates from November 2014 to June 2015, and interest rate is 6.6% per annum.		81,250		49,110
Longmen Joint Venture: Loans from financing sales.		62,478		47,909
Total short-term loans - related parties	$	153,996	$	126,693

Long-term loans due to related party

	June 30, 2014			December 31, 2013
	(in thousands)			(in thousands)
Longmen Joint Venture: Loans from Shaanxi Steel Group, due on various dates through November 2015 and interest rate is 5.6% per annum.	$	72,124		$	72,657
Less: Current maturities of long-term loans – related party		(62,374	)		(53,013	)
Long-term loans - related party	$	9,750		$	19,644

Total interest expense, net of capitalized interest, amounted to $8.2 million and $10.5 million for the three months ended June 30, 2014 and 2013, respectively.

23

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Total interest expense, net of capitalized interest, amounted to $17.7 million and $18.5 million for the six months ended June 30, 2014 and 2013, respectively.

Capitalized interest included in construction in progress amounted to $0.2 million and $0.6 million for the three months ended June 30, 2014 and 2013, respectively. 

Capitalized interest included in construction in progress amounted to $0.8 million and $0.8 million for the six months ended June 30, 2014 and 2013, 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 June 30, 2014 and December 31 2013, customer deposits amounted to $279.2 million and $152.7 million, respectively, including deposits received from related parties, which amounted to $142.9 million and $64.9 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 $23.1 million and $26.3 million in deposits due to sales representatives, including deposits due to related parties, as of June 30, 2014 and December 31, 2013, respectively.

Note 12 – Warrants

The Company previously had 3,900,871 common stock warrants outstanding, which were issued in connection with $40 million of convertible notes issued by the Company in 2007. The warrants, which were accounted for as a derivative liability at fair value, expired unexercised on May 13, 2013.  

Note 13 - Supplemental disclosure of cash flow information

Interest paid, net of amounts capitalized, amounted to $12.4 million and $7.6 million for the six months ended June 30, 2014 and 2013, respectively.

The Company paid income taxes of $0.1 million and $0.2 million during the six months ended June 30, 2014 and 2013, respectively.

During the six months ended June 30, 2014 and 2013, the Company had receivables of $(0.01) million and $1.0 million, respectively, as a result of the disposal of equipment that have not been collected.

During the six months ended June 30, 2014 and 2013, the Company used $1.1 million and $19.0 million of inventory, respectively, in plant and equipment construction.

The Company had $2.3 million notes receivable from financing sales loans to be converted to cash as of June 30, 2014.

During the six months ended June 30, 2014, the Company incurred $4.7 million in accounts payable for the purchase of equipment and construction in progress.

During the six months ended June 30, 2014 and 2013, one of the Company’s unconsolidated entities declared a dividend and the Company is entitled to a dividend of $0.2 million and $0.2 million, respectively, which has not yet been collected.

During the six months ended June 30, 2014, the Company converted $(0.05) million of equipment into inventory production.

During the six months ended June 30, 2014, the Company acquired $5.9 million of equipment through capital leases.

24

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 14 - Deferred lease income

To compensate the Company for costs and economic losses incurred during construction of the iron and steel making facilities owned by Shaanxi Steel and which are leased by the Longmen Joint Venture, 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 $14.5 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 $7.1 million (RMB 43.9 million) was deferred and is being 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 June 30, 2014 and 2013, the Company recognized $0.5 million and $0.5 million, respectively. For the six months ended June 30, 2014 and 2013, the Company recognized $1.1 million and $1.1 million, respectively. As of June 30, 2014 and December 31, 2013, the balance of deferred lease income amounted to $75.8 million and $77.4 million, respectively, of which $2.2 million and $2.2 million represents amounts to be amortized within one year. See Note 18 – Related party transactions and balances (m) – Deferred lease income for details.

Note 15 - Capital lease obligations

Iron and steel production facilities

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 of $2.3 million (RMB 14.6 million), based on Shaanxi Steel’s cost to construct the assets, 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 February 2014, Shaanxi Steel agreed that it will not demand capital lease payments from Longmen Joint Venture until February 2017. The profit sharing component does not meet the definition of contingent rent because it is based on future revenue and was therefore considered part of the financing for the capital leased assets. The initial fair value of the profit sharing liability was included in determining the value of the leased assets at inception. The profit sharing liability is accounted for separately from the monthly lease payments and is accounted for as a derivative liability at fair value, with changes in the fair value charged or credited to income each period. See Note 2(h) – “Financial instruments” and Note 16 – “Profit sharing liability”.

Energy-saving equipment

During 2013 and 2014, the Company’s subsidiary, Longmen Joint Venture, entered into capital lease agreements for energy-saving equipment to be installed throughout the production chain. Under these agreements, Longmen Joint Venture uses the energy-saving equipment for which the vendors are responsible for the design, purchase, installation, and on-site testing, as well as the ownership rights to the equipment during the lease periods. The lease periods, which vary between four to six years, begin upon the completion of the equipment installation, testing, and the issuance of the energy-saving rate reports to be agreed upon by both the vendors and Longmen Joint Venture. As the ownership rights of the equipment transfer to Longmen Joint Venture at the end of the lease periods, these agreements are accounted for as capital leases.

The minimum lease payments are based on the energy cost saved during the lease periods, which is determined by the estimated annual equipment operating hours per the lease agreements. If the actual annual equipment operating hours are less than the estimated amount, the lease periods may be extended, subject to further negotiation and agreement between the Company and the vendors. If the actual annual equipment operating hours exceed the estimated amount, the Company is obligated to make additional lease payments based on the additional energy cost saved during the lease period and will recognize the additional lease payments as contingent rent expense. For the three and six months ended June 30, 2014 and 2013, no contingent rent expense was incurred under these lease agreements.

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 obligations for the next five years as of June 30, 2014:

Year ending June 30,	Capital Lease Obligations Minimum Lease Payments
	(in thousands)
2015	$	7,567
2016		5,804
2017		181,884
2018		33,280
2019		30,108
Thereafter		338,666
Total minimum lease payments		597,309
Less: amounts representing interest		(206,036	)
Ending balance	$	391,273

The above amounts do not include the profit sharing liability, which is accounted for separately as a derivative instrument at fair value.

Interest expense for the three months ended June 30, 2014 and 2013 on the capital lease obligations was $5.7 million and $5.1 million, respectively.

Interest expense for the six months ended June 30, 2014 and 2013 on the capital lease obligations was $10.8 million and $10.2 million, respectively.

Note 16 – Profit sharing liability

The profit sharing liability component of the capital lease obligation was 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. The profit sharing liability is accounted for separately from the fixed portion of the capital lease obligation (see Note 15 - “Capital lease obligation”) and is accounted for as a derivative instrument in accordance with ASC 815-10-15-83. The estimated fair value of the profit sharing liability is reassessed at the end of each reporting period, with any change in fair value charged or credited to income as “Change in Fair Value of Profit Sharing Liability”. See Note 2(h) – “Financial instruments” for details.

Payments to Shaanxi Steel for the profit sharing liability are not required until net cumulative profits are achieved. Based on the performance of the Asset Pool, no profit sharing payment was made from inception to date.

Note 17 – 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 and six months ended June 30, 2014 and 2013 are as follows: 

(In thousands)	Three months ended June 30, 2014		Three months ended June 30, 2013
Current	$	107	$	105
Deferred		-		-
Total provision for income taxes	$	107	$	105

26

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands)	Six months ended June 30, 2014		Six months ended June 30, 2013
Current	$	112	$	176
Deferred		-		-
Total provision for income taxes	$	112	$	176

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. The special tax treatment has not changed to date as a result of the evaluations by the local tax bureau.

Deferred tax 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 $536.8 million will begin to expire in 2015. 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 is 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 a 100% valuation allowance for the deferred tax assets. The valuation allowance as of June 30, 2014 and December 31, 2013 was $101.0 million and $97.6 million, respectively. Management will review this valuation allowance periodically and make adjustments as warranted. Temporary differences represent tax and book differences for various items, such as receivable allowances, inventory allowances, impairments on fixed assets and deferred lease income.

Movement of valuation allowance:

	June 30, 2014			December 31, 2013
	(in thousands)			(in thousands)
Beginning balance	$	97,569		$	72,891
Current period addition		4,194			23,293
Current period reversal		(55	)		(1,206	)
Exchange difference		(726	)		2,591
Ending balance	$	100,982		$	97,569

Deferred tax 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 six months ended June 30, 2014. The net operating loss carry forwards for United States income taxes amounted to $2.4 million, which may be available to reduce future years’ taxable income. These carry forwards will expire, if not utilized, starting from 2026 through 2033. 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 June 30, 2014 was $0.8 million. The net change in the valuation allowance for the six months ended June 30, 2014 was $0.1 million. Management will review this valuation allowance periodically and make adjustments as warranted.

The Company has no cumulative proportionate retained earnings from profitable subsidiaries as of June 30, 2014. 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.

27

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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 June 30, 2014 and December 31, 2013, the Company had $2.8 million and $3.5 million in value added tax credits 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 $178.6 million and $174.5 million, respectively, for the three months ended June 30, 2014 and $164.8 million and $154.4 million, respectively, for the three months ended June 30, 2013. VAT on sales and VAT on purchases amounted to $331.5 million and $326.4 million, respectively, for the six months ended June 30, 2014 and $353.2 million and $338.2 million, respectively, for the six months ended June 30, 2013. 

Taxes payable consisted of the following: 

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
VAT taxes payable	$	2,496	$	2,211
Income taxes payable		185		173
Other taxes		1,500		2,244
Totals	$	4,181	$	4,628

Note 18 – Related party transactions and balances

Related party transactions

a.  Capital lease

As disclosed in Note 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:

	June 30, 2014			December 31, 2013
	(in thousands)			(in thousands)
Machinery	$	601,398		$	605,839
Less: accumulated depreciation		(90,460	)		(76,740	)
Carrying value of leased assets	$	510,938		$	529,099

b.  The following chart summarizes sales to related parties for the three and six months ended June 30, 2014 and 2013. 

Name of related parties	Relationship	Three months ended June 30, 2014		Three months ended June 30, 2013
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	25,150	$	82,286
Shaanxi Yuchang Trading Co., Ltd	Significant influence by Long Steel Group*		-		5,975
Shaanxi Haiyan Trade Co., Ltd	Significant influence by Long Steel Group*		805		5,004
Shaanxi Shenganda Trading Co., Ltd	Significant influence by Long Steel Group*		26,967		18,393
Shaanxi Steel	Majority shareholder of Long Steel Group		626		448
Shaanxi Coal and Chemical Industry Group Co., Ltd.	Shareholder of Shaanxi Steel		16,420		12,792
Shaanxi Long Steel Group Baoji Steel Rolling Co., Ltd	Subsidiary of Long Steel Group		5,117		114
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		4,291		11,289
Total		$	79,376	$	136,301

*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.

28

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Name of related parties	Relationship	Six months ended June 30, 2014		Six months ended June 30, 2013
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	69,950	$	162,961
Sichuan Yutai Trading Co., Ltd	Significant influence by Long Steel Group		-		72
Shaanxi Yuchang Trading Co., Ltd	Significant influence by Long Steel Group		-		20,410
Shaanxi Haiyan Trade Co., Ltd	Significant influence by Long Steel Group		820		15,596
Shaanxi Shenganda Trading Co., Ltd	Significant influence by Long Steel Group		47,703		36,679
Shaanxi Steel	Majority shareholder of Long Steel Group		1,097		1,411
Shaanxi Coal and Chemical Industry Group Co., Ltd.	Shareholder of Shaanxi Steel		21,389		14,626
Shaanxi Long Steel Group Baoji Steel Rolling Co., Ltd	Subsidiary of Long Steel Group		11,735		2,113
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		8,888		31,293
Total		$	161,582	$	285,161

Sales to related parties in trading transactions, which were netted against the corresponding cost of goods sold, amounted to $58.7 million and $91.9 million for the three and six months ended June 30, 2014, respectively. See Note 2(m) Revenue Recognition for details.

c. The following charts summarize purchases from related parties for the three and six months ended June 30, 2014 and 2013.

Name of related parties	Relationship	Three months ended June 30, 2014		Three months ended June 30, 2013
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	100,504	$	170,005
Hancheng Haiyan Coking Co., Ltd	Noncontrolling shareholder of Long   Steel Group		40,179		53,193
Xi’an Pinghe Metallurgical Raw Material Co., Ltd	Noncontrolling shareholder of Long Steel Group		5,016		742
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		-		1
Shaanxi Huafu New Energy Co., Ltd	Significant influence by the Long Steel Group		7,561		8,560
Beijing Daishang Trading Co., Ltd.	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		-		1,432
Tianwu General Steel Material Trading Co., Ltd.	Investee of General Steel (China)		73,940		-
Tianjin General Quigang Pipe Co., Ltd	Partially owned by CEO through indirect shareholding**		4,253		-
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding**		17,721		-
Others	Entities either owned or have significant influence by our affiliates or management		1,037		166
Total		$	250,211	$	234,099

29

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

Name of related parties	Relationship	Six months ended June 30, 2014		Six months ended June 30, 2013
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	252,276	$	274,498
Hancheng Haiyan Coking Co., Ltd	Noncontrolling shareholder of Long   Steel Group		84,267		116,991
Xi’an Pinghe Metallurgical Raw Material Co., Ltd	Noncontrolling shareholder of Long Steel Group		5,920		12,497
Shaanxi Long Steel Group Baoji Steel Rolling Co., Ltd	Subsidiary of Long Steel Group		-		53
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		-		211
Shaanxi Huafu New Energy Co., Ltd	Significant influence by the Long Steel Group		14,221		18,089
Beijing Daishang Trading Co., Ltd.	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		-		4,909
Tianwu General Steel Material Trading Co., Ltd.	Investee of General Steel (China)		97,279		-
Tianjin General Quigang Pipe Co., Ltd	Partially owned by CEO through indirect shareholding		8,528		-
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		45,640		-
Others	Entities either owned or have significant influence by our affiliates or management		1,084		236
Total		$	509,215	$	427,484

Related party balances

a. Loans receivable – related parties:

Name of related parties	Relationship	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Teamlink Investment Co., Ltd	Partially owned by CEO through indirect shareholding		4,540		4,540
Total		$	4,540	$	4,540

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

30

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

b. Accounts receivables – related parties:

Name of related parties	Relationship	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	1,316	$	548
Shaanxi Shenganda Trading Co., Ltd	Significant influence by Long Steel Group		-		-
Tianjin Daqiuzhuang Steel Plates	Partially owned by CEO through indirect shareholding		19		19
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		2,586		-
Shaanxi Steel	Majority shareholder of Long Steel Group		1,866		1,741
Others			1		634
Total		$	5,788	$	2,942

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	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	379	$	406
Shaanxi Steel	Majority shareholder of Long Steel Group		48,532		46,439
Tianjin General Quigang Pipe Co., Ltd	Partially owned by CEO through indirect shareholding		1,238		1,247
Tianjin Dazhan Industry Co, Ltd	Partially owned by CEO through indirect shareholding		-		491
Beijing Shenhua Xinyuan Metal Materials Co., Ltd.	Partially owned by CEO through indirect shareholding		4,865		4,901
Victory Energy Resource Co., Ltd	Partially owned by CEO through indirect shareholding		2,231		-
Others	Entities either owned or have significant influence by our affiliates or management		738		622
Total		$	57,983	$	54,106

d. Advances on inventory purchase – related parties:

Name of related parties	Relationship	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	-	$	9,123
Shaanxi Shenganda Trading Co., Ltd.	Significant influence by Long Steel Group		13,088		25,607
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		1,379		10,343
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		61,440		16,158
Tianjin General Qiugang Pipe Co., Ltd	Partially owned by CEO through indirect shareholding		202		555
Maoming Shengze Trading Co., Ltd	Partially owned by CEO through indirect shareholding		43,137		21,197
Others	Entities either owned or have significant influence by our affiliates or management		33		20
Total		$	119,279	$	83,003

31

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

e. Accounts payable - related parties:

Name of related parties	Relationship	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Hancheng Haiyan Coking Co., Ltd	Noncontrolling shareholder of Longmen Joint Venture	$	62,890	$	58,163
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		164,073		134,758
Shaanxi Coal and Chemical Industry Group Co., Ltd.	Shareholder of Shaanxi Steel		3,507		29,990
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		972		958
Xi’an Pinghe Metallurgical Raw Material Co., Ltd	Noncontrolling shareholder of Long Steel Group		2,036		8,714
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		9,862		1
Henan Xinmi Kanghua Fire Refractory Co., Ltd	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		702		716
Beijing Daishang Trading Co., Ltd	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		36		1,004
Tianwu General Steel Material Trading Co., Ltd.	Investee of General Steel (China)		17,299		759
Others	Entities either owned or have significant influence by our affiliates or management		726		630
Total		$	262,103	$	235,692

f. Short-term loans - related parties:

Name of related parties	Relationship	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Shaanxi Steel	Majority shareholder of Long Steel Group	$	81,250	$	49,110
Shaanxi Coal and Chemical Industry Group Co., Ltd	Shareholder of Shaanxi Steel		71,287		28,216
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		-		33,183
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		-		8,178
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		13		6,548
Yangpu Capital Automobile	Partially owned by CEO through indirect shareholding		1,446		1,458
Total		$	153,996	$	126,693

See Note 9 – Debt for the loan details.

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

Name of related party	Relationship	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Shaanxi Steel	Majority shareholder of Long Steel Group	$	62,374	$	53,013
Total		$	62,374	$	53,013

32

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.

Name of related parties	Relationship	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Tianjin Hengying Trading Co, Ltd	Partially owned by CEO through indirect shareholding	$	377	$	380
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		44,730		43,636
Shaanxi Steel	Majority shareholder of Long Steel Group		48,670		44,363
Wendlar Investment & Management Group Co., Ltd	Common control under CEO		1,053		895
Yangpu Capital Automobile	Partially owned by CEO through indirect shareholding		362		291
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		470		473
Maoming Shengze Trading Co., Ltd	Partially owned by CEO through indirect shareholding		2,201		1,745
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		346		921
Total		$	98,209	$	94,079

i. Customer deposits – related parties:

Name of related parties	Relationship	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Shaanxi Yuchang Trading Co., Ltd	Significant influence by Long Steel Group	$	10	$	10
Shaanxi Coal and Chemical Industry Group Co., Ltd	Shareholder of Shaanxi Steel		13,749		-
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		8,378		15,038
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		16		2,748
Shaanxi Shenganda Trading Co., Ltd	Significant influence by Long Steel Group		-		275
Tianwu General Steel Material Trading Co., Ltd.	Investee of General Steel (China)		113,549		46,521
Shaanxi Haiyan Trade Co., Ltd	Significant influence by Long Steel Group		7,186		-
Others			-		289
Total		$	142,888	$	64,881

33

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

j. Deposits due to sales representatives – related parties

Name of related parties	Relationship	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Gansu Yulong Trading Co., Ltd.	Significant influence by Long Steel Group	$	1,073	$	1,408
Shaanxi Yuchang Trading Co., Ltd	Significant influence by Long Steel Group		585		589
Total		$	1,658	$	1,997

k. Long-term loans – related party:

Name of related party	Relationship	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Shaanxi Steel	Majority shareholder of Long Steel Group	$	9,750	$	19,644
Total		$	9,750	$	19,644

The Company also provided guarantees on related parties’ bank loans amounting to $201.7 million and $205.8 million as of June 30, 2014 and as of December 31, 2013, respectively.

l. Deferred lease income

	June 30, 2014			December 31, 2013
	(in thousands)			(in thousands)
Beginning balance	$	77,444		$	77,199
Less: Lease income realized		(1,088	)		(2,158	)
Exchange rate effect		(565	)		2,403
Ending balance		75,791			77,444
Current portion		(2,171	)		(2,187	)
Noncurrent portion	$	73,620		$	75,257

For the three months ended June 30, 2014 and 2013, the Company realized lease income from Shaanxi Steel, a related party, amounting to $0.5 million and $0.5 million, respectively.

For the six months ended June 30, 2014 and 2013, the Company realized lease income from Shaanxi Steel, a related party, amounting to $1.1 million and $1.1 million, respectively.

m. Equity

On November 19, 2013, the Company sold its 28% equity interest in Tianwu, held by Yangpu Shengtong, to Tianjin Dazhan Industry Co., Ltd., a related party through indirect common ownership by the CEO, for $13.6 million (RMB 84.3 million) while retaining the 32% interest held by General Steel (China). As a result of this transaction, the Company met the criteria under ASC 810-10-40-4 to deconsolidate Tianwu as of the ownership disposal date and recognize a gain, which amounted to $1.0 million. After the deconsolidation of Tianwu, General Steel (China)’s 32% interest in Tianwu is accounted for as an equity method investment, which amounted to $15.6 million and $15.8 million as of June 30, 2014 and December 31, 2013, respectively.

Note 19 – Equity

2014 Equity Transactions

On February 3, 2014, the Company granted 80,000 shares of common stock for investor relations consulting services under two service agreements dated January 14, 2014. The shares were valued at $1.01 per share, the quoted market price at the time the services were provided.

34

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 20 – 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 for the three months ended June 30, 2014 and 2013 amounted to $3.0 million and $1.9 million, respectively, and for the six months ended June 30, 2014 and 2013 amounted to $5.8 million and $4.1 million, respectively.

Note 21 – 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 June 30, 2014 is as follows:

Year ending June 30,	Minimum lease payment
	(in thousands)
2015	$	1,055
2016		566
2017		566
2018		566
2019		566
Years after		19,849
Total minimum payments required	$	23,168

Total rental expense was $0.6 million and $0.8 million for the three months ended June 30, 2014 and 2013, respectively, and $1.5 million and $1.6 million for the six months ended June 30, 2014 and 2013, respectively.

Contractual Commitments

Longmen Joint Venture has $326.3 million contractual obligations related to construction projects as of June 30, 2014 estimated to be fulfilled between May and December 2014.

Contingencies

As of June 30, 2014, Longmen Joint Venture provided guarantees to related parties’ and third parties’ bank loans, including lines of credit and others, amounting to $265.4 million.

Nature of guarantee	Guarantee amount		Guaranty Due Date
	(In thousands)
Line of credit	$	153,563	Various from July 2014 to August 2015
Three-party financing agreements		19,500	Various from July 2014 to May 2015
Confirming storage		52,975	Various from August 2014 to April 2015
Financing by the rights of goods delivery in future		39,406	Various from July to October 2014
Total	$	265,444

35

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Name of parties being guaranteed	Guarantee amount		Guaranty Due Date
	(In thousands)
Long Steel Group	$	82,875	Various from September 2014 to August 2015
Hancheng Haiyan Coking Co., Ltd		39,975	Various from August 2014 to April 2015
Chengdu Zhongyi Steel Co., Ltd		8,125	March 2015
Shaanxi Tianyi Metal Materials Co., Ltd		6,500	December 2014
Xi’an Laisheng Logistics Co., Ltd		11,781	Various from August 2014 to May 2015
Xi'an Kaiyuan Steel Sales Co., Ltd		6,500	January 2015
Shaanxi Longan Industry Co., Ltd.		8,125	December 2014
Hancheng Sanli Furnace Burden Co., Ltd.		16,250	March 2015
Tianjin Dazhan Industry Co., Ltd		38,188	Various from June 2014 to March 2015
Tianjin Hengying Trading Co., Ltd		40,625	Various from July 2014 to January 2015
Jinmen Desheng Metallurgy Co., Ltd		6,500	September 2014
Total	$	265,444

As of June 30, 2014, the Company did not accrue any liability for the amounts the Group has guaranteed for third parties 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 22 – 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 the results of division operations for the three months ended June 30, 2014 and 2013:

(In thousands)
Sales:	2014		2013
Longmen Joint Venture	$	587,314	$	650,741
Maoming Hengda		215		1,349
Baotou Steel Pipe Joint Venture		483		972
General Steel (China) & Tianwu Joint Venture		-		5,454
Total sales		588,012		658,516
Interdivision sales		1		(4,865	)
Consolidated sales	$	588,013	$	653,651

Gross profit (loss):	2014			2013
Longmen Joint Venture	$	28,229		$	(36,193	)
Maoming Hengda		21			473
Baotou Steel		3			167
General Steel (China) & Tianwu Joint Venture		(159	)		17
Total gross profit (loss)		28,094			(35,536	)
Interdivision gross profit		-			-
Consolidated gross profit (loss)	$	28,094		$	(35,536	)

Income (loss) from operations:	2014			2013
Longmen Joint Venture	$	8,128		$	(44,684	)
Maoming Hengda		(54	)		(225	)
Baotou Steel		(133	)		55
General Steel (China) & Tianwu Joint Venture		(720	)		(790	)
Total income (loss) from operations		7,221			(45,644	)
Interdivision income (loss) from operations		-			-
Reconciling item (1)		(896	)		(1,246	)
Consolidated income (loss) from operations	$	6,325		$	(46,890	)

36

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Net income (loss) attributable to General Steel Holdings, Inc.:	2014			2013
Longmen Joint Venture	$	(8,077	)	$	(34,944	)
Maoming Hengda		(123	)		(216	)
Baotou Steel		(106	)		46
General Steel (China) & Tianwu Joint Venture		(1,870	)		(3,528	)
Total net loss attributable to General Steel Holdings, Inc.		(10,176	)		(38,642	)
Interdivision net income		-			-
Reconciling item (1)		(843	)		(1,176	)
Consolidated net loss attributable to General Steel Holdings, Inc.	$	(11,019	)	$	(39,818	)

Depreciation, amortization and depletion:	2014		2013
Longmen Joint Venture	$	22,778	$	20,850
Maoming Hengda		158		315
Baotou Steel		59		26
General Steel (China) & Tianwu Joint Venture		447		518
Consolidated depreciation, amortization and depletion	$	23,442	$	21,709

Finance/interest expenses:	2014			2013
Longmen Joint Venture	$	25,131		$	18,243
Maoming Hengda		-			-
Baotou Steel		(1	)		-
General Steel (China) & Tianwu Joint Venture		1,488			2,972
Interdivision interest expenses		-			-
Reconciling item (1)		1			1
Consolidated interest expenses	$	26,619		$	21,216

Capital expenditures:	2014		2013
Longmen Joint Venture	$	55,852	$	27,922
Maoming Hengda		-		-
Baotou Steel		-		1
General Steel (China) & Tianwu Joint Venture		-		2
Reconciling item (1)		-		-
Consolidated capital expenditures	$	55,852	$	27,925

The following represents the results of division operations for the six months ended June 30, 2014 and 2013:

(In thousands)
Sales:	2014			2013
Longmen Joint Venture	$	1,181,328		$	1,297,489
Maoming Hengda		251			2,872
Baotou Steel Pipe Joint Venture		645			981
General Steel (China) & Tianwu Joint Venture		53			54,180
Total sales		1,182,277			1,355,522
Interdivision sales		(53	)		(50,580	)
Consolidated sales	$	1,182,224		$	1,304,942

37

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Gross profit (loss):	2014			2013
Longmen Joint Venture	$	6,010		$	(31,826	)
Maoming Hengda		45			245
Baotou Steel		(20	)		89
General Steel (China) & Tianwu Joint Venture		(502	)		23
Total gross profit (loss)		5,533			(31,469	)
Interdivision gross profit		-			-
Consolidated gross profit (loss)	$	5,533		$	(31,469	)

Loss from operations:	2014			2013
Longmen Joint Venture	$	(31,166	)	$	(9,747	)
Maoming Hengda		(576	)		(1,022	)
Baotou Steel		(177	)		(305	)
General Steel (China) & Tianwu Joint Venture		(3,286	)		(1,598	)
Total loss from operations		(35,205	)		(12,672	)
Interdivision loss from operations		-			-
Reconciling item (1)		(2,133	)		(2,327	)
Consolidated loss from operations	$	(37,338	)	$	(14,999	)

Net loss attributable to General Steel Holdings, Inc.:	2014			2013
Longmen Joint Venture	$	(46,111	)	$	(26,619	)
Maoming Hengda		(660	)		(987	)
Baotou Steel		(141	)		(243	)
General Steel (China) & Tianwu Joint Venture		(5,713	)		(6,684	)
Total net loss attributable to General Steel Holdings, Inc.		(52,625	)		(34,533	)
Interdivision net income (loss)		-			-
Reconciling item (1)		(1,958	)		(2,182	)
Consolidated net loss attributable to General Steel Holdings, Inc.	$	(54,583	)	$	(36,715	)

Depreciation, amortization and depletion:	2014		2013
Longmen Joint Venture	$	46,308	$	41,281
Maoming Hengda		462		626
Baotou Steel		121		123
General Steel (China) & Tianwu Joint Venture		897		1,037
Consolidated depreciation, amortization and depletion	$	47,788	$	43,067

Finance/interest expenses:	2014		2013
Longmen Joint Venture	$	52,121	$	40,393
Maoming Hengda		-		-
Baotou Steel		-		-
General Steel (China) & Tianwu Joint Venture		3,097		5,678
Interdivision interest expenses		-		-
Reconciling item (1)		96		2
Consolidated interest expenses	$	55,314	$	46,073

Capital expenditures:	2014		2013
Longmen Joint Venture	$	112,599	$	44,006
Maoming Hengda		32		2
Baotou Steel		-		8
General Steel (China) & Tianwu Joint Venture		82		3
Reconciling item (1)		-		-
Consolidated capital expenditures	$	112,713	$	44,019

Total Assets as of:	June 30, 2014			December 31, 2013
Longmen Joint Venture	$	2,349,913		$	2,573,212
Maoming Hengda		27,786			29,211
Baotou Steel Pipe Joint Venture		3,290			4,448
General Steel (China) & Tianwu Joint Venture		200,665			121,883
Interdivision assets		(33,208	)		(34,213	)
Reconciling item (2)		8,028			5,817
Total Assets	$	2,556,474		$	2,700,358

38

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(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 six months ended June 30, 2014 and 2013.

(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 June 30, 2014 and December 31, 2013.

Note 23 – Subsequent events

On July 14, 2014, the Company entered into a Subscription Agreement (the "Subscription Agreement") with Zuosheng Yu, the Company's Chief Executive Officer and a member of the Company's Board of Directors, relating to a private placement of the Company's common stock, par value $0.001 per share. Pursuant to the Subscription Agreement, the Company agreed to sell to Zuosheng Yu 5,000,000 shares of common stock at a purchase price of $1.50 per share (the "Purchase Price"), for an aggregate amount of $7,500,000, subject to closing conditions set forth in the Subscription Agreement. The Purchase Price represents a 23% premium to the volume weighted average closing price of the Common Stock from March 5, 2014 to July 11, 2014, which ranged from $0.90 to $1.47 per share of common stock during the period. Upon completion of this transaction, Zuosheng Yu would own 21.7% of the Company’s common stock.

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 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”, in our Annual Report on Form 10-K/A for the fiscal year ended December 31, 2013 filed with the SEC on August 19, 2014.

Second Quarter Highlights

The second quarter of 2014 was highlighted with the following:

· Sales in the second quarter of 2014 decreased by 10.0% to $588.0 million, from $653.7 million in the second quarter of 2013, due to the decrease in both the average selling price and the sales volume of our products. For the second quarter of 2014, sales volume of rebar in Shaanxi Longmen Iron and Steel Co., Ltd. (“Longmen Joint Venture”) totaled 1.31 million metric tons, a decrease of 3.2%, compared with 1.35 million metric tons in the second quarter of 2013, with an average selling price of $450.0 per ton, as compared with $482.7 per ton in the second quarter of 2013.

· Gross profit in the second quarter of 2014 was $28.1 million, or 4.8% of total revenue, compared with a gross loss of $35.5 million, or (5.4)% of total revenue in the second quarter of 2013.

· Total finance expense in the second quarter of 2014 was $26.6 million, as compared with $21.2 million for the same period in 2013. Finance expenses mainly consisted of interest expense on capital leases, which was $5.7 million and $5.1 million in the second quarter of 2014 and 2013, respectively, and interest expense on bank borrowings and discounted notes receivable, which was $20.9 million and $16.1 million in the second quarter of 2014 and 2013, respectively.

· Loss per share were $(0.20) and $(0.72) in the second quarter of 2014 and 2013, respectively. The decrease in the loss in 2014 was mainly due to the average cost of rebar decreasing more than the average selling price, leading to an increase in 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 crude steel products, consisting mainly of steel rebar, is 7 million metric tons. Our rebar products 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 controlled steel companies in the People’s Republic of China (“PRC”). Our mission is to grow our business organically, and through the acquisition of Chinese steel companies, increase profitability and efficiency 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 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” all refer to General Steel Holdings, Inc. 

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Steel-Related Subsidiaries and Raw Material Trading Company

We presently have controlling interests in four steel-related subsidiaries:

· 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”).

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 May 1, 2011 General Steel (China) entered into a lease agreement with Tianjin Shuangjie Liansheng Rolled Steel Co., Ltd. (the “Lessee”), whereby General Steel (China) leased parts of the facilities its facility located at No. 1, Tonga Street, Daqiuzhuang Town, Jinghai County, Tianjin City to the Lessee for a monthly payment of $0.1 million (RMB 0.5 million). The lease expires in May 2021. Management evaluates the fair value of its long-term assets on an annual basis, or upon a triggering event which would require an assessment sooner, and is of the opinion that the fair value of the property, plant and equipment as supported by the operating lease approximates its current carrying value

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 governmental authorities in the PRC on May 25, 2007, and commenced 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 subsidiary 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 a 20-year Unified Management Agreement (the “Unified Management Agreement”) was entered into between our Company, Longmen Joint Venture, Shaanxi Coal and 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, and 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 8,700 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 177 vehicles and provides transportation services exclusively to Longmen Joint Venture.

Longmen Joint Venture’s rebar products are categorized within the steel industry as “longs” (in reference to their shape). Rebar is generally considered a regional product because its weight and dimension 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 approximately a 72% share of the Xi’an market for rebar.

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An established regional network of one hundred twenty-eight distributors, together with smaller distributors and three sales offices sell Longmen Joint Venture’s products. All products are sold 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 Xiang Jia Ba hydropower projects.

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. See Note 14 - “Deferred lease income” of the Notes to Condensed Consolidated Financial Statements included herein

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 $605.8 million (or approximately RMB 3.7 billion) of the constructed iron and steel making facilities owned by Shaanxi Steel, which includes one 400 m² sintering machine, two 1,280 m³ 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 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, the facilities 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 or loss generated by Longmen Joint Venture decreased from 60% to 36%. However, the overall capacity under the management of Longmen Joint Venture increased by three million tons, or 75%. The Agreement improved 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. There has been no adjustment to the Agreement from its inception to the present time nor intention to make future adjustment by the Company and Shaanxi Steel.

The parties to the Agreement established the Shaanxi Longmen Iron and Steel Unified Management Supervisory Committee ("Supervisory Committee") to ensure that the facilities and related resources are operated and managed according to the stipulations set forth in the Agreement. The Board of Directors of Longmen Joint Venture, of which the Company holds 4 out of 7 seats, requires a simple majority vote and 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 meets certain of the criteria of a capital lease and therefore the assets constructed by Shaanxi Steel are accounted for by Longmen Joint Venture as a capital lease. The profit sharing liability portion of the lease obligation, representing 40% of the pre-tax profit generated by the Asset Pool, is accounted for by Longmen Joint Venture as a derivative financial instrument at fair value. See Notes 2 “Summary of significant accounting policies”, 15 “Capital lease obligations” and 16 “Profit sharing liability”.

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 newly installed production lines were both relocated from the Maoming Hengda (as defined below) facility and consume less energy when running at maximum efficiency 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 was 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 which targeted customers in Guangxi Province and the western region of Guangdong.

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On December 15, 2013, Maoming Hengda entered into a lease agreement with Zhongshan Baohua Rebar Factory, with which Maoming Hengda leased the 400,000 ton capacity rebar production line and various other buildings and equipment to Zhongshan Baohua Rebar Factory, for an annual payment of $1.2 million (RMB 7.2 million) for eight years between March 2014 and February 2022.

Production Capacity Information Summary by Subsidiary

Annual Production Capacity (metric tons)	General Steel (China) (1)	Baotou Steel Pipe Joint Venture	Longmen Joint Venture	Maoming Hengda (1)
Crude Steel	-	-	7 million	-
Processing	400,000	100,000	4.3 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

(1) The production facilities of General Steel (China) and Maoming Hengda currently are leased to unrelated parties.

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, timeliness of customer services, 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 six months ended June 30, 2014, 31.8% and 24.4% 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

For the three months ended June 30, 2014 and 2013, rebar, our major product, comprised more than 99.9% and 99.6% of our sales, respectively. For the six months ended June 30, 2014 and 2013, rebar, our major product, comprised more than 99.9% and 99.4% of our sales, respectively. Overall, domestic economic growth is an important driver of demand for our major product, especially from construction and infrastructure projects.

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 China’s top five economic priorities. Shaanxi Province, where Longmen Joint Venture is located, has been designated as a focal point for development in the Western region, and Xi’an, the provincial capital, has been designated as a focal point for this development in China. Longmen Joint Venture is 180 kilometers from Xi’an 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, a GDP increase of 11% was reported by Shaanxi Province in 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%. We have a sales office in Chengdu City, Sichuan Province to meet the increasing demand for the production of steel.

According to the Shaanxi provincial government, the total fixed asset investment for the Shaanxi Province was $257.4 billion (RMB 1.59 trillion) for the year ended December 31, 2013, an increase of 24.1% over the same period in 2012.

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.

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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, 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 an investment of approximately $40 billion (RMB 260 billion) by 2015 and 8,080 kilometers of highway by 2020. The infrastructure and construction projects provide strong and stable demand for our steel products in this area, in which we have over 70% of the market share.

In January 2011, the Shaanxi provincial government announced that it will invest approximately $13 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, 16,000 kilometers of high speed railway will 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 12^th Five Year Plan, which continues the efforts to develop the Western areas. The Plan is centered on infrastructure and construction, highlighted by the development of economic zones, construction of roads/railway and hydro projects, which drive the local demand for steel products.

In February 2014, the National Development and Reform Commission (“NDRC”) announced nine focal points of the western development, which will speed up major infrastructure construction in the western areas, including the construction of railway, highway and hydro-projects.

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.

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.  Iron ore is the main raw material used to produce hot-rolled steel coil and steel billets. Therefore, 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 80% 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’s 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. We presently purchase all of the iron ore produced by 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 June 30, 2014 are as follows:

Name of Major Supplier	Raw Material Purchased	% of Total Raw Material Purchased			Relationship with Company
Tianwu General Steel Material Trading Co., Ltd.	Iron Ore		6.3	%	Related Party
Longgang Group Import & Export Co., Ltd.	Iron Ore		4.9	%	Related Party
Shaanxi Fengyi Industry Co., Ltd.	Coke		4.2	%	Third Party
Fuping Rolling Steel Mill	Coke		4.0	%	Third Party
Shaanxi Longmen Coal Chemical Industry Co., Ltd	Coke		3.8	%	Third Party
	Total		23.2	%

44

The sources and/or our top five major suppliers of our raw materials for the six months ended June 30, 2014 are as follows:

Name of Major Supplier	Raw Material Purchased	% of Total Raw Material Purchased			Relationship with Company
Longgang Group Import & Export Co., Ltd.	Iron Ore		12.7	%	Related Party
Shaanxi Longmen Coal Chemical Industry Co., Ltd	Coke		8.8	%	Third Party
Tianwu General Steel Material Trading Co., Ltd.	Iron Ore		8.2	%	Related Party
Shaanxi Haiyan Coal Chemical Industry Co., Ltd.	Coke		7.1	%	Related Party
Long Steel Group	Iron Ore		7.0	%	Related Party
	Total		43.8	%

Industry Environment

Despite demand growth experienced during 2010 and 2011, the overall nationwide steelmaking capacity still exceeds steel demand. There is significant over-capacity in the Chinese steel sector which is putting pressure on operators’ profitability which has become the most significant challenge in the steel manufacturing business. Chinese crude steel production was 412 million tons from January to June in 2014, an increase of 3% compared with the same period last year, while the total consumption of crude steel reached 376 million tons from January to June in 2014, an increase of 0.4% from the same period last year, according to the China Iron and Steel Association.

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 few 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 end consumers due to the market overcapacity and fragmentation.

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 over 500 crude steel producers throughout China, and the top ten producers account for approximately 48% of total national output. In April 2012, the central government announced its goal of reducing obsolete iron and steel capacities by 17.8 million tons in 2012 and successfully reached the goal and eliminated 20.2 million tons of obsolete iron and steel capacity. In April 2013, the central government published the industry target of eliminating 10.4 million tons of obsolete iron and steel capacities in 2013 and successfully eliminated 16.9 million tons of obsolete iron and steel capacity. In March 2014, the government reaffirmed its determination of industry consolidation, and announced that it plans to eliminate 27 million tons of obsolete iron and steel capacity in order to reach the industry goal of 12th five-year plan ahead of schedule in 2014. However, we continue to see a strong demand for our products and believe there are significant growth opportunities in the industry and market we service and such consolidation is not expected to directly impact our Company.

 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.  As the operational conditions become more stringent, more small and medium sized companies will likely 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 qualified potential acquisition targets.

Since 2013, the government has exerted a more stringent environment protection policy on the steel industry. In January 2014, the Ministry of Industry and Information Technology of the People's Republic of China (the "MIIT") announced a List of Enterprises Fulfilling the Iron and Steel Industry Specification (the "List"). The List includes a highly-selected group of large and medium steel manufacturers that have met or exceeded more stringent national requirements and standards on product quality, environmental protection, energy consumption, workmanship and equipment, production scale, as well as work safety and social responsibility. The MIIT will collaborate with China's other governmental agencies to provide support to the List's members and to speed up the steel industry's restructuring and consolidation. Steel makers omitted from the List will most likely face higher electricity costs, more restrictive administrative measures, and adverse effects of forceful regulations intent on reducing the nation's overcapacity. Longmen Joint Venture, the major facility of General Steel, has been included on the List as the only enterprise in China’s Shaanxi Province.

45

Results of Operations for the Three and Six Months Ended June 30, 2014

Sales

Three months ended June 30, 2014 compared with three months ended June 30, 2013

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

	Three months ended
	June 30, 2014							June 30, 2013							Change			Change
in thousands, except metric tons	Volume		Sales		%			Volume		Sales		%			Volume %			Sales %
Longmen Joint Venture		1,305,127	$	587,314		99.9	%		1,348,173	$	650,741		99.6	%		(3.2	)%		(9.7	)%
Others		1,312		699		0.1	%		36,731		2,910		0.4	%		(96.4	)%		(76.0	)%
Total Sales		1,306,439	$	588,013		100.0	%		1,384,904	$	653,651		100.0	%		(5.7	)%		(10.0	)%

Total sales for the three months ended June 30, 2014 decreased by 10.0% to $588.0 million from $653.7 million for the same period in 2013. The decrease in sales compared with the same period in 2013 was due to the decrease in both the average selling price and sales volume of our rebar products. Longmen Joint Venture comprised 99.9% and 99.6% of total sales for the second quarter of 2014 and 2013, respectively. Sales volume of rebar decreased by 3.2% to 1.31 million metric tons, compared with 1.35 million metric tons in the same period in 2013. The average selling price of rebar decreased by 6.8% to approximately $450.0 per ton in the second quarter of 2014 compared with approximately $482.7 per ton in the same period of 2013.

Our product demands and prices had been rising in the first two quarters of 2012. As a result of the China and global steel industry over-capacity, Chinese economic control polices and the financial crisis, commodity prices declined significantly in the third quarter of 2012. With weakened demand, market forces kicked-in and the price of steel dropped substantially. As such, our sales prices have dropped since the third quarter of 2012, evidencing a continued decline. The over-capacity issue continued to impact our results during the year of 2013 and into 2014. 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 with the same period in 2013.

Our five major customers are distributors and collectively represented 31.8% of our total sales for the three months ended June 30, 2014 compared with 27.8% of our total sales for the three months ended June 30, 2013. These five customers include 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. 

Six months ended June 30, 2014 compared with six months ended June 30, 2013

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

	Six months ended
	June 30, 2014							June 30, 2013							Change			Change
in thousands, except metric tons	Volume		Sales		%			Volume		Sales		%			Volume %			Sales %
Longmen Joint Venture		2,622,667	$	1,181,328		99.9	%		2,603,296	$	1,297,489		99.4	%		0.7	%		(9.0	)%
Others		2,035		896		0.1	%		86,031		7,453		0.6	%		(97.6	)%		(88.0	)%
Total Sales		2,624,702	$	1,182,224		100.0	%		2,689,327	$	1,304,942		100.0	%		(2.4	)%		(9.4	)%

Total sales for the six months ended June 30, 2014 decreased by 9.4% to $1.2 billion from $1.3 billion for the same period in 2013. The decrease in sales compared with the same period in 2013 was predominantly due to the decreased average selling price. Longmen Joint Venture comprised 99.9% and 99.4% of total sales for the six months ended June 30, 2014 and 2013, respectively. Sales volume of rebar increased by 0.7% to 2.62 million metric tons, compared with 2.60 million metric tons in the same period in 2013. The average selling price of rebar decreased by 9.6% to approximately $450.4 per ton in the six months ended June 30, 2014 compared with approximately $498.4 per ton in the same period of 2013.

Our product demands and prices had been rising in the first two quarters of 2012. As a result of the China and global steel industry over-capacity, Chinese economic control polices and the financial crisis, commodity prices declined significantly in the third quarter of 2012. With weakened demand, market forces kicked-in and the price of steel dropped substantially. As such, our sales prices have dropped since the third quarter of 2012, evidencing a continued decline. The over-capacity issue continued to impact our results during the year of 2013 and into 2014. 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 with the same period in 2013.

46

Our five major customers are distributors and collectively represented 24.4% of our total sales for the six months ended June 30, 2014 compared with 23.3% of our total sales for the six months ended June 30, 2013. 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. 

Cost of Goods Sold

Three months ended June 30, 2014 compared with three months ended June 30, 2013

	Three months ended
	June 30, 2014							June 30, 2013							Change			Change
in thousands, except metric tons	Volume		Cost of Goods Sold		%			Volume		Cost of Goods Sold		%			Volume %			Cost of Goods Sold %
Longmen Joint Venture		1,305,127	$	559,084		99.9	%		1,348,173	$	686,934		99.7	%		(3.2	)%		(18.6	)%
Others		1,312		835		0.1	%		36,731		2,253		0.3	%		(96.4	)%		(62.9	)%
Total Cost of Goods Sold		1,306,439	$	559,919		100.0	%		1,384,904	$	689,187		100.0	%		(5.7	)%		(18.8	)%

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 82.6% of our total cost of sales. The cost of goods sold decreased by 18.8% to $559.9 million in the second quarter of 2014 from $689.2 million in the same period of 2013. 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 9.7% and 17.3%, respectively, for the three months ended June 30, 2014 compared with the same period in 2013. As such, the average costs of rebar manufactured decreased 15.9% to $428.4 per ton in the second quarter of 2014 from $509.5 per ton in the same period of 2013.

Six months ended June 30, 2014 compared with six months ended June 30, 2013

	Six months ended
	June 30, 2014							June 30, 2013							Change			Change
in thousands, except metric tons	Volume		Cost of Goods Sold		%			Volume		Cost of Goods Sold		%			Volume %			Cost of Goods Sold %
Longmen Joint Venture		2,622,667	$	1,175,318		99.9	%		2,603,296	$	1,329,315		99.5	%		0.7	%		(11.6	)%
Others		2,035		1,373		0.1	%		86,031		7,096		0.5	%		(97.6	)%		(80.7	)%
Total Cost of Goods Sold		2,624,702	$	1,176,691		100.0	%		2,689,327	$	1,336,411		100.0	%		(2.4	)%		(12.0	)%

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 74.6% of our total cost of sales. The cost of goods sold decreased by 12.0% to $1.2 billion in the six months ended June 30, 2014 from $1.3 billion in the same period of 2013. 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 7.0% and 17.3%, respectively, for the six months ended June 30, 2014 compared with the same period in 2013. As such, the average costs of rebar manufactured decreased 12.2% to $448.1 per ton in the six months ended June 30, 2014 from $510.6 per ton in the same period of 2013.

Gross Profit (Loss)

Three months ended June 30, 2014 compared with three months ended June 30, 2013

	Three months ended
	June 30, 2014								June 30, 2013								Change
in thousands, except metric tons	Volume		Gross Profit (Loss)			Margin %			Volume		Gross Profit (Loss)			Margin %			Gross Profit
Longmen Joint Venture		1,305,127	$	28,230			4.8	%		1,348,173	$	(36,193	)		(5.6	)%		(178.0	)%
Others		1,312		(136	)		(19.5	)%		36,731		657			22.6	%		(120.7	)%
Total Gross Profit (Loss)		1,306,439	$	28,094			4.8	%		1,384,904	$	(35,536	)		(5.4	)%		(179.1	)%

Gross profit for the second quarter of 2014 was $28.1 million, or 4.8% of total sales, compared with a gross loss of $35.5 million, or (5.4)% of total sales in the same period in 2013. The increase in gross margin percentage was mainly attributable to the percentage decrease in the costs of rebar manufactured of 15.9%, which was higher than the percentage decrease in the average rebar selling price of 6.8% compared with the same period of 2013.

47

Six months ended June 30, 2014 compared with six months ended June 30, 2013

	Six months ended
	June 30, 2014								June 30, 2013								Change
in thousands, except metric tons	Volume		Gross Profit (Loss)			Margin %			Volume		Gross Profit (Loss)			Margin %			Gross Profit
Longmen Joint Venture		2,622,667	$	6,010			0.5	%		2,603,296	$	(31,826	)		(2.5	)%		(118.9	)%
Others		2,035		(477	)		(53.2	)%		86,031		357			4.8	%		(233.6	)%
Total Gross Profit (Loss)		2,624,702	$	5,533			0.5	%		2,689,327	$	(31,469	)		(2.4	)%		(117.6	)%

Gross profit for the six months ended June 30, 2014 was $5.5 million, or 0.5% of total sales, compared with a gross loss of $31.5 million, or (2.4)% of total sales in the same period in 2013. The increase in gross margin percentage was mainly attributable to the percentage decrease in the costs of rebar manufactured of 12.2%, which was higher than the percentage decrease in the average rebar selling price of 9.6% compared with the same period of 2013.

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

Three months ended June 30, 2014 compared with three months ended June 30, 2013

(in thousands)	Three months ended
	June 30, 2014			June 30, 2013			Change %
Selling, general and administrative expenses	$	(18,849	)	$	(20,848	)		(9.6	)%
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 benefits, training, and travel expenses decreased by 9.6% to $18.8 million for the three months ended June 30, 2014, compared with $20.8 million for the same period in 2013.

Selling expenses increased by 4.7% to $9.7 million for the three months ended June 30, 2014 compared with $9.3 million in the same period of 2013. The increase was mainly due to the increase in freight expenses as a result of the PRC government’s policy to increase freight train fees in early 2014.

In addition, general and administrative (“G&A”) expenses were approximately $9.1 million and $11.6 million for three months ended June 30, 2014 and 2013, respectively. The 21.0% decrease was mainly due to the decrease in salary expenses, union expenses, and employee education and training expenses in the second quarter of 2014 compared with the same period in 2013.

Six months ended June 30, 2014 compared with six months ended June 30, 2013

(in thousands)	Six months ended
	June 30, 2014			June 30, 2013			Change %
Selling, general and administrative expenses	$	(39,902	)	$	(39,803	)		0.2	%
SG&A expenses as a percentage of total revenue		(3.4	)%		(3.1	)%

SG&A expenses, such as travel expenses and transportation fees, entertainment, employee benefit, training, and travel expenses increased by 0.2% to $39.9 million for the six months ended June 30, 2014, compared to $39.8 million for the same period in 2013.

Selling expenses increased by 4.1% to $18.0 million for six months ended June 30, 2014 as compared to $17.3 million in the same period of 2013. The increase was mainly due to the increase in freight expenses as a result of the PRC government’s policy to increase freight train fees in early 2014.

In addition, general and administrative (“G&A”) expenses were approximately $21.9 million and $22.5 million for six months ended June 30, 2014 and 2013, respectively. The 2.7% decrease was mainly due to the decrease in salary expenses and union expenses.

Change in Fair Value of Profit Sharing Liability

Three months ended June 30, 2014 compared with three months ended June 30, 2013

(in thousands)	Three months ended
	June 30, 2014			June 30, 2013		Change %
Change in fair value of profit sharing liability	$	(2,920	)	$	9,494		(130.8	)%

48

Our profit sharing liability relates to equipment operated by Longmen Joint Venture under a capital lease arrangement. Part of the payments under the capital lease is a portion of our future operating profits. Our estimate of those future profit sharing payments are accounted for as a derivative liability at fair value. In 2013, we considered the recent changes in China’s economic situation, which included a new estimation and downgrade of 2014 GDP by major investment bankers in June 2013, and steel industry outlook reports issued for 2014. As a result, we re-evaluated our projected operating profit (loss) taking into consideration the macroeconomic events in China, as well as our most recent operating results. Due to the continued decrease in our rebar selling price, the market slow-down in the first quarter of 2013, and the lack of gross profit recovery as quickly as expected in 2012, we foresaw a greater downward trend in 2014 through 2016 than previously anticipated in 2012. As our projected profit (loss) decreased in 2013, the fair value of our profit sharing liability was reduced compared with our previous estimates in 2012 and we recognized a gain of $9.5 million in our income from operations for the three months ended June 30, 2013. In 2014, the outlook has not changed significantly. As a result, we recognized a loss on the change in the fair value of the profit sharing liability of $(2.9) million primarily due to the change in fair value related to the passage of time and change in the number of future periods over which the present value of future cash flows was estimated.

Six months ended June 30, 2014 compared with six months ended June 30, 2013

(in thousands)	Six months ended
	June 30, 2014			June 30, 2013		Change %
Change in fair value of profit sharing liability	$	(2,969	)	$	56,273		(105.3	)%

As discussed above, our projected profit (loss) decreased in 2013, and as a result, the fair value of our profit sharing liability was reduced compared with our previous estimates in 2012 and we recognized a gain of $56.3 million in our income (loss) from operations for the three months ended June 30, 2013. In 2014, the outlook has not changed significantly and we recognized a loss on the change in the fair value of the profit sharing liability of $(3.0) million primarily due to the change in fair value related to the passage of time and change in the number of future periods over which the present value of future cash flows was estimated.

Income (Loss) from Operations

Three months ended June 30, 2014 compared with three months ended June 30, 2013

(in thousands)	Three months ended
	June 30, 2014		June 30, 2013			Change %
Income (loss) from operations	$	6,325	$	(46,890	)		(113.5	)%

Income from operations for the three months ended June 30, 2014 was $6.3 million compared with a $46.9 million loss from operations for the same period in 2013. The increase in income from operations was predominantly due to the increase in gross profit offset by the loss from the change in fair value of the profit sharing liability.

Six months ended June 30, 2014 compared with six months ended June 30, 2013

(in thousands)	Six months ended
	June 30, 2014			June 30, 2013			Change %
Loss from operations	$	(37,338	)	$	(14,999	)		148.9	%

Loss from operations for the six months ended June 30, 2014 was $37.3 million compared with a loss of $15.0 million for the same period in 2013. The increase in the loss from operations was predominantly due to the decrease in the gain from the change in fair value of the profit sharing liability, offset by the increase in gross profit.

Other Income (Expense)

Three months ended June 30, 2014 compared with three months ended June 30, 2013

(in thousands)	Three months ended
	June 30, 2014			June 30, 2013			Change %
Interest income	$	4,066		$	3,383			20.2	%
Finance/interest expense		(20,950	)		(16,094	)		30.2	%
Financing cost on capital lease		(5,669	)		(5,122	)		10.7	%
Loss on disposal of equipment		(142	)		(235	)		(39.6	)%
Income from equity investment		54			132			(59.1	)%
Foreign currency transaction gain (loss)		(963	)		98			(1,082.7	)%
Lease income		542			539			0.6	%
Other non-operating income, net		302			521			(42.0	)%
Total other expense, net	$	(22,760	)	$	(16,778	)		35.7	%

49

Total other expense, net, for the three months ended June 30, 2014 was $22.8 million, a 35.7% increase compared with $16.8 million for the same period in 2013. The increase was mainly a result of the $4.9 million increase in finance/interest expense and $1.1 million increase in foreign currency transaction loss from the appreciation of our USD bank loans. The increase in finance/interest expense was mainly a result of the increase in finance charges from bank notes receivable redemptions prior to maturity and the amount borrowed from banks and third parties in the second quarter of 2014 compared with the same period in 2013. As a result, notes receivable early redemption expenses for the three months ended June 30, 2014 amounted to $12.8 million, a $6.3 million or 96.9% increase from $ 6.5 million for the same period in 2013. At the same time, interest expense on loan borrowings for the three months ended June 30, 2014 amounted to $8.2 million, a $2.3 million or 21.9% decrease from $10.5 million for the same period in 2013.

Six months ended June 30, 2014 compared with six months ended June 30, 2013

(in thousands)	Six months ended
	June 30, 2014			June 30, 2013			Change %
Interest income	$	7,258		$	5,822			24.7	%
Finance/interest expense		(44,559	)		(35,856	)		24.3	%
Financing cost on capital lease		(10,755	)		(10,217	)		5.3	%
Gain (loss) on disposal of equipment		(96	)		96			(200.0	)%
Income from equity investment		67			90			(25.6	)%
Foreign currency transaction gain (loss)		(1,817	)		126			(1,542.1	)%
Lease income		1,088			1,071			1.6	%
Other non-operating income, net		126			790			(84.1	)%
Total other expense, net	$	(48,688	)	$	(38,078	)		27.9	%

Total other expense, net, for the six months ended June 30, 2014 was $48.7 million, a 27.9% increase compared with $38.1 million for the same period in 2013. The increase was mainly a result of the $8.7 million increase in finance/interest expense and $1.9 million increase in foreign currency transaction loss from the appreciation of our USD bank loans. The increase in finance/interest expense was mainly a result of the increase in finance charges from bank notes receivable redemptions prior to maturity and the amount borrowed from banks and third parties for the six months ended June 30, 2014 compared with the same period in 2013. As a result, notes receivable early redemption expenses for the six months ended June 30, 2014 amounted to $26.9 million, a $9.6 million or 55.5% increase from $17.3 million for the same period in 2013, and interest expense on loan borrowings for the six months ended June 30, 2014 amounted to $17.7 million, a $0.8 million or 4.3% decrease from $18.5 million for the same period in 2013.

Income Taxes

For the three months ended June 30, 2014 and 2013, we had a total tax provision of $107 thousand and $105 thousand, respectively, from our profitable subsidiaries. For the three months ended June 30, 2014, 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 thus we provided a 100% valuation allowance for the deferred tax assets. No deferred income tax provision was recorded for the three months ended June 30, 2014 as the deferred tax assets had been fully reserved.

For the three months ended June 30, 2014 and 2013, we had effective tax rates of (0.7)% and (0.2)%, respectively.

For the six months ended June 30, 2014 and 2013, we had a total tax provision of $112 thousand and $176 thousand, respectively, from our profitable subsidiaries. For the six months ended June 30, 2014, 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 thus we provided a 100% valuation allowance for the deferred tax assets. As a result, no deferred income tax provision was recorded for the six months ended June 30, 2014 as the deferred tax assets had been fully reserved.

For the six months ended June 30, 2014 and 2013, we had effective tax rates of (0.1)% and (0.3)%, respectively.

Net Loss

Three months ended June 30, 2014 compared with three months ended June 30, 2013

(in thousands)	Three months ended
	June 30, 2014			June 30, 2013			Change %
Net loss	$	(16,542	)	$	(63,773	)		(74.1	)%

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Six months ended June 30, 2014 compared with six months ended June 30, 2013

(in thousands)	Six months ended
	June 30, 2014			June 30, 2013			Change %
Net Loss	$	(86,138	)	$	(53,253	)		61.8	%

Net Loss attributable to General Steel Holdings, Inc.

Three months ended June 30, 2014 compared with three months ended June 30, 2013

(in thousands)	Three months ended
	June 30, 2014			June 30, 2013			Change %
Net loss	$	(16,542	)	$	(63,773	)		(74.1	)%
Less: Net loss attributable to the non-controlling interest		(5,523	)		(23,955	)		(76.9	)%
Net loss attributable to General Steel Holdings, Inc.	$	(11,019	)	$	(39,818	)		(72.3	)%

Net loss attributable to us for the three months ended June 30, 2014 was $11.0 million compared with $39.8 million for the same period in 2013. The decrease in net loss attributable to us for the three months ended June 30, 2014 was mainly a result of the $63.6 million increase in gross profit offset by a $12.4 million decrease in the gain from the change in the fair value of our profit sharing liability and a $4.9 million increase in finance/interest expense.

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.

Six months ended June 30, 2014 compared with six months ended June 30, 2013

(in thousands)	Six months ended
	June 30, 2014			June 30, 2013			Change %
Net income (loss)	$	(86,138	)	$	(53,253	)		61.8	%
Less: Net income (loss) attributable to the non-controlling interest		(31,555	)		(16,538	)		90.8	%
Net income (loss) attributable to General Steel Holdings, Inc.	$	(54,583	)	$	(36,715	)		48.7	%

Net loss attributable to us for the six months ended June 30, 2014 was $54.6 million compared with $36.7 million for the same period in 2013. The increase in net loss attributable to us for the six months ended June 30, 2014 was mainly a result of the $37.0 million increase in gross profit offset by a $59.2 million decrease in the gain from the change in the fair value of our profit sharing liability and a $8.7 million increase in finance/interest expense.

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 June 30, 2014, our current liabilities exceeded our current assets by approximately $1.3 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 guarantees 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 are of the opinion that we have sufficient funds to meet our working capital requirements and debt obligations as they become due for at least the next year from the reporting date. As a result, our unaudited condensed consolidated financial statements for the period ended June 30, 2014 have been prepared on a going concern basis.

As of June 30, 2014, we had cash and restricted cash aggregating $492.9 million, of which $448.1 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.

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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 exchange control regulation in China, and, as a result, we may have difficulty distributing any dividends outside of China due to PRC exchange control regulations that restrict our ability to convert RMB into U.S. Dollars.

Under applicable PRC regulations, foreign-invested enterprises in China 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 China is required to set aside at least 10% 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% 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 convertible from a company’s “capital account,” which includes foreign direct investments and loans, without the prior approval of the SAFE.

We have previously raised money in the U.S. capital markets which provided the capital needed for our operations and for General Steel Investment Co, Ltd. (“General Steel Investment”). Thus the foreign currency restrictions and regulations in the PRC on dividend distributions will not have a material impact on the liquidity, financial condition and results of operations of General Steel Holdings, Inc. 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 of our production lines. In addition to the 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 our Maoming Hengda facility and will consume less energy when running at maximum efficiencies compared with 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 production in September 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 line was completed and put into t production in February 2014. 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.

Short-term Notes Payable

As of June 30, 2014, we had $875.5 million in short-term notes payable liabilities, which were secured by restricted cash of $430.2 million and restricted notes receivable of $51.0 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. However, we are required to pay a transaction fee of 0.05% of the notes’ value. In addition, the banks usually require us to deposit either a certain amount of cash at the bank as a guarantee deposit or provide notes receivable as security.

Short-term Loans – Banks

As of June 30, 2014, we had $201.7 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 19 in our Notes to the unaudited condensed consolidated financial statements included in this report.

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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 4.6% to 9.6% 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 4.6% to 9.6% 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 June 30, 2014 and 2013 amounted to $229.1 million and $188.1 million, respectively, which were eliminated in our consolidated financial statements. The financial cost related to financing sales for the three months ended June 30, 2014 and 2013 amounted to $0.8 million and $1.5 million, respectively.

Total financing sales for the six months ended June 30, 2014 and 2013 amounted to $459.6 million and $353.3 million, respectively, which were eliminated in our consolidated financial statements. The financial cost related to financing sales for the six months ended June 30, 2014 and 2013 amounted to $1.7 million and $3.1 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 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 June 30, 2014 and December 31, 2013 were (5.4) and (6.5), respectively. As of June 30, 2014, our current liabilities exceed current assets (excluding deferred lease income) by $1.3 billion.

Longmen Joint Venture, as our most important subsidiary, accounted for a majority of our total sales. As such, the majority of our working capital needs come from Longmen Joint Venture. Our ability to continue as a going concern depends heavily on Longmen Joint Venture’s operations, as well as its ability to obtain external financial supports, including but not limited to lines of credit from banks and vendor financing. If Longmen Joint Venture does not maintain a sufficient level of financial support by renewing its financing terms with existing financing sources or obtaining new sources of financial support, there may be an immediate negative impact on our operations and ability to continue as a going concern. Longmen Joint Venture has obtained different types of financial support, which include lines of credit from banks, vendor financing, financing sales, other financing and sales representative financing.

For more details and terms about our financial support, see Note 2(d) in our Notes to the condensed consolidated financial statements.

With the financial support from the banks and the companies discussed in Note 2(d) in our Notes to the condensed consolidated financial statements, 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 June 30, 2015. The detailed breakdown of Longmen Joint Venture’s estimated cash flow items are listed below.

	Cash inflow (outflow) (in millions)
	For the twelve months ending June 30, 2015
Estimated current liabilities over current assets (excluding deferred lease income) as of June 30, 2014 (unaudited)	$	(1,327.5	)
Projected cash financing and outflows:
Cash provided by lines of credit from banks		147.9
Cash provided by vendor financing		893.8
Cash provided by other financing		362.4
Cash provided by sales representatives		23.1
Cash projected to be used in operations in the twelve months ending June 30, 2015		(28.8	)
Cash projected to be used for financing cost in the twelve months ending June 30, 2015		(63.7	)
Net projected change in cash for the twelve months ending June 30, 2015	$	7.2

As a result, the unaudited condensed consolidated financial statements for the six month period ended June 30, 2014 have been prepared on a going concern basis.

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Cash-flow

Operating Activities

Net cash provided by (used in) operating activities for the six months ended June 30, 2014 and 2013 was $121.7 million and $(61.4) million, respectively. This change was mainly due to the combination of the following factors:

· The impact of some non-cash items included in net income (loss) of $61.0 million for the six months ended June 30, 2014, compared with $(3.8) million in the same period in 2013. The non-cash items include the following:

- Depreciation, amortization and depletion;

- Change in fair value of derivative liabilities - warrants;

- Change in fair value of profit sharing liability.

- (Gain) loss on disposal of equipment and intangible assets;

- Provision for doubtful accounts;

- Reservation of mine maintenance fee;

- Stock issued for service and compensation;

- Amortization of deferred financing cost on capital lease;

- (Income) loss from equity investments;

- Foreign currency transaction (gain) loss;

- Deferred lease income; and

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

- Notes receivable: The decrease was mainly due to less notes receivable being received as a form of payment in the first six months of 2014 compared with the same period in 2013;

- Prepaid taxes: The decrease was mainly due to the decrease in prepaid VAT purchase taxes along with the decrease in purchases in the first six months of 2014 compared with the same period in 2013;

- Accounts payable - related parties: The increase in accounts payable - related parties was mainly due to Longmen Joint Venture making more purchases from related parties during the six months ended June 30, 2014 compared with the same period in 2013. Pursuant to the supplier financing agreements signed between Longmen Joint Venture and its suppliers, those suppliers agreed not to demand certain cash payments for a certain period;

- Customer deposits, including related parties: The increase in customer deposits, including related parties, was mainly due to our customers making more prepayments to us in the six months ended June 30, 2014. These deposits were subsequently recognized as sales after June 30, 2014 in accordance with our sales recognition policy. 

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

- Advance on inventory purchases, including related parties: The increase was mainly due to more advance payments made to both third parties and related parties for raw material purchases to meet future production requirements. Advance payments are a prevailing requirement on iron ore purchases in the steel production industry; and

- Accounts payable: The decrease in accounts payable was mainly due to Longmen Joint Venture making fewer purchases from third parties during the six months ended June 30, 2014 compared with the same period in 2013. Pursuant to the supplier financing agreements signed between Longmen Joint Venture and its suppliers, those suppliers agreed not to demand certain cash payments for a certain period.

Investing activities

Net cash used in investing activities was $164.5 million for the six months ended June 30, 2014 compared with $102.2 million for the six months ended June 30, 2013. Fluctuations in cash outflow between the two periods was mainly due to the increase in cash used for equipment and intangible asset purchases for the six months ended June 30, 2014, which amounted to $112.7 million, compared with $52.4 million in the same period in 2013.

Financing activities

Net cash provided by financing activities was $56.0 million for the six months ended June 30, 2014 compared with $183.9 million for the six months ended June 30, 2013. Compared with the same period in 2013, the decrease of cash inflow from financing activities was mainly driven by the following:

· Short term notes payable: We borrowed more notes payables to banks to pay suppliers for the six months ended June 30, 2014 compared with the same period in 2013 and repaid more notes payable from the banks during the quarter;

· Short term loans – bank: We borrowed more from banks during the six months ended June 30, 2014 compared with the same period in 2013;

· Short term loans – others: We repaid fewer loans from third parties during the six months ended June 30, 2014 compared with the same period in 2013; and

· Short term loans – related parties: We repaid fewer loans from related parties during the six months ended June 30, 2014 compared with the same period in 2013.

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The cash inflow was offset by the following cash outflow:

· Short term loans: We repaid more money to banks during the six months ended June 30, 2014 as they became due compared with the same period in 2013 and borrowed less short term loans from the other parties and related parties during the quarter as we generated positive operating cash flows in the first quarter of 2014 allowing us to decrease borrowings on short term loans; and

· Deposits due to sales representatives: We received fewer deposits from sales representatives during the three months ended June 30, 2014 compared with the same period in 2013.

Impact of Inflation

We are subject to commodity price risks arising from price fluctuations in the market prices of our 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.

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) was spent on the technical upgrade and renovation of our converters and $0.88 billion (RMB 5.5 billion) was spent 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 June 30, 2014 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, operating income, payments collected from customers in advance and stock issuances. We have presented in the tables below a summary of the most significant contractual obligations and commercial commitments, in order to assist in the review of this information within the context of our consolidated financial position, results of operations, and cash flows.

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The following tables summarize our contractual obligations as of June 30, 2014 and the effect these obligations are expected to have on our liquidity and cash flows in future periods.

	Payment due by period
			Less than
Contractual obligations	Total		1 year		1-3 years		3- 5 years		5 years after
	(in thousands)
Notes payable	$	875,479	$	875,479	$	-	$	-	$	-
Bank loans (1)		201,673		201,673		-		-		-
Other loans, including related parties		218,391		218,391		-		-		-
Deposits due to sales representatives, including related parties		23,093		23,093		-		-		-
Lease obligations		23,168		1,055		1,132		1,132		19,849
Construction obligations - Longmen Joint Venture (2)		326,316		326,316		-		-		-
Long term loan – Shaanxi Steel		72,124		62,374		9,750		-		-
Capital lease obligations		391,274		6,443		128,950		28,558		227,323
Profit sharing liability		164,067		-		-		-		164,067
Total	$	2,295,585	$	1,714,824	$	139,832	$	29,690	$	411,239

(1) 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 the bank’s credit reevaluation. These loans amount includes estimated interest payments as well as principal repayment.

(2) Upon completion of the construction obligations – Longmen Joint Venture, if Longmen Joint Venture is unable to repay the obligation when due, Shaanxi Steel will support Longmen Joint Venture for such obligations.

As of June 30, 2014, Longmen Joint Venture guaranteed bank loans for related parties and third parties, including lines of credit, amounting to $265.4 million, as follows:

Nature of guarantee	Guarantee amount		Guaranty Due Date
	(In thousands)
Line of credit	$	153,563	Various from July 2014 to August 2015
Three-party financing agreements		19,500	Various from July 2014 to May 2015
Confirming storage		52,975	Various from August 2014 to April 2015
Financing by the rights of goods delivery in future		39,406	Various from July to October 2014
Total	$	265,444

 As of June 30, 2014, we did not accrue any liability for the amount we have guaranteed for third parties and related parties because those parties are current in their payment obligations and we have not experienced any losses 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

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 the Company in accordance with 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 a 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.

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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% directly owned subsidiary. Upon entering into the Unified Management Agreement, 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.

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 powers, rights and roles of both bodies were considered to determine which has the power to direct the activities of Longmen Joint Venture, and by extension, whether we continue to have the power to direct Longmen Joint Venture’s activities after this Supervisory Committee was formed. The Supervisory Committee, on which we hold 2 out of 4 seats, requires a ¾ majority vote, whereas the Board of Directors, on which we hold 4 out of 7 seats, requires a simple majority vote. 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 over the operations of Longmen Joint Venture and as such, have the power to direct the activities of the VIE that most significantly impact Longmen Joint Venture’s economic performance. We believe that the Unified Management Agreement between Longmen Joint Venture and Shaanxi Coal is in compliance with PRC law and is legally enforceable. As such, we have the power 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.

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

As discussed in Note 2(c) to the consolidated financial statements – Consolidation of VIE, 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.

Longmen Joint Venture has two 100% owned subsidiaries, Yuxin Trading Co., Ltd. (“Yuxin”) and Yuteng Trading Co., Ltd. (“Yuteng”). 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 invested in by Longmen Joint Venture in June 2007 and July 2008, respectively. 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.

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We have determined that it is appropriate for Longmen Joint Venture to consolidate Hualong and Huatianyulong 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 majority voting rights in each entity, and thereby, the power of control, to Longmen Joint Venture.

Revenue recognition

We follow U.S. GAAP regarding revenue recognition. Sales revenue is 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 met are recorded as customer deposits. Sales revenue represents 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.

We infrequently engage in trading transactions in which we act as an agent between the suppliers and the customers. The trading arrangements are such that the suppliers are the primary obligors, we do not have any general inventory risk, physical inventory loss risk or credit risk, and we do not have latitude in establishing prices. Sales and cost of goods sold from these trading arrangements are recorded at the net amount retained in accordance with ASC 605-45. 

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 receivables 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 the 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 leases	20 Years
Other equipment	5 Years
Transportation equipment	5 Years

We periodically re-evaluate the useful lives of our plant and equipment to determine whether events subsequent to their acquisition or other circumstances warrant any revision of the estimated useful lives.

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 determine whether any impairment of long-lived assets exists using the projected undiscounted 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.

As of June 30, 2014, the fair value of our plant and equipment exceeded our carrying value of these assets by approximately 75%. We used the estimated discounted cash flow from these assets to determine their fair value. The key assumptions that were included in the model are 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. We believe these assumptions provide us the best estimates of projecting our future cash flows from these assets, net of any related cash outflow of our costs, expenses and taxes related to these revenues. In the future, the estimated fair value of these assets may be lower than their current fair value, which could result in future impairment charges if potential events occur to further reduce the current selling price or product demand in the steel market or increase our costs that are associated with our revenues. In addition, competitive pricing pressure and changes in interest rates could materially and adversely affect our estimates of future net cash flows to be generated by our long-lived assets, and thus could result in future impairment losses.

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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 financial statements and accompanying notes. Significant accounting estimates reflected in our financial statements include the useful lives of and impairment for property, plant and equipment, 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 leases, the present value of the net minimum lease payments for the capital leases and the fair value of the profit sharing 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. The carrying value of the long term loans-related party approximates its fair value as of the reporting date as their stated interest rates approximate 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 the 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 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.

The warrants issued in conjunction with notes we issued in December 2007 were carried at fair value. The warrants were accounted for as derivative liabilities and recorded at their fair value, with the change in fair value charged or credited to income each period.  The warrants expired unexercised on May 13, 2013. Prior to their expiration, the fair value of the warrants was estimated using a binomial lattice model, using level 3 inputs.

The profit sharing liability associated with our capital lease at Longmen Joint Venture is accounted for as a derivative liability and is recorded at its fair value, with the change in fair value charged or credited to income each period.  We determine the fair value of the profit sharing liability using Level 3 inputs by considering the present value of Longmen Joint Venture’s projected profits/losses, discounted based on our average borrowing rate, which is currently 7.3%.

The fair value of the profit sharing liability will change each period as a result of (a) any changes in our estimate of Longmen Joint Venture’s projected profits/losses over the remaining term of the agreement, (b) any change in the discount rate used, based on changes in our current or expected borrowing rate, (c) the change in fair value related to the passage of time and change in the number of future periods over which the present value of future cash flows is estimated and (d) any difference between the previously estimated operating results for the current period and actual results.

Each period, we consider whether the discount rate based on our average borrowing rate should be adjusted based upon the current and expected future financial condition of the Company. To date, we have not considered any adjustment to be necessary based upon, but not limited to, the following assumptions:

· because the joint venture partner of Longmen Joint Venture is a state-owned enterprise with an excellent credit history, PRC banks grant similar credit treatment to Longmen Joint Venture in terms of credit availability

· the current average borrowing rate of enterprises in the steel industry in the PRC is similar to this borrowing rate

· the current new/renewal borrowing rates of the Company’s bank loans are similar to prior periods

· the People’s Bank of China has not recently adjusted any borrowing rate

· PRC bank interest rates are not industry specific. The downtrend in the steel industry did not materially impact the bank borrowing rates for steel companies

· the bank interest rates are assessed by each individual bank and governed by the Chinese banking regulatory bodies. Reports from credit rating research firms are not commonly used by PRC banks

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The projected profits/losses in Longmen Joint Venture are based upon, but not limited to, the following assumptions:

· 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 borrowing;

· interest rate index;

· gross national product index;

· industry index; and

· government policy.

Income Taxes

We did not conduct any business and did not maintain any branch office in the United States during the six months ended June 30, 2014 and 2013. 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 Coastal 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%.

Capital lease obligations

Iron and steel production facilities

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 new iron and steel making facilities constructed by Shaanxi Steel, including one sintering machine, two converters, two blast furnaces and other auxiliary systems. 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 of $2.3 million (RMB 14.6 million), based on Shaanxi Steel’s cost to construct the new iron and steel making facilities, 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 was 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. The initial lease liability was reduced by the initial fair value of the profit sharing component which, as discussed above, is recognized as a separate derivative instrument financial liability carried at fair value. See Note 16 – “Profit sharing liability” in the Notes to Condensed Consolidated Financial Statements.

Energy-saving equipment

During 2013, Longmen Joint Venture entered into capital lease agreements for energy-saving equipment to be installed throughout the production chain. Under these agreements, Longmen Joint Venture uses the energy-saving equipment for which the vendors are responsible for the design, purchase, installation, and on-site testing, as well as the ownership rights to the equipment during the lease periods. The lease periods, which vary between four to six years, begin upon the completion of the equipment installation, testing, and the issuance of the energy-saving rate reports to be agreed upon by both the vendors and Longmen Joint Venture. As the ownership rights of the equipment transfer to Longmen Joint Venture at the end of the lease periods, these agreements are accounted for as capital leases.

The minimum lease payments are based on the energy cost saved during the lease periods, which is determined by the estimated annual equipment operating hours per the lease agreements. If the actual annual equipment operating hours are less than the estimated amount, the lease periods may be extended, subject to further negotiation and agreement between us and the vendors. If the actual annual equipment operating hours exceed the estimated amount, we are obligated to make additional lease payments based on the additional energy cost saved during the lease period and recognize the additional lease payments as contingent rent expense. For the six months ended June 30, 2014 and 2013, no contingent rent expense was incurred under these lease agreements.

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Profit sharing liability

The profit sharing liability component of the capital lease obligation was 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. The profit sharing liability is accounted for separately from the fixed portion of the capital lease obligation (see Note 15 - “Capital lease obligation” in the Notes to Condensed Consolidated Financial Statements) and is accounted for as a derivative instrument in accordance with ASC 815-10-15-83. The estimated fair value of the profit sharing liability is reassessed at the end of each reporting period, with any change in fair value charged or credited to income as “Change in Fair Value of Profit Sharing Liability”. See Note 2(h) – “Financial instruments” and Note 16 – “Profit sharing liability” in the Notes to Condensed Consolidated Financial Statements for details.

Payments to Shaanxi Steel for the profit sharing liability are not required until net cumulative profits are achieved. Based on the performance of the Asset Pool, no profit sharing payment was made during the six months ended June 30, 2014 and 2013.

New Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. The new guidance also requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. The amendments in the ASU are effective in the first quarter of 2015 for public organizations with calendar year ends. Early adoption is permitted. We do not expect the adoption of this guidance will have a significant impact on the our financial position and results of operations.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606. This Update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards. The guidance in this Update supersedes the revenue recognition requirements in Topic 605, Revenue Recognition and most industry-specific guidance. The core principle of the guidance is that an entity should recognize revenue to illustrate the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance also includes a cohesive set of disclosure requirements that will provide users of financial statements with comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from a reporting organization’s contracts with customers. This ASU is effective retrospectively for fiscal years, and interim periods within those years beginning after December 15, 2016 for public companies and 2017 for non-public entities. Management is evaluating the effect, if any, on our financial position and results of operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

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 June 30, 2014. 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.

As a result of comments received from the Staff of the United States Securities and Exchange Commission following the Staff’s review of certain of our prior quarterly and annual reports, and based on subsequent communications between the Staff of the Commission and us, we concluded that the classification, display and disclosure of our profit sharing liability (which is accounted for at fair value as a derivative instrument liability) had been incomplete and inconsistent. As a result, we have restated our financial statements and related disclosures for each of the reporting periods from the period ended June 30, 2011 to the period ended March 31, 2014. The restatements are set out in our Form 10-K/A for the year ended December 31, 2013 and Form 10-Q/A for the quarter ended March 31, 2014. Although the restatements did not result in any restatement of the reported balance sheets nor adjustment of reported net income for any period presented, because of the restatement, management concluded that the restatements resulted from control deficiencies that represent a material weakness in our disclosure controls and procedures.

As a result of such material weakness, our Chief Executive Officer and Chief Financial Officer concluded that our Company’s disclosure controls and procedures were not effective as of June 30, 2014.

Despite the existence of the material weakness in our disclosure controls and procedures, we believe that the condensed consolidated financial statements included in this Form 10-Q present, in all material respects, our financial position, results of operations and comprehensive income (loss) and cash flows for the periods presented in conformity with U.S. GAAP.

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Remediation

Our management has dedicated significant resources to correcting the control deficiencies and to ensuring that we take proper steps to improve our internal control over financial reporting in the area of financial statement disclosures.

We have taken a number of remediation actions that we believe will improve the effectiveness of our internal control over financial reporting including the following:

· We have engaged an outside professional consulting firm to supplement our efforts to improve our internal control over financial reporting;

· We have engaged and will continue to engage accounting experts to review complex accounting transactions and our financial statement disclosures related to such transactions.

Management believes the foregoing efforts will effectively remediate the material weakness described above.

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.

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/A for the year ended December 31, 2013, which was filed with the SEC on August 19, 2014.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On February 3, 2014, in connection with two services agreements relating to investor relations and consulting services, both dated as of January 14, 2014, we issued 80,000 shares of common stock. The total cost of the stock issuance was $80,800. The shares were valued at $1.01 per share, the quoted market price at the time the services were provided. The recipients are accredited investors and the issuances are exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”) in reliance on an exemption from registration provided pursuant to Section 4(2) of the Securities Act.

ITEM 3. DEFAULT UPON SENIOR SECURIITES

Not Applicable.

ITEM 4. MINE SAFETY DISCLOSURE

Not Applicable.

ITEM 5. OTHER INFORMATION

Not Applicable.

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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, 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, 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, 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, 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.  

63

  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: August 19, 2014	By: /s/ Zuosheng Yu
	Zuosheng Yu
	Chief Executive Officer and Chairman
Date: August 19, 2014	By: /s/ John Chen
	John Chen
	Director and Chief Financial Officer

64

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: August 19, 2014	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: August 19, 2014	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 June 30, 2014 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: August 19, 2014	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 June 30, 2014 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: August 19, 2014	By:	/s/ John Chen
		John Chen
		Chief Financial Officer

XML

Related party transactions and balances (Tables)

6 Months Ended

Jun. 30, 2014

Schedule Of Related Party Sales [Table Text Block]

 The following chart summarizes sales to related parties for the three and six months ended June 30, 2014 and 2013. 

Name of related parties	Relationship	Three months ended June 30, 2014		Three months ended June 30, 2013
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	25,150	$	82,286
Shaanxi Yuchang Trading Co., Ltd	Significant influence by Long Steel Group*		-		5,975
Shaanxi Haiyan Trade Co., Ltd	Significant influence by Long Steel Group*		805		5,004
Shaanxi Shenganda Trading Co., Ltd	Significant influence by Long Steel Group*		26,967		18,393
Shaanxi Steel	Majority shareholder of Long Steel Group		626		448
Shaanxi Coal and Chemical Industry Group Co., Ltd.	Shareholder of Shaanxi Steel		16,420		12,792
Shaanxi Long Steel Group Baoji Steel Rolling Co., Ltd	Subsidiary of Long Steel Group		5,117		114
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		4,291		11,289
Total		$	79,376	$	136,301

*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.

Name of related parties	Relationship	Six months ended June 30, 2014		Six months ended June 30, 2013
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	69,950	$	162,961
Sichuan Yutai Trading Co., Ltd	Significant influence by Long Steel Group		-		72
Shaanxi Yuchang Trading Co., Ltd	Significant influence by Long Steel Group		-		20,410
Shaanxi Haiyan Trade Co., Ltd	Significant influence by Long Steel Group		820		15,596
Shaanxi Shenganda Trading Co., Ltd	Significant influence by Long Steel Group		47,703		36,679
Shaanxi Steel	Majority shareholder of Long Steel Group		1,097		1,411
Shaanxi Coal and Chemical Industry Group Co., Ltd.	Shareholder of Shaanxi Steel		21,389		14,626
Shaanxi Long Steel Group Baoji Steel Rolling Co., Ltd	Subsidiary of Long Steel Group		11,735		2,113
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		8,888		31,293
Total		$	161,582	$	285,161

Schedule Of Related Party Purchases [Table Text Block]

The following charts summarize purchases from related parties for the three and six months ended June 30, 2014 and 2013.

Name of related parties	Relationship	Three months ended June 30, 2014		Three months ended June 30, 2013
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	100,504	$	170,005
Hancheng Haiyan Coking Co., Ltd	Noncontrolling shareholder of Long Steel Group		40,179		53,193
Xi’an Pinghe Metallurgical Raw Material Co., Ltd	Noncontrolling shareholder of Long Steel Group		5,016		742
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		-		1
Shaanxi Huafu New Energy Co., Ltd	Significant influence by the Long Steel Group		7,561		8,560
Beijing Daishang Trading Co., Ltd.	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		-		1,432
Tianwu General Steel Material Trading Co., Ltd.	Investee of General Steel (China)		73,940		-
Tianjin General Quigang Pipe Co., Ltd	Partially owned by CEO through indirect shareholding**		4,253		-
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding**		17,721		-
Others	Entities either owned or have significant influence by our affiliates or management		1,037		166
Total		$	250,211	$	234,099

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

Name of related parties	Relationship	Six months ended June 30, 2014		Six months ended June 30, 2013
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	252,276	$	274,498
Hancheng Haiyan Coking Co., Ltd	Noncontrolling shareholder of Long Steel Group		84,267		116,991
Xi’an Pinghe Metallurgical Raw Material Co., Ltd	Noncontrolling shareholder of Long Steel Group		5,920		12,497
Shaanxi Long Steel Group Baoji Steel Rolling Co., Ltd	Subsidiary of Long Steel Group		-		53
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		-		211
Shaanxi Huafu New Energy Co., Ltd	Significant influence by the Long Steel Group		14,221		18,089
Beijing Daishang Trading Co., Ltd.	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		-		4,909
Tianwu General Steel Material Trading Co., Ltd.	Investee of General Steel (China)		97,279		-
Tianjin General Quigang Pipe Co., Ltd	Partially owned by CEO through indirect shareholding		8,528		-
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		45,640		-
Others	Entities either owned or have significant influence by our affiliates or management		1,084		236
Total		$	509,215	$	427,484

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

Loans receivable – related parties:

Name of related parties	Relationship	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Teamlink Investment Co., Ltd	Partially owned by CEO through indirect shareholding		4,540		4,540
Total		$	4,540	$	4,540

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

Accounts receivables – related parties:

Name of related parties	Relationship	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	1,316	$	548
Shaanxi Shenganda Trading Co., Ltd	Significant influence by Long Steel Group		-		-
Tianjin Daqiuzhuang Steel Plates	Partially owned by CEO through indirect shareholding		19		19
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		2,586		-
Shaanxi Steel	Majority shareholder of Long Steel Group		1,866		1,741
Others			1		634
Total		$	5,788	$	2,942

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	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	379	$	406
Shaanxi Steel	Majority shareholder of Long Steel Group		48,532		46,439
Tianjin General Quigang Pipe Co., Ltd	Partially owned by CEO through indirect shareholding		1,238		1,247
Tianjin Dazhan Industry Co, Ltd	Partially owned by CEO through indirect shareholding		-		491
Beijing Shenhua Xinyuan Metal Materials Co., Ltd.	Partially owned by CEO through indirect shareholding		4,865		4,901
Victory Energy Resource Co., Ltd	Partially owned by CEO through indirect shareholding		2,231		-
Others	Entities either owned or have significant influence by our affiliates or management		738		622
Total		$	57,983	$	54,106

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	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	-	$	9,123
Shaanxi Shenganda Trading Co., Ltd.	Significant influence by Long Steel Group		13,088		25,607
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		1,379		10,343
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		61,440		16,158
Tianjin General Qiugang Pipe Co., Ltd	Partially owned by CEO through indirect shareholding		202		555
Maoming Shengze Trading Co., Ltd	Partially owned by CEO through indirect shareholding		43,137		21,197
Others	Entities either owned or have significant influence by our affiliates or management		33		20
Total		$	119,279	$	83,003

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

Accounts payable - related parties:

Name of related parties	Relationship	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Hancheng Haiyan Coking Co., Ltd	Noncontrolling shareholder of Longmen Joint Venture	$	62,890	$	58,163
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		164,073		134,758
Shaanxi Coal and Chemical Industry Group Co., Ltd.	Shareholder of Shaanxi Steel		3,507		29,990
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		972		958
Xi’an Pinghe Metallurgical Raw Material Co., Ltd	Noncontrolling shareholder of Long Steel Group		2,036		8,714
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		9,862		1
Henan Xinmi Kanghua Fire Refractory Co., Ltd	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		702		716
Beijing Daishang Trading Co., Ltd	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		36		1,004
Tianwu General Steel Material Trading Co., Ltd.	Investee of General Steel (China)		17,299		759
Others	Entities either owned or have significant influence by our affiliates or management		726		630
Total		$	262,103	$	235,692

Schedule Of Related Party Transactions, Short Term Loans Related Parties [Table Text Block]

Short-term loans - related parties:

Name of related parties	Relationship	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Shaanxi Steel	Majority shareholder of Long Steel Group	$	81,250	$	49,110
Shaanxi Coal and Chemical Industry Group Co., Ltd	Shareholder of Shaanxi Steel		71,287		28,216
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		-		33,183
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		-		8,178
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		13		6,548
Yangpu Capital Automobile	Partially owned by CEO through indirect shareholding		1,446		1,458
Total		$	153,996	$	126,693

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	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Shaanxi Steel	Majority shareholder of Long Steel Group	$	62,374	$	53,013
Total		$	62,374	$	53,013

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.

Name of related parties	Relationship	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Tianjin Hengying Trading Co, Ltd	Partially owned by CEO through indirect shareholding	$	377	$	380
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		44,730		43,636
Shaanxi Steel	Majority shareholder of Long Steel Group		48,670		44,363
Wendlar Investment & Management Group Co., Ltd	Common control under CEO		1,053		895
Yangpu Capital Automobile	Partially owned by CEO through indirect shareholding		362		291
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		470		473
Maoming Shengze Trading Co., Ltd	Partially owned by CEO through indirect shareholding		2,201		1,745
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		346		921
Total		$	98,209	$	94,079

Schedule Of Related Party Transactions, Customer Deposits Related Parties [Table Text Block]

Customer deposits – related parties:

Name of related parties	Relationship	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Shaanxi Yuchang Trading Co., Ltd	Significant influence by Long Steel Group	$	10	$	10
Shaanxi Coal and Chemical Industry Group Co., Ltd	Shareholder of Shaanxi Steel		13,749		-
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		8,378		15,038
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		16		2,748
Shaanxi Shenganda Trading Co., Ltd	Significant influence by Long Steel Group		-		275
Tianwu General Steel Material Trading Co., Ltd.	Investee of General Steel (China)		113,549		46,521
Shaanxi Haiyan Trade Co., Ltd	Significant influence by Long Steel Group		7,186		-
Others			-		289
Total		$	142,888	$	64,881

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	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Gansu Yulong Trading Co., Ltd.	Significant influence by Long Steel Group	$	1,073	$	1,408
Shaanxi Yuchang Trading Co., Ltd	Significant influence by Long Steel Group		585		589
Total		$	1,658	$	1,997

Schedule Of Related Party Transactions, Long Term Loans Related Parties [Table Text Block]

Long-term loans – related party:

Name of related party	Relationship	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Shaanxi Steel	Majority shareholder of Long Steel Group	$	9,750	$	19,644
Total		$	9,750	$	19,644

Schedule Of Related Party Transactions, Deferred Lease Income [Table Text Block]

Deferred lease income

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Beginning balance	$	77,444	$	77,199
Less: Lease income realized		(1,088)		(2,158)
Exchange rate effect		(565)		2,403
Ending balance		75,791		77,444
Current portion		(2,171)		(2,187)
Noncurrent portion	$	73,620	$	75,257

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:

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Machinery	$	601,398	$	605,839
Less: accumulated depreciation		(90,460)		(76,740)
Carrying value of leased assets	$	510,938	$	529,099

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Summary of significant accounting policies (Details 11) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
General Steel (China) [Member]
Summary Of Significant Accounting Policies [Line Items]
Original Cost	$ 3,856
Expires on	2050 & 2053
Longmen Joint Venture [Member]
Summary Of Significant Accounting Policies [Line Items]
Original Cost	24,097
Expires on	2048 & 2052
Maoming Hengda [Member]
Summary Of Significant Accounting Policies [Line Items]
Original Cost	$ 2,697
Expires on	2054

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Summary of significant accounting policies (Details 5) (USD $) In Millions, unless otherwise specified			6 Months Ended		6 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2014 Vendor Financing [Member]	Jun. 30, 2014 Vendor Financing [Member] Company A [Member]	Jul. 30, 2014 Vendor Financing [Member] Company A [Member]	Jun. 30, 2014 Vendor Financing [Member] Company B [Member]	Jan. 22, 2014 Vendor Financing [Member] Company B [Member]	Jun. 30, 2014 Vendor Financing [Member] Company C [Member]
Summary Of Significant Accounting Policies [Line Items]
Financing Amount	$ 147.9	$ 893.8	$ 243.8	$ 243.8	$ 162.5	$ 162.5	$ 487.5
Financing period covered			July 30, 2014 – July 30, 2019		January 22, 2014 – January 22, 2017		October 1, 2013 – March 31, 2016

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Intangible assets, net (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life			33 years 1 month 6 days
Amortization of Intangible Assets	$ 0.3	$ 0.3	$ 0.5	$ 0.5
Depletion	$ 0.04	$ 0.02	$ 0.05	$ 0.10

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Summary of significant accounting policies (Details 12) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Summary Of Significant Accounting Policies [Line Items]
Net investment	$ 16,710	$ 16,943
Xi'an Delong Powder Engineering Materials Co., Ltd.[Memebr]
Summary Of Significant Accounting Policies [Line Items]
Year acquired	2007
Net investment	1,098	1,215
Owned Percentage	24.10%	24.10%
Tianwu General Steel Material Trading Co., Ltd.[Member]
Summary Of Significant Accounting Policies [Line Items]
Year acquired	2010
Net investment	$ 15,612	$ 15,728
Owned Percentage	32.00%	32.00%

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Deposits due to sales representatives (Details Textual) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Deposits Due To Sales Representative Including Related Parties	$ 23.1	$ 26.3

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Equity (Details Textual) (Consultant [Member], USD $)	6 Months Ended
	Jun. 30, 2014
Consultant [Member]
Exercise Price Of Common Stock	$ 1.01
Stock Issued During Period, Shares, Issued for Services	80,000

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Summary of significant accounting policies (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Summary Of Significant Accounting Policies [Line Items]
Sales	$ 508,637	$ 517,350	$ 1,020,642	$ 1,019,781
Gross profit (loss)	28,094	(35,536)	5,533	(31,469)
Income (loss) from operations	6,325	(46,890)	(37,338)	(14,999)
Net loss attributable to controlling interest	(11,019)	(39,818)	(54,583)	(36,715)
Variable Interest Entities and Subsidiary [Member]
Summary Of Significant Accounting Policies [Line Items]
Sales	587,314	650,741	1,181,328	1,297,489
Gross profit (loss)	28,229	(36,193)	6,010	(31,826)
Income (loss) from operations	8,128	(44,684)	(31,166)	(9,747)
Net loss attributable to controlling interest	$ (8,077)	$ (34,944)	$ (46,111)	$ (26,619)

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Inventories (Tables)

6 Months Ended

Jun. 30, 2014

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

Inventories consist of the following:

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Supplies	$	23,451	$	21,040
Raw materials		147,780		164,301
Finished goods		47,713		42,977
Less: allowance for inventory valuation		(9,973)		(15,397)
Total inventories	$	208,971	$	212,921

Summary Of Inventory Valuation Allowance [Table Text Block]

Changes in the allowance for inventory valuation are as follows:

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Beginning balance	$	15,397	$	9,585
Addition		9,996		15,194
Less: write-off		(15,319)		(9,757)
Exchange rate effect		(101)		375
Ending balance	$	9,973	$	15,397

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Warrants (Details Textual) (USD $) In Millions, except Share data, unless otherwise specified	Jun. 30, 2014	May 13, 2013	Dec. 31, 2007
Convertible Notes And Warrant [Line Items]
Debt Instrument, Face Amount		$ 40	$ 40
Class of Warrant or Right, Outstanding	3,900,871

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Debt (Details 2) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Debt Instrument [Line Items]
Short term loans - others	$ 64,395	$ 62,067
Longmen Joint Venture Loans from various unrelated companies and individuals [Member]
Debt Instrument [Line Items]
Short term loans - others	17,099	22,720
Longmen Joint Venture Loans from financing sales [Member]
Debt Instrument [Line Items]
Short term loans - others	41,119	33,124
Maoming Hengda Loans from one unrelated parties and one related party [Member]
Debt Instrument [Line Items]
Short term loans - others	$ 6,177	$ 6,223

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Related party transactions and balances (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014		Jun. 30, 2013
Related Party Transaction [Line Items]
Revenue from Related Parties	$ 79,376	$ 136,301	$ 161,582		$ 285,161
Long Steel Group [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture		Noncontrolling shareholder of Longmen Joint Venture
Revenue from Related Parties	25,150	82,286	69,950		162,961
Sichuan Yutai Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Revenue from Related Parties			0		72
Shaanxi Yuchang Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship			Significant influence by Long Steel Group	[1]
Revenue from Related Parties	0	5,975	0		20,410
Shaanxi Haiyan Trade Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship			Significant influence by Long Steel Group	[1]
Revenue from Related Parties	805	5,004	820		15,596
Shaanxi Shenganda Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship			Significant influence by Long Steel Group	[1]
Revenue from Related Parties	26,967	18,393	47,703		36,679
Shaanxi Steel [Member]
Related Party Transaction [Line Items]
Related Party Relationship			Majority shareholder of Long Steel Group
Revenue from Related Parties	626	448	1,097		1,411
Shaanxi Coal and Chemical Industry Group Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship			Shareholder of Shaanxi Steel
Revenue from Related Parties	16,420	12,792	21,389		14,626
Shaanxi Long Steel Group Baoji Steel Rolling Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship			Subsidiary of Long Steel Group
Revenue from Related Parties	5,117	114	11,735		2,113
Shaanxi Junlong Rolling Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Investee of Long Steel Group		Investee of Long Steel Group
Revenue from Related Parties	$ 4,291	$ 11,289	$ 8,888		$ 31,293

[1] 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.

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Loans receivable - related parties (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Loans Receivable Related Parties [Line Items]
Loans receivable - related parties	$ 4,540	$ 4,540
Teamlink Investment Co., Ltd [Member]
Loans Receivable Related Parties [Line Items]
Loans receivable - related parties	$ 4,540	$ 4,540

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Commitment and contingencies (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Commitment And Contingencies [Line Items]
Operating Leases, Rent Expense	$ 0.6	$ 0.8	$ 1.5	$ 1.6
Contractual Obligation	265.4		265.4
Subsequent Event [Member]
Commitment And Contingencies [Line Items]
Contractual Obligation	$ 326.3		$ 326.3

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Debt (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Debt Instrument [Line Items]
Percentage Of Transaction Fee			0.05%
Restricted Cash and Cash Equivalents Guarantee For Notes Payable	$ 430.2		$ 430.2		$ 399.4
Restricted Notes Receivable Guarantee For Notes Payable	51.0		51.0		231.7
Short Term Borrowings, Default	5.2		5.2		6.4
Financing Sales	229.1	188.1	459.6	353.3
Financial Services Costs	0.8	3.1	1.7	3.1
Interest Costs Capitalized	0.2	0.6	0.8	0.8
Interest Expense, Debt	8.2	10.5	17.7	18.5
General Steel China Notes Payable To Various Banks In China [Member]
Debt Instrument [Line Items]
Restricted Cash and Cash Equivalents Guarantee For Notes Payable	11.4		11.4		16.4
Longmen Joint Venture Loans From Various Unrelated Companies and Individuals [Member]
Debt Instrument [Line Items]
Debt, Weighted Average Interest Rate	5.60%		5.60%		5.20%
Longmen Joint Venture Notes Payable To Various Banks In China [Member]
Debt Instrument [Line Items]
Restricted Cash and Cash Equivalents Guarantee For Notes Payable	418.8		418.8		383.0
Restricted Notes Receivable Guarantee For Notes Payable	51.0		51.0		231.7
Debt Instrument Maturity Dates			various dates from July to December 2014
Debt To Asset Ratio	95.40%		95.40%
Longmen Joint Venture Loans From Shaanxi Steel Group [Member]
Debt Instrument [Line Items]
Debt, Weighted Average Interest Rate	6.60%		6.60%
General Steel China Loans From Yangpu Capital Automobile [Member]
Debt Instrument [Line Items]
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 [Line Items]
Debt, Weighted Average Interest Rate	7.00%		7.00%
Longmen Joint Venture Loans from various banks in China [Member]
Debt Instrument [Line Items]
Restricted Cash and Cash Equivalents Guarantee For Notes Payable	5.9		5.9		0
Restricted Notes Receivable Guarantee For Notes Payable	56.1		56.1		163.9
Debt Instrument Maturity Dates			various dates from August 2014 to June 2015
Debt, Weighted Average Interest Rate	6.10%		6.10%		6.30%
General Steel China Loans From Various Banks In China [Member]
Debt Instrument [Line Items]
Restricted Cash and Cash Equivalents Guarantee For Notes Payable	$ 8.1		$ 8.1		$ 0
Debt, Weighted Average Interest Rate	7.10%		7.10%		7.20%
Debt To Asset Ratio	20.00%		20.00%		89.70%
Maximum [Member] | Longmen Joint Venture Loans From Various Unrelated Companies and Individuals [Member]
Debt Instrument [Line Items]
Debt, Weighted Average Interest Rate	9.60%		9.60%
Maximum [Member] | Longmen Joint Venture Loans From Financing Sales [Member]
Debt Instrument [Line Items]
Debt, Weighted Average Interest Rate	9.60%		9.60%
Maximum [Member] | General Steel China Loans From Various Banks In China [Member]
Debt Instrument [Line Items]
Debt To Asset Ratio					70.00%
Minimum [Member] | Longmen Joint Venture Loans From Various Unrelated Companies and Individuals [Member]
Debt Instrument [Line Items]
Debt, Weighted Average Interest Rate	4.60%		4.60%
Minimum [Member] | Longmen Joint Venture Loans From Financing Sales [Member]
Debt Instrument [Line Items]
Debt, Weighted Average Interest Rate	4.60%		4.60%
Minimum [Member] | General Steel China Loans From Various Banks In China [Member]
Debt Instrument [Line Items]
Debt To Asset Ratio					20.00%

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Taxes (Details 2) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Taxes [Line Items]
VAT taxes payable	$ 2,496	$ 2,211
Income taxes payable	185	173
Other taxes	1,500	2,244
Totals	$ 4,181	$ 4,628

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Deferred lease income (Details Textual)	3 Months Ended		6 Months Ended		12 Months Ended			3 Months Ended		10 Months Ended		12 Months Ended
	Jun. 30, 2014 USD ($)	Jun. 30, 2013 USD ($)	Jun. 30, 2014 USD ($)	Jun. 30, 2013 USD ($)	Dec. 31, 2013 USD ($)	Jul. 30, 2014 USD ($)	Dec. 31, 2012 USD ($)	Dec. 31, 2010 Longmen Joint Venture [Member] USD ($)	Dec. 31, 2010 Longmen Joint Venture [Member] CNY	Mar. 30, 2011 Longmen Joint Venture [Member] USD ($)	Mar. 30, 2011 Longmen Joint Venture [Member] CNY	Dec. 31, 2011 Longmen Joint Venture [Member] USD ($)	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 Lease Income [Line Items]
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												14,500,000	89,300,000	14,600,000	89,500,000
Deferred Revenue Leases Lease Income Realized	542,000	539,000	1,088,000	1,071,000	2,158,000					7,100,000	43,900,000
Deferred Revenue, Leases, Net	75,791,000		75,791,000		77,444,000		77,199,000
Deferred Revenue, Leases, Current	$ 2,171,000		$ 2,171,000		$ 2,187,000	$ 2,200,000

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Taxes (Details Textual) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Dec. 31, 2012
Taxes [Line Items]
Preferential Tax Rate			15.00%
Deferred Tax Assets, Operating Loss Carryforwards, Subject to Expiration	$ 536,800,000		$ 536,800,000
Value Added Tax Receivable	2,800,000		2,800,000		3,500,000
Value Added Tax On Sales	178,600,000	164,800,000	331,500,000	353,200,000
Value Added Tax On Purchases	174,500,000	154,400,000	326,400,000	338,200,000
Deferred Tax Assets, Valuation Allowance	100,982,000		100,982,000		97,569,000	72,891,000
Tax Initiative Extension Period			10 years
Deferred Tax Asset Valuation Allowance Percentage			100.00%
Deferred Tax Assets Valuation Period			5 years
UNITED STATES
Taxes [Line Items]
Valuation Allowance, Deferred Tax Asset, Change in Amount			100,000
Deferred Tax Assets, Valuation Allowance	$ 800,000		$ 800,000
Operating Loss Carryforwards, Date Expiration			The net operating loss carry forwards for United States income taxes amounted to $2.4 million, which may be available to reduce future years taxable income.
Deferred Tax Asset Valuation Allowance Percentage			100.00%
Longmen Joint Venture [Member]
Taxes [Line Items]
Effective Income Tax Rate Reconciliation, Percent, Total			15.00%
Subsidiaries [Member]
Taxes [Line Items]
Effective Income Tax Rate Reconciliation, Percent, Total			25.00%
Maximum [Member]
Taxes [Line Items]
Value Added Tax Rate			17.00%
Minimum [Member]
Taxes [Line Items]
Value Added Tax Rate			13.00%

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Customer deposits (Details Textual) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Customer Deposits [Line Items]
Customer Deposits Including Related Parties	$ 279,200,000	$ 152,700,000
Customer deposits - related parties	$ 142,888,000	$ 64,881,000

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Debt (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Debt Instrument [Line Items]
Short term notes payable	$ 875,479	$ 1,017,830
Longmen Joint Venture Notes Payable To Various Banks In China [Member]
Debt Instrument [Line Items]
Short term notes payable	864,104	988,364
General Steel China Notes Payable To Various Banks In China [Member]
Debt Instrument [Line Items]
Short term notes payable	$ 11,375	$ 29,466

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Retirement plan

6 Months Ended

Jun. 30, 2014

Compensation and Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

Note 20 – 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 for the three months ended June 30, 2014 and 2013 amounted to $3.0 million and $1.9 million, respectively, and for the six months ended June 30, 2014 and 2013 amounted to $5.8 million and $4.1 million, respectively.

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Summary of significant accounting policies (Details 7) (USD $)	6 Months Ended		12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2015 Scenario, Forecast [Member]
Summary Of Significant Accounting Policies [Line Items]
Current liabilities over current assets (excluding deferred lease income) as of June 30, 2014 (unaudited)			$ (1,327,500,000)
Projected cash financing and outflows:
Cash provided by lines of credit from banks			147,900,000
Cash provided by vendor financing			893,800,000
Cash provided by other financing			362,400,000
Cash provided by sales representatives			23,100,000
Cash projected to be used in operations in the twelve months ending June 30, 2015			(28,800,000)
Cash projected to be used for financing cost in the twelve months ending June 30, 2015	(164,509,000)	(102,242,000)	(63,700,000)
Net projected change in cash for the twelve months ending June 30, 2015			$ 7,200,000

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Organization and Operations (Details Textual) In Millions, unless otherwise specified	6 Months Ended		6 Months Ended		6 Months Ended	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2014 General Steel Investment Co Ltd [Member]	Jun. 30, 2014 Longmen Joint Venture [Member]	Apr. 29, 2011 Longmen Joint Venture [Member]	Jun. 30, 2014 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%	60.00%	60.00%
Iron and Steel Making Facilities							$ 605.8	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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Debt (Details 4) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Debt Instrument [Line Items]
Current maturities of long-term loans - related party	$ (62,374)	$ (53,013)
Long-term loans - related party	9,750	19,644
Longmen Joint Venture Loans from Shaanxi Steel Group [Member]
Debt Instrument [Line Items]
Long-term loans - related party	$ 72,124	$ 72,657

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Related party transactions and balances (Details 9) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Related Party Transaction [Line Items]
Current maturities of long-term loans - related parties	$ 62,374	$ 53,013
Shaanxi Steel [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Majority shareholder of Long Steel Group
Current maturities of long-term loans - related parties	$ 62,374	$ 53,013

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Capital lease obligations (Tables)

6 Months Ended

Jun. 30, 2014

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 obligations for the next five years as of June 30, 2014:

Year ending June 30,	Capital Lease Obligations Minimum Lease Payments
	(in thousands)
2015	$	7,567
2016		5,804
2017		181,884
2018		33,280
2019		30,108
Thereafter		338,666
Total minimum lease payments		597,309
Less: amounts representing interest		(206,036)
Ending balance	$	391,273

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Summary of significant accounting policies (Details 9) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Summary Of Significant Accounting Policies [Line Items]
Beginning balance	$ 162,295	$ 328,828
Change in fair value of profit sharing liability:
Change in estimate of future operating profits	0	(174,821)
Change in discount rate	0	0
Change in the number of future periods over which the present value of future cash flows is estimated	5,778	16,872
Difference between the previously estimated operating results for the current period and actual results	(2,809)	(16,620)
Change in derivative liabilities - warrants	0	1
Exchange rate effect	(1,197)	8,035
Ending balance	$ 164,067	$ 162,295

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Plant and equipment, net (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Property, Plant and Equipment [Line Items]
Depreciation	$ 23.2	$ 21.4	$ 47.3	$ 42.5
Lease Expiration Date			Apr. 30, 2031
Assets Held under Capital Leases [Member]
Property, Plant and Equipment [Line Items]
Depreciation	$ 7.7	$ 7.1	$ 15.6	$ 14.1

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Subsequent events (Details Textual) (USD $)			6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014 Subsequent Event [Member] Subscription Arrangement [Member]
Common Stock Purchase Price Of Subscription Agreement			$ 1.50
Description Of Purchase Price Subscription Agreement			The Purchase Price represents a 23% premium to the volume weighted average closing price of the Common Stock from March 5, 2014 to July 11, 2014, which ranged from $0.90 to $1.47 per share of common stock during the period
Common Stock, Par Or Stated Value Per Share	$ 0.001	$ 0.001	$ 0.001
Common Stock, Shares Subscribed but Unissued			5,000,000
Common Stock, Value, Subscriptions			$ 7,500,000
Equity Method Investment, Ownership Percentage			21.70%

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Inventories (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013	Dec. 31, 2012
Inventory [Line Items]
Supplies	$ 23,451	$ 21,040
Raw materials	147,780	164,301
Finished goods	47,713	42,977
Less: allowance for inventory valuation	(9,973)	(15,397)	(9,585)
Total inventories	$ 208,971	$ 212,921

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Summary of significant accounting policies (Details 4) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
Summary Of Significant Accounting Policies [Line Items]
Amount of Line of Credit	$ 147.9
China Minsheng Bank [Member]
Summary Of Significant Accounting Policies [Line Items]
Amount of Line of Credit	97.5
Repayment Date	Nov. 28, 2015
China CITIC Bank [Member]
Summary Of Significant Accounting Policies [Line Items]
Amount of Line of Credit	32.5
Repayment Date	Jun. 16, 2015
Bank Of Communication [Member]
Summary Of Significant Accounting Policies [Line Items]
Amount of Line of Credit	$ 17.9
Repayment Date	Jul. 17, 2015

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Accounts receivable (including related parties), net

6 Months Ended

Jun. 30, 2014

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:  

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Accounts receivable	$	6,078	$	5,131
Less: allowance for doubtful accounts		(801)		(1,053)
Accounts receivable – related parties		5,788		2,942
Net accounts receivable	$	11,065	$	7,020

Changes in the allowance for doubtful accounts are as follows:

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Beginning balance	$	1,053	$	1,367
Charge to expense		-		96
Less: recovery		(244)		(449)
Exchange rate effect		(8)		39
Ending balance	$	801	$	1,053

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Inventories (Details 1) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Inventory [Line Items]
Beginning balance	$ 15,397	$ 9,585
Addition	9,996	15,194
Less: write-off	(15,319)	(9,757)
Exchange rate effect	(101)	375
Ending balance	$ 9,973	$ 15,397

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Summary of significant accounting policies (Details)	6 Months Ended
	Jun. 30, 2014	Apr. 29, 2011
General Steel Investment Co., Ltd. [Member]
Summary Of Significant Accounting Policies [Line Items]
Equity Method Investment, Ownership Percentage	100.00%
Entity Incorporation, State Country Name	British Virgin Islands
General Steel (China) Co., Ltd. ("General Steel (China)") [Member]
Summary Of Significant Accounting Policies [Line Items]
Equity Method Investment, Ownership Percentage	100.00%
Entity Incorporation, State Country Name	PRC
Baotou Steel - General Steel Special Steel Pipe Joint Venture Co., Ltd. [Member]
Summary Of Significant Accounting Policies [Line Items]
Equity Method Investment, Ownership Percentage	80.00%
Entity Incorporation, State Country Name	PRC
Yangpu Shengtong Investment Co., Ltd. ("Yangpu Shengtong") [Member]
Summary Of Significant Accounting Policies [Line Items]
Equity Method Investment, Ownership Percentage	99.10%
Entity Incorporation, State Country Name	PRC
Tianjin Qiu Steel Investment Co., Ltd. ("Qiu Steel") [Member]
Summary Of Significant Accounting Policies [Line Items]
Equity Method Investment, Ownership Percentage	98.70%
Entity Incorporation, State Country Name	PRC
Longmen Joint Venture [Member]
Summary Of Significant Accounting Policies [Line Items]
Equity Method Investment, Ownership Percentage	60.00%	60.00%
Entity Incorporation, State Country Name	PRC
Maoming Hengda Steel Company, Ltd. ("Maoming Hengda") [Member]
Summary Of Significant Accounting Policies [Line Items]
Equity Method Investment, Ownership Percentage	99.00%
Entity Incorporation, State Country Name	PRC

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Summary of significant accounting policies (Policies)

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Basis Of Accounting, Policy [Policy Text Block]

(a) Basis of presentation

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

Subsidiary		Percentage 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. (“Yangpu Shengtong”)	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

Prior to November 19, 2013, the Company held a 60.0% equity interest in Tianwu General Steel Material Trading Co., Ltd. (“Tianwu”). 32% interest was held by General Steel (China) and 28% interest was held by Yangpu Shengtong. On November 19, 2013, the Company sold its 28% equity interest of Tianwu held by Yangpu Shengtong to Tianjin Dazhan Industry Co., Ltd., a related party through indirect common ownership, for $13.6 million (RMB 84.3 million) while retaining 32% interest held by General Steel (China). As a result of this transaction, the Company met the criteria under ASC 810-10-40-4 to deconsolidate Tianwu at the disposal date and recognized a gain of $1.0 million in the fourth quarter of 2013 in accordance with ASC 810-10-40-5. At the same time, General Steel (China)’s remaining 32% interest is accounted for as an investment in unconsolidated subsidiaries using the equity method. See Note 2(t) - Investments in unconsolidated entities for details.

Consolidation, Policy [Policy Text Block]

(b) Principles of consolidation – subsidiaries

The accompanying 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.

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 of Directors 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. The Supervisory Committee, in which the Company holds 2 out of 4 seats, requires a ¾ majority vote, while the Board of Directors, on 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. 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. If the Unified Management Agreement cannot be enforced, the Company would not consolidate Longmen Joint Venture as a VIE. However, the current PRC legal system has not limited the Company’s ability to enforce the Unified Management Agreement nor does the Company believe it is likely to do so in the future. The Company makes an 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:

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Current assets	$	990,397	$	1,282,054
Plant and equipment, net		1,245,144		1,262,144
Other noncurrent assets		114,372		29,014
Total assets		2,349,913		2,573,212
Total liabilities		(2,891,359)		(3,040,879)
Net liabilities	$	(541,446)	$	(467,667)

VIE and its subsidiaries’ liabilities consist of the following:

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Current liabilities:
Short term notes payable	$	864,104	$	988,364
Accounts payable		409,550		393,816
Accounts payable - related parties		261,437		235,116
Short term loans - bank		149,348		267,688
Short term loans - others		58,218		55,844
Short term loans - related parties		152,550		125,236
Current maturities of long-term loans – related party		62,374		56,614
Other payables and accrued liabilities		39,685		37,028
Other payables - related parties		93,742		88,914
Customer deposits		66,595		87,661
Customer deposits - related parties		45,589		18,359
Deposit due to sales representatives		21,435		24,343
Deposit due to sales representatives – related parties		1,658		1,997
Taxes payable		2,930		3,357
Deferred lease income		2,171		2,187
Capital lease obligations, current		6,443		4,321
Intercompany payable to be eliminated		21,263		21,420
Total current liabilities		2,259,092		2,412,265
Non-current liabilities:
Long term loans - related parties		9,750		16,043
Deferred lease income - noncurrent		73,620		75,257
Capital lease obligations, noncurrent		384,830		375,019
Profit sharing liability at fair value		164,067		162,295
Total non-current liabilities		632,267		628,614
Total liabilities of consolidated VIE	$	2,891,359	$	3,040,879

	Three months ended June 30, 2014		Three months ended June 30, 2013
	(in thousands)		(in thousands)
Sales	$	587,314	$	650,741
Gross profit (loss)	$	28,229	$	(36,193)
Income (loss) from operations	$	8,128	$	(44,684)
Net loss attributable to controlling interest	$	(8,077)	$	(34,944)

	Six months ended June 30, 2014		Six months ended June 30, 2013
	(in thousands)		(in thousands)
Sales	$	1,181,328	$	1,297,489
Gross profit (loss)	$	6,010	$	(31,826)
Loss from operations	$	(31,166)	$	(9,747)
Net loss attributable to controlling interest	$	(46,111)	$	(26,619)

Longmen Joint Venture has two 100% owned subsidiaries, Yuxin Trading Co., Ltd. (“Yuxin”) and Yuteng Trading Co., Ltd. (“Yuteng”). Longmen Joint Venture also 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 invested in by Longmen Joint Venture in June 2007 and July 2008, respectively. 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. The assets, liabilities and the operating results of Hualong are immaterial to the Company’s consolidated financial statements as of June 30, 2014 and December 31, 2013, respectively, and for the three and six months ended June 30, 2014 and 2013, respectively.

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 assets, liabilities and the operating results of Huatianyulong are immaterial to the Company’s consolidated financial statements as of June 30, 2014 and December 31, 2013, respectively, and for the three and six months ended June 30, 2014 and 2013, respectively.

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 majority voting rights in each entity, and thereby, the power of control, to Longmen Joint Venture.

Liquidity Disclosure [Policy Text Block]

(d) Liquidity

The Company’s accounts have been prepared under the 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 options (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 the 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 June 30, 2014 and December 31, 2013 were (5.4) and (6.5), respectively. As of June 30, 2014, the Company’s current liabilities exceed current assets by $1.3 billion.

Longmen Joint Venture, as the most important entity of the Company, accounted for a majority of the 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, as well as its ability to obtain external financial supports, including but not limited to lines of credit from banks and vendor financing. If Longmen Joint Venture does not maintain a sufficient level of financial support by renewing its financing terms with existing financing sources or obtaining new sources of financial support, there may be an immediate negative impact on the Company’s operations and its ability to continue as a going concern. Longmen Joint Venture has obtained different types of financial support, which are listed below by category:

Lines of credit

The Company has lines of credit from the listed major banks totaling $147.9 million with expiration dates ranging from June 16, 2015 to November 28, 2015.

Banks	Amount of Line of Credit (in millions)		Repayment Date
China Minsheng Bank		97.5	November 28, 2015
China CITIC Bank		32.5	June 16, 2015
Bank of Communication		17.9	July 17, 2015
Total	$	147.9

Management expects the above lines of credit will be extended after the repayment dates.

As of the date of this report, the Company utilized $50.4 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 $811.5 million with the following companies:

Company	Financing Period	Financing Amount (in millions)
Company A – related party	July 30, 2014 – July 30, 2019	$	243.8
Company B – third party	January 22, 2014 – January 22, 2017		162.5
Company C – third party	October 1, 2013 – March 31, 2016		487.5
Total		$	893.8

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 many years. On July 30, 2014, Company A signed a five-year agreement with Longmen Joint Venture to finance its coke purchases up to $243.8 million. Company B signed a three-year agreement with Longmen Joint Venture on January 22, 2014 to finance its coke purchases up to $162.5 million. According to the above signed agreements, both Company A and B will not demand any cash payments during their respective financing periods. As of the date of this report, our payables to Company A and Company B were approximately $68.2 million and $65.4 million, respectively.

Company C is a Fortune 500 Company. On June 28, 2013, Company C signed an agreement with Longmen Joint Venture to finance Longmen Joint Venture’s purchase of iron ore for an amount up to $487.5 million to commence on October 1, 2013 and end on March 31, 2015. On August 1, 2014, Company C signed an extension agreement with the Company and extended the financing terms to March 31, 2016. 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. As of the date of this report, our payable to Company C is approximately $1.9 million.

Other financing

On February 20, 2014, March 5, 2014, April 22, 2014 and April 23, 2014 Longmen Joint Venture signed payment extension agreements with each company listed below. In total, Longmen Joint Venture can obtain $362.0 million in financial support from two-year and three-year balancing payment extensions granted by the following five companies:

Company	Financing Period	Financing Amount (in millions)
Company D – related party	April 22, 2014 – April 22, 2017	$	81.3
Company E – related party	April 23, 2014 – April 23, 2017		86.0
Company F – related party	April 22, 2014 – April 22, 2017		81.3
Company G – related party	March 5, 2014 – March 5, 2016		56.9
Company H – related party	March 5, 2014 – March 5, 2016		56.9
Total		$	362.4

As of the date of this report, our payables to Company D, Company E, Company F, Company G and Company H are approximately $16.3 million, $21.5 million, $19.0 million, $9.9 million and $1.0 million, 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 June 30, 2014, Longmen Joint Venture has collected a total amount of $23.1 million. Historically, this amount is quite stable and we do not expect a big fluctuation in this amount for the next twelve months from June 30, 2014 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 June 30, 2015. The detailed breakdown of Longmen Joint Venture’s estimated cash flows are listed below.

	Cash inflow (outflow) (in millions)
	For the twelve months ending June 30, 2015
Current liabilities over current assets (excluding deferred lease income) as of June 30, 2014 (unaudited)	$	(1,327.5)
Projected cash financing and outflows:
Cash provided by lines of credit from banks		147.9
Cash provided by vendor financing		893.8
Cash provided by other financing		362.4
Cash provided by sales representatives		23.1
Cash projected to be used in operations in the twelve months ending June 30, 2015		(28.8)
Cash projected to be used for financing costs in the twelve months ending June 30, 2015		(63.7)
Net projected change in cash for the twelve months ending June 30, 2015	$	7.2

As a result, the consolidated financial statements as of June 30, 2014 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 consolidated financial statements and footnotes. Significant accounting estimates reflected in the Company’s consolidated financial statements include the fair value of the profit sharing liability, the useful lives of and impairment of property, plant and equipment, potential losses on uncollectible receivables, the allowance for inventory valuation, the interest rate used in the financing sales, the fair value of the assets recorded under capital leases and the present value of the net minimum lease payments of the capital leases. 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 price fluctuation of raw materials and energy prices as part of its normal operations. The Company does not utilize 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 June 30, 2014 and December 31, 2013 amounted to $ 492.9 million and $ 431.3 million, including $ 0.6 million and $ 2.0 million that were deposited in Shaanxi Coal and Chemical Industry Group Financial Co., Ltd., a related party, respectively. As of June 30, 2014, $ 0.1 million cash in the bank was covered by insurance. The Company has not experienced any losses in its bank accounts and deposits its cash in a number of different banks to minimize its exposure to credit risk.

The Company’s five major customers are all distributors and collectively represented 31.8% and 24.4% of the Company’s total sales for the three and six months ended June 30, 2014, respectively. None of the five major customers individually accounted for more than 10% of the total sales for the three months or the six months ended June 30, 2014. The Company’s five major customers represented 27.8% and 23.3% of the Company’s total sales for the three months and six months ended June 30, 2013, respectively. None of the five major customers individually accounted for more than 10% of the total sales for the three months or the six months ended June 30, 2013. None of the five major customers has accounts receivable, including related parties, with the Company as of June 30, 2014 and December 31, 2013, respectively.

For the three and six months ended June 30, 2014, the Company purchased 47.4% and 43.8% 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 months ended June 30, 2014 and one of the five major suppliers individually accounted for 12.7% of the total purchases for the six months ended June 30, 2014. The purchases from the five major suppliers represented 45.0% and 38.4% of the Company’s total purchases for the three months and six months ended June 30, 2013, respectively. Two of the five major suppliers individually accounted for 15.6% and 10.7% of the total purchases for the three months ended June 30, 2013, respectively, and one of the five major suppliers individually accounted for 11.6% of the total purchases for the six months ended June 30, 2013. These five vendors accounted for 38.3% and 29.1% of total accounts payable, including related parties, as of June 30, 2014 and December 31, 2013, respectively. None of the five major suppliers individually accounted for more than 10% of total accounts payable as June 30, 2014 and and December 31, 2013.

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 and VIE 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 statements of operations 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 $3.0 million and $0.7 million as of June 30, 2014 and December 31, 2013, respectively. The balance sheet amounts, with the exception of equity, at June 30, 2014 and December 31, 2013 were translated at 6.15 RMB and 6.11 RMB to $1.00, respectively. The equity accounts were stated at their historical rate. The average translation rates applied to the statements of operations for the three months ended June 30, 2014 and 2013 were 6.16 RMB and 6.20 RMB, respectively. The average translation rates applied to the statements of operations for the six months ended June 30, 2014 and 2013 were 6.14 RMB and 6.24 RMB, respectively. Cash flows are also translated at average translation rates for the periods; as a result,, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances in 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 standard 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 investments, 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 carrying value of the long term loans-related party approximates its fair value as of the reporting date as their stated interest rates approximate current rates available.

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.

The Company analyzes all financial instruments with features of both liabilities and equity, pursuant to which warrants previously issued by the Company were required to be recorded as a liability at fair value and marked to market each reporting period. The warrants were accounted for as derivative liabilities and recorded at their fair value, with the change in fair value charged or credited to income each period.  The warrants expired unexercised on May 13, 2013. Prior to their expiration, the fair value of the warrants was estimated using a binomial lattice model, using level 3 inputs.

As described in Note 15 - Capital lease obligations, payments related to the capital lease of the Asset Pool consist of two components: (1) a fixed monthly payment of $2.3 million (RMB 14.6 million), based on Shaanxi Steel’s cost to construct the assets, to be paid for the 20 year term of the Unified Management Agreement; and (2) 40% of any remaining pre-tax profits from the Asset Pool, which includes Longmen Joint Venture and the constructed iron and steel making facilities. The aforementioned profit sharing component meets the definition of a derivative instrument under ASC 815-10-15-83 and, accordingly, the profit sharing liability is accounted for separately as a derivative liability. It was recognized initially at its estimated fair value at inception. The estimated fair value is adjusted each reporting period, with changes in the estimated fair value of the profit sharing liability charged or credited to operating income each period.

The Company determines the fair value of the profit sharing liability using Level 3 inputs by considering the present value of Longmen Joint Venture’s projected profits/losses, discounted based on our average borrowing rate, which is currently 7.3%.

The fair value of the profit sharing liability will change each period as a result of (a) any changes in our estimate of Longmen Joint Venture’s projected profits/losses over the remaining term of the Agreement, (b) any change in the discount rate used, based on changes in our current or expected borrowing rate, (c) the change in fair value related to the passage of time and change in the number of future periods over which the present value of future cash flows is estimated and (d) any difference between the previously estimated operating results for the current period and actual results.

Each period, the Company considers whether the discount rate based on the Company’s average borrowing rate should be adjusted based upon the current and expected future financial condition of the Company. To date, the Company has not considered any adjustment to be necessary based upon, but not limited to, the following assumptions:

· because the joint venture partner of Longmen Joint Venture is a state-owned enterprise with an excellent credit history, PRC banks grant similar credit treatment to Longmen Joint Venture in terms of credit availability

· the current average borrowing rate of enterprises in the steel industry in the PRC is similar to this borrowing rate

· the current new/renewal borrowing rates of the Company’s bank loans are similar to prior periods

· the People’s Bank of China has not recently adjusted any borrowing rate

· PRC bank interest rates are not industry specific. The downtrend in the steel industry did not materially impact the bank borrowing rates for steel companies

· the bank interest rates are assessed by each individual bank and governed by the Chinese banking regulatory bodies. Reports from credit rating research firms are not commonly used by PRC banks

The projected profits/losses in Longmen Joint Venture are based upon, but not limited to, the following assumptions:

· 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

· interest rate index

· gross national product index

· industry index

· government policy

From inception to December 31, 2012, the assumptions underlying the estimated fair value did not change significantly. Beginning in the first quarter of 2013, the assumptions related to unit selling prices and costs were revised, resulting in a reduction of the estimated profit sharing liability. These assumptions were further revised during 2013. The above assumptions were again reviewed by the Company at June 30, 2014 but no major change was deemed necessary to the assumptions used at December 31, 2013. For the six months ended June 30, 2014, the Company recognized a loss on the change in the fair value of the profit sharing liability of $2.9 million due to a $5.7 million reduction in the present value discount offset by a $2.8 million gain resulting from the Asset Pool’s operating results for the six months ended June 30, 2014 being slightly less favorable than previously estimated as of December 31, 2013.

The estimated fair value of the profit sharing liability at June 30, 2014 is $164.1 million. Changes in any of the assumptions used to estimate the fair value of the profit sharing liability will change the liability accordingly. If we were to reduce the projected bank borrowing rate used to discount the liability to a present value by 1.0% and other factors remained unchanged, our profit sharing liability as of June 30, 2014 would have been $187.3 million and we would increase the loss from the change in the fair value of the profit sharing liability by $23.2 million. If we were to 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 June 30, 2014 would have been $162.2 million and we would decrease the loss from the change in the fair value of the profit sharing liability by $1.9 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 June 30, 2014:

(in thousands)	Carrying Value as of June 30, 2014		Fair Value Measurements at June 30, 2014 Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Profit sharing liability	$	164,067	$	-	$	-	$	164,067
Total	$	164,067	$	-	$	-	$	164,067

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, 2013:

(in thousands)	Carrying Value as of December 31, 2013		Fair Value Measurements at December 31, 2013 Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Profit sharing liability	$	162,295	$	-	$	-	$	162,295
Total	$	162,295	$	-	$	-	$	162,295

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 six months ended June 30, 2014 and for the year ended December 31, 2013:

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Beginning balance	$	162,295	$	328,828
Change in fair value of profit sharing liability:
Change in estimate of future operating profits		-		(174,821)
Change in discount rate		-		-
Change in the number of future periods over which the present value of future cash flows is estimated		5,778		16,872
Difference between the previously estimated operating results for the current period and actual results		(2,809)		(16,620)
Change in derivative liabilities - warrants		-		1
Exchange rate effect		(1,197)		8,035
Ending balance	$	164,067	$	162,295

Except for the derivative liabilities related to the profit sharing liability and to the warrants issued by the Company, which expired on May 13, 2013, the Company did not identify any other assets or liabilities that are required to be presented on the balance sheet at fair value.

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 requests 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 expense for early submission requests for payment for the three months ended June 30, 2014 and 2013 amounted to $12.8 million and $6.5 million, respectively, and amounted to $26.9 million and $17.3 million, respectively, for the six months ended June 30, 2014 and 2013.

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	10-20 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 betterments 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 their 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]

(k) 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 June 30, 2014, 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 has a twenty-year term.

Long Steel Group contributed land use rights for a total amount of $24.1 million (RMB 148.3 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 in
	(in thousands)
General Steel (China)	$	3,856		2050 & 2053
Longmen Joint Venture	$	24,097		2048 & 2052
Maoming Hengda	$	2,697		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 rights 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]

(l) 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 June 30, 2014 and December 31, 2013.

Unconsolidated entities	Year acquired		June 30, 2014 Net investment (In thousands)		Owned %		December 31, 2013 Net investment (In thousands)		Owned %
Xi’an Delong Powder Engineering Materials Co., Ltd.		2007	$	1,098		24.1	$	1,215		24.1

The table below summarizes General Steel (China)’s investment holding (see Note 2(a) - Basis of presentation) as of June 30, 2014 and December 31, 2013.

Unconsolidated entities	Year acquired	June 30, 2014 Net investment (In thousands)		Owned %	December 31, 2013 Net investment (In thousands)		Owned %
Tianwu General Steel Material Trading Co., Ltd.	2010	$	15,612	32.0	$	15,728	32.0

Total investment income (loss) in unconsolidated subsidiaries amounted to $0.05 million and $0.13 million for the three months ended June 30, 2014 and 2013, respectively, and $0.06 million and $0.09 million for the six months ended June 30, 2014 and 2013, respectively, which was included in “Income from equity investments” in the condensed consolidated statements of operations and comprehensive (loss) income.

Revenue Recognition, Policy [Policy Text Block]

(m) Revenue recognition

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

The Company infrequently engages in trading transactions in which the Company acts as an agent between the suppliers and the customers. The trading arrangements are such that the suppliers are the primary obligors, the Company does not have any general inventory risk, physical inventory loss risk or credit risk, and the Company does not have latitude in establishing price. Sales and cost of goods sold from these trading arrangements are recorded at the net amount retained in accordance with ASC 605-45.

New Accounting Pronouncements, Policy [Policy Text Block]

(n) Recently issued accounting pronouncements

In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. The new guidance also requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. The amendments in the ASU are effective in the first quarter of 2015 for public organizations with calendar year ends. Early adoption is permitted. The Company does not expect the adoption of this guidance will have a significant impact on the Company’s financial position and results of operations.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606. This Update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards. The guidance in this Update supersedes the revenue recognition requirements in Topic 605, Revenue Recognition and most industry-specific guidance. The core principle of the guidance is that an entity should recognize revenue to illustrate the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance also includes a cohesive set of disclosure requirements that will provide users of financial statements with comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from a reporting organization’s contracts with customers. This ASU is effective retrospectively for fiscal years, and interim periods within those years beginning after December 15, 2016 for public companies and 2017 for non-public entities. Management is evaluating the effect, if any, on the Company’s financial position and results of operations.

Reclassification, Policy [Policy Text Block]

(o) Reclassifications

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

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Subsequent events

6 Months Ended

Jun. 30, 2014

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Note 23 – Subsequent events

On July 14, 2014, the Company entered into a Subscription Agreement (the "Subscription Agreement") with Zuosheng Yu, the Company's Chief Executive Officer and a member of the Company's Board of Directors, relating to a private placement of the Company's common stock, par value $0.001 per share. Pursuant to the Subscription Agreement, the Company agreed to sell to Zuosheng Yu 5,000,000 shares of common stock at a purchase price of $1.50 per share (the "Purchase Price"), for an aggregate amount of $7,500,000, subject to closing conditions set forth in the Subscription Agreement. The Purchase Price represents a 23% premium to the volume weighted average closing price of the Common Stock from March 5, 2014 to July 11, 2014, which ranged from $0.90 to $1.47 per share of common stock during the period. Upon completion of this transaction, Zuosheng Yu would own 21.7% of the Company’s common stock.

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Related party transactions and balances (Details 12) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014		Dec. 31, 2013
Related Party Transaction [Line Items]
Deposit due to sales representatives - related parties	$ 1,658		$ 1,997
Gansu Yulong Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Significant influence by Long Steel Group
Deposit due to sales representatives - related parties	1,073		1,408
Shaanxi Yuchang Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Significant influence by Long Steel Group	[1]
Deposit due to sales representatives - related parties	$ 585		$ 589

[1] 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.

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Summary of significant accounting policies (Details Textual) In Millions, unless otherwise specified	3 Months Ended				6 Months Ended				12 Months Ended						6 Months Ended			3 Months Ended	6 Months Ended	3 Months Ended	6 Months Ended	3 Months Ended	6 Months Ended	10 Months Ended	3 Months Ended		6 Months Ended			3 Months Ended	6 Months Ended	3 Months Ended	6 Months Ended																					6 Months Ended									6 Months Ended
	Jun. 30, 2014 USD ($)	Jun. 30, 2014 CNY	Jun. 30, 2013 USD ($)	Jun. 30, 2013 CNY	Jun. 30, 2014 USD ($)	Jun. 30, 2014 CNY	Jun. 30, 2013 USD ($)	Jun. 30, 2013 CNY	Dec. 31, 2013 USD ($)	Dec. 31, 2013 CNY	Nov. 19, 2013 USD ($)	Nov. 19, 2013 CNY	Jun. 30, 2014 Criteria One [Member] USD ($)	Jun. 30, 2014 Criteria Two [Member] USD ($)	Jun. 30, 2014 Maximum [Member]	Jun. 30, 2014 Minimum [Member]	Jun. 30, 2014 Mining Rights [Member] USD ($)	Jun. 30, 2013 Five Customers [Member]	Jun. 30, 2013 Five Customers [Member]	Jun. 30, 2014 Five Customers [Member] Sales [Member]	Jun. 30, 2014 Five Customers [Member] Sales [Member]	Jun. 30, 2014 One Customer [Member]	Jun. 30, 2014 One Customer [Member]	Mar. 30, 2011 One Customer [Member]	Jun. 30, 2014 Five Suppliers [Member]	Jun. 30, 2013 Five Suppliers [Member]	Jun. 30, 2014 Five Suppliers [Member]	Jun. 30, 2013 Five Suppliers [Member]	Dec. 31, 2013 Five Suppliers [Member]	Jun. 30, 2013 Two Suppliers [Member]	Jun. 30, 2013 Two Suppliers [Member]	Jun. 30, 2014 One Suppliers [Member]	Jun. 30, 2014 One Suppliers [Member]	Jun. 30, 2013 One Suppliers [Member]	Jun. 30, 2014 Vendor Financing [Member] USD ($)	Jun. 30, 2014 Company E [Member] USD ($)	Jun. 30, 2014 Company A [Member] USD ($)	Jul. 30, 2014 Company A [Member] Vendor Financing [Member] USD ($)	Jun. 30, 2014 Company A [Member] Vendor Financing [Member] USD ($)	Jun. 30, 2014 Company B [Member] USD ($)	Jun. 30, 2014 Company B [Member] Vendor Financing [Member] USD ($)	Jan. 22, 2014 Company B [Member] Vendor Financing [Member] USD ($)	Jun. 30, 2014 Company D [Member] USD ($)	Jun. 30, 2014 Company F [Member] USD ($)	Jun. 30, 2014 Company G [Member] USD ($)	Jun. 30, 2014 Company H [Member] USD ($)	Jun. 30, 2014 Company C [Member] USD ($)	Jun. 30, 2014 Company C [Member] Vendor Financing [Member] USD ($)	Mar. 31, 2015 Company C [Member] Vendor Financing [Member] Subsequent Event [Member] USD ($)	Jun. 30, 2014 Shaanxi Coal and Chemical Industry Group Co Ltd [Member] USD ($)	Dec. 31, 2013 Shaanxi Coal and Chemical Industry Group Co Ltd [Member] USD ($)	Nov. 19, 2013 Tianjin Dazhan Industry Co Ltd [Member] USD ($)	Nov. 19, 2013 Tianjin Dazhan Industry Co Ltd [Member] CNY	Jun. 30, 2014 Longmen Joint Venture [Member] USD ($)	Jun. 30, 2014 Longmen Joint Venture [Member] CNY	Oct. 01, 2013 Longmen Joint Venture [Member] USD ($)	Apr. 29, 2011 Longmen Joint Venture [Member]	Jun. 30, 2014 Yuxin Trading Co Ltd [Member]	Jun. 30, 2014 Hualong [Member]	Jun. 30, 2014 Hualong [Member] Shareholder One [Member]	Jun. 30, 2014 Hualong [Member] Shareholder Two [Member]	Jun. 30, 2014 Huatianyulong [Member]	Jun. 30, 2014 General Steel Investment Co Ltd [Member] USD ($)	Jun. 30, 2014 General Steel Investment Co Ltd [Member] CNY	Jun. 30, 2014 Maoming Hengda Steel Company Ltd [Member] CNY	Jun. 30, 2014 Yangpu Shengtong Investment Co Ltd [Member]	Jun. 30, 2014 Tianjin Qiu Steel Investment Co Ltd [Member]	Jun. 30, 2014 Tianwu General Steel Material Trading Co Ltd [Member]	Dec. 31, 2013 Tianwu General Steel Material Trading Co Ltd [Member]	Nov. 19, 2013 Tianwu General Steel Material Trading Co Ltd [Member] USD ($)	Jun. 30, 2014 Shaanxi Iron and Steel Group [Member] USD ($)	Jun. 30, 2014 Shaanxi Iron and Steel Group [Member] CNY	Dec. 31, 2013 Shaanxi Iron and Steel Group [Member] CNY
Summary Of Significant Accounting Policies [Line Items]
Equity Method Investment, Ownership Percentage																																																						60.00%			60.00%	100.00%	36.00%	34.67%	29.33%	50.00%	100.00%	100.00%	99.00%	99.10%	98.70%	32.00%	32.00%
Working Capital	$ 1.3				$ 1.3
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners																																																						40.00%
Debt To Equity Ratio	5.4	5.4			5.4	5.4			6.5	6.5
Due to Related Parties																																				21.5	68.2			65.4			16.3	19.0	9.9	1.0	1.9
Vendor Financing, Variable Interest Rate																																																						0.05%
Line Of Credit Amount Utilized	50.4				50.4
Cash and Cash Equivalents Including Restricted Cash	492.9				492.9				431.3
Deposits Assets																																																		0.6	2.0
Entity Wide Purchases Major Supplier Percentage			10.00%	10.00%														27.80%	23.30%			10.00%	10.00%	10.00%	47.40%	45.00%	43.80%	38.40%		15.60%	10.70%	10.00%	12.70%	11.60%
Entity Wide Accounts Payable Major Supplier Percentage																									38.30%		38.30%		29.10%
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net Of Tax, Portion Attributable To Parent					3.0				0.7
Foreign Currency Exchange Translation Rate Balance Sheet Items		6.15				6.15
Foreign Currency Exchange Average Translation Rate		6.16		6.20		6.14		6.24		6.11
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%
Fair Value Inputs, Discount Rate					7.30%	7.30%
Line of Credit Facility, Maximum Borrowing Capacity																																																								487.5
Restricted Notes Receivable Interest Income	12.8		6.5		26.9		17.3
Concentration Risk, Percentage																				31.80%	24.40%
Finite lived Intangible Asset Acquired		15.0				15.0											2.4																																					24.1	148.3								3.9	23.7	16.6
Profit Sharing Liability													5.7	2.8
Gain Loss On Change In Fair Value Of Profit Sharing Liability																																																						2.9
Fair Value Measurement With Unobservable Inputs Reconciliation Initial Measurement And Recognition Of Profit Sharing Liability					164.1
Business Combination Equity Interest Description					Prior to November 19, 2013, the Company held a 60.0% equity interest in Tianwu General Steel Material Trading Co., Ltd. (Tianwu). 32% interest was held by General Steel (China) and 28% interest was held by Yangpu Shengtong.	Prior to November 19, 2013, the Company held a 60.0% equity interest in Tianwu General Steel Material Trading Co., Ltd. (Tianwu). 32% interest was held by General Steel (China) and 28% interest was held by Yangpu Shengtong.
Proceeds From Sale Of Equity Interest											13.6	84.3																																								13.6	84.3
Percentage Of Equity Interest Retained											32.00%	32.00%																																								32.00%	32.00%
Value Added Tax Rate															17.00%	13.00%
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life					50 years	50 years																																																50 years									50 years	50 years	50 years
Unified Management Agreement, Cost Of Asset																																																																							2.3	14.6	14.6
Long-term Line of Credit	147.9				147.9																														893.8			243.8	243.8		162.5	162.5						487.5	487.5
Cash Surrender Value of Life Insurance	0.1				0.1
Disposal Group, Deferred Gain on Disposal																																																																						1.0
Income (Loss) from Equity Method Investments, Net of Dividends or Distributions	$ 0.05		$ 0.13		$ 0.06		$ 0.09

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Summary of significant accounting policies (Details 1) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Summary Of Significant Accounting Policies [Line Items]
Current assets	$ 1,170,395	$ 1,380,724
Plant and equipment, net	1,253,351	1,271,907
TOTAL ASSETS	2,556,474	2,700,358
Total liabilities	(3,132,371)	(3,194,355)
Variable Interest Entities and Subsidiary [Member]
Summary Of Significant Accounting Policies [Line Items]
Current assets	990,397	1,282,054
Plant and equipment, net	1,245,144	1,262,144
Other noncurrent assets	114,372	29,014
TOTAL ASSETS	2,349,913	2,573,212
Total liabilities	(2,891,359)	(3,040,879)
Net liabilities	$ (541,446)	$ (467,667)

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Summary of significant accounting policies (Tables)

6 Months Ended

Jun. 30, 2014

Schedule of Subsidiary of Limited Liability Company or Limited Partnership, Description [Table Text Block]

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

Subsidiary		Percentage 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. (“Yangpu Shengtong”)	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	%

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:

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Current assets	$	990,397	$	1,282,054
Plant and equipment, net		1,245,144		1,262,144
Other noncurrent assets		114,372		29,014
Total assets		2,349,913		2,573,212
Total liabilities		(2,891,359)		(3,040,879)
Net liabilities	$	(541,446)	$	(467,667)

Schedule Of Liabilities Of Variable Interest Entities and Subsidiaries [Table Text Block]

VIE and its subsidiaries’ liabilities consist of the following:

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Current liabilities:
Short term notes payable	$	864,104	$	988,364
Accounts payable		409,550		393,816
Accounts payable - related parties		261,437		235,116
Short term loans - bank		149,348		267,688
Short term loans - others		58,218		55,844
Short term loans - related parties		152,550		125,236
Current maturities of long-term loans – related party		62,374		56,614
Other payables and accrued liabilities		39,685		37,028
Other payables - related parties		93,742		88,914
Customer deposits		66,595		87,661
Customer deposits - related parties		45,589		18,359
Deposit due to sales representatives		21,435		24,343
Deposit due to sales representatives – related parties		1,658		1,997
Taxes payable		2,930		3,357
Deferred lease income		2,171		2,187
Capital lease obligations, current		6,443		4,321
Intercompany payable to be eliminated		21,263		21,420
Total current liabilities		2,259,092		2,412,265
Non-current liabilities:
Long term loans - related parties		9,750		16,043
Deferred lease income - noncurrent		73,620		75,257
Capital lease obligations, noncurrent		384,830		375,019
Profit sharing liability at fair value		164,067		162,295
Total non-current liabilities		632,267		628,614
Total liabilities of consolidated VIE	$	2,891,359	$	3,040,879

Schedule Of Statement Of Operations Of Variable Interest Entities and Subsidiaries [Table Text Block]

	Three months ended June 30, 2014		Three months ended June 30, 2013
	(in thousands)		(in thousands)
Sales	$	587,314	$	650,741
Gross profit (loss)	$	28,229	$	(36,193)
Income (loss) from operations	$	8,128	$	(44,684)
Net loss attributable to controlling interest	$	(8,077)	$	(34,944)

	Six months ended June 30, 2014		Six months ended June 30, 2013
	(in thousands)		(in thousands)
Sales	$	1,181,328	$	1,297,489
Gross profit (loss)	$	6,010	$	(31,826)
Loss from operations	$	(31,166)	$	(9,747)
Net loss attributable to controlling interest	$	(46,111)	$	(26,619)

Schedule of Line of Credit Facilities [Table Text Block]

The Company has lines of credit from the listed major banks totaling $147.9 million with expiration dates ranging from June 16, 2015 to November 28, 2015.

Banks	Amount of Line of Credit (in millions)		Repayment Date
China Minsheng Bank		97.5	November 28, 2015
China CITIC Bank		32.5	June 16, 2015
Bank of Communication		17.9	July 17, 2015
Total	$	147.9

Management expects the above lines of credit will be extended after the repayment dates

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 June 30, 2014:

(in thousands)	Carrying Value as of June 30, 2014		Fair Value Measurements at June 30, 2014 Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Profit sharing liability	$	164,067	$	-	$	-	$	164,067
Total	$	164,067	$	-	$	-	$	164,067

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, 2013:

(in thousands)	Carrying Value as of December 31, 2013		Fair Value Measurements at December 31, 2013 Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Profit sharing liability	$	162,295	$	-	$	-	$	162,295
Total	$	162,295	$	-	$	-	$	162,295

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 six months ended June 30, 2014 and for the year ended December 31, 2013:

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Beginning balance	$	162,295	$	328,828
Change in fair value of profit sharing liability:
Change in estimate of future operating profits		-		(174,821)
Change in discount rate		-		-
Change in the number of future periods over which the present value of future cash flows is estimated		5,778		16,872
Difference between the previously estimated operating results for the current period and actual results		(2,809)		(16,620)
Change in derivative liabilities - warrants		-		1
Exchange rate effect		(1,197)		8,035
Ending balance	$	164,067	$	162,295

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	10-20 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 in
	(in thousands)
General Steel (China)	$	3,856		2050 & 2053
Longmen Joint Venture	$	24,097		2048 & 2052
Maoming Hengda	$	2,697		2054

Schedule Of Investments By Affiliates [Table Text Block]

The table below summarizes Longmen Joint Venture’s investment holdings as of June 30, 2014 and December 31, 2013.

Unconsolidated entities	Year acquired		June 30, 2014 Net investment (In thousands)		Owned %		December 31, 2013 Net investment (In thousands)		Owned %
Xi’an Delong Powder Engineering Materials Co., Ltd.		2007	$	1,098		24.1	$	1,215		24.1

The table below summarizes General Steel (China)’s investment holding (see Note 2(a) - Basis of presentation) as of June 30, 2014 and December 31, 2013.

Unconsolidated entities	Year acquired	June 30, 2014 Net investment (In thousands)		Owned %	December 31, 2013 Net investment (In thousands)		Owned %
Tianwu General Steel Material Trading Co., Ltd.	2010	$	15,612	32.0	$	15,728	32.0

Longmen Joint Venture [Member]

Schedule Of Estimated Cash Flow [Table Text Block]

The detailed breakdown of Longmen Joint Venture’s estimated cash flows are listed below.

	Cash inflow (outflow) (in millions)
	For the twelve months ending June 30, 2015
Current liabilities over current assets (excluding deferred lease income) as of June 30, 2014 (unaudited)	$	(1,327.5)
Projected cash financing and outflows:
Cash provided by lines of credit from banks		147.9
Cash provided by vendor financing		893.8
Cash provided by other financing		362.4
Cash provided by sales representatives		23.1
Cash projected to be used in operations in the twelve months ending June 30, 2015		(28.8)
Cash projected to be used for financing costs in the twelve months ending June 30, 2015		(63.7)
Net projected change in cash for the twelve months ending June 30, 2015	$	7.2

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 $811.5 million with the following companies:

Company	Financing Period	Financing Amount (in millions)
Company A – related party	July 30, 2014 – July 30, 2019	$	243.8
Company B – third party	January 22, 2014 – January 22, 2017		162.5
Company C – third party	October 1, 2013 – March 31, 2016		487.5
Total		$	893.8

Other Financing [Member]

Schedule Of Estimated Cash Flow [Table Text Block]

On February 20, 2014, March 5, 2014, April 22, 2014 and April 23, 2014 Longmen Joint Venture signed payment extension agreements with each company listed below. In total, Longmen Joint Venture can obtain $362.0 million in financial support from two-year and three-year balancing payment extensions granted by the following five companies:

Company	Financing Period	Financing Amount (in millions)
Company D – related party	April 22, 2014 – April 22, 2017	$	81.3
Company E – related party	April 23, 2014 – April 23, 2017		86.0
Company F – related party	April 22, 2014 – April 22, 2017		81.3
Company G – related party	March 5, 2014 – March 5, 2016		56.9
Company H – related party	March 5, 2014 – March 5, 2016		56.9
Total		$	362.4

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Loans receivable - related parties (Tables)

6 Months Ended

Jun. 30, 2014

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:

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Loan to Teamlink Investment Co., Ltd; due in June, July and December 2014; interest rate is 4.75%	$	4,540	$	4,540
Total loans receivable – related parties	$	4,540	$	4,540

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Loans receivable - related parties

6 Months Ended

Jun. 30, 2014

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:

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Loan to Teamlink Investment Co., Ltd; due in June, July and December 2014; interest rate is 4.75%	$	4,540	$	4,540
Total loans receivable – related parties	$	4,540	$	4,540

See Note 18 “Related party transactions and balances” for the nature of the relationship of related parties.

Total interest income for the loans amounted to $0.05 million and $0.07 million for the three months ended June 30, 2014 and 2013, respectively.

Total interest income for the loans amounted to $0.1 million and $0.1 million for the six months ended June 30, 2014 and 2013, respectively.

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

6 Months Ended

Jun. 30, 2014

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:  

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Accounts receivable	$	6,078	$	5,131
Less: allowance for doubtful accounts		(801)		(1,053)
Accounts receivable – related parties		5,788		2,942
Net accounts receivable	$	11,065	$	7,020

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

Changes in the allowance for doubtful accounts are as follows:

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Beginning balance	$	1,053	$	1,367
Charge to expense		-		96
Less: recovery		(244)		(449)
Exchange rate effect		(8)		39
Ending balance	$	801	$	1,053

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Capital lease obligations (Details Textual) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended				12 Months Ended
	Jun. 30, 2014 USD ($)	Jun. 30, 2013 USD ($)	Jun. 30, 2014 USD ($)	Jun. 30, 2013 USD ($)	Jun. 30, 2014 Shaanxi Iron and Steel Group [Member] USD ($)	Jun. 30, 2014 Shaanxi Iron and Steel Group [Member] CNY	Dec. 31, 2011 Shaanxi Iron and Steel Group [Member]	Dec. 31, 2013 Shaanxi Iron and Steel Group [Member] CNY
Schedule Of Capital Leased Obligation [Line Items]
Capital Lease Agreement Term							20 years
Classification Of Lease, Percentage Base							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		14.6
Interest Expense On Minimum Lease Payments	$ 5.7	$ 5.1	$ 10.8	$ 10.2

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Commitment and contingencies (Tables)

6 Months Ended

Jun. 30, 2014

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 June 30, 2014 is as follows:

Year ending June 30,	Minimum lease payment
	(in thousands)
2015	$	1,055
2016		566
2017		566
2018		566
2019		566
Years after		19,849
Total minimum payments required	$	23,168

Schedule of Guarantor Obligations [Table Text Block]

As of June 30, 2014, Longmen Joint Venture provided guarantees to related parties’ and third parties’ bank loans, including lines of credit and others, amounting to $265.4 million.

Nature of guarantee	Guarantee amount		Guaranty Due Date
	(In thousands)
Line of credit	$	153,563	Various from July 2014 to August 2015
Three-party financing agreements		19,500	Various from July 2014 to May 2015
Confirming storage		52,975	Various from August 2014 to April 2015
Financing by the rights of goods delivery in future		39,406	Various from July to October 2014
Total	$	265,444

Schedule Of Parties Being Guaranteed [Table Text Block]

Name of parties being guaranteed	Guarantee amount		Guaranty Due Date
	(In thousands)
Long Steel Group	$	82,875	Various from September 2014 to August 2015
Hancheng Haiyan Coking Co., Ltd		39,975	Various from August 2014 to April 2015
Chengdu Zhongyi Steel Co., Ltd		8,125	March 2015
Shaanxi Tianyi Metal Materials Co., Ltd		6,500	December 2014
Xi’an Laisheng Logistics Co., Ltd		11,781	Various from August 2014 to May 2015
Xi'an Kaiyuan Steel Sales Co., Ltd		6,500	January 2015
Shaanxi Longan Industry Co., Ltd.		8,125	December 2014
Hancheng Sanli Furnace Burden Co., Ltd.		16,250	March 2015
Tianjin Dazhan Industry Co., Ltd		38,188	Various from June 2014 to March 2015
Tianjin Hengying Trading Co., Ltd		40,625	Various from July 2014 to January 2015
Jinmen Desheng Metallurgy Co., Ltd		6,500	September 2014
Total	$	265,444

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Summary of significant accounting policies (Details 10)	6 Months Ended
	Jun. 30, 2014
Buildings and improvements [Member] | Maximum [Member]
Summary Of Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	40 years
Buildings and improvements [Member] | Minimum [Member]
Summary Of Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	10 years
Machinery [Member] | Maximum [Member]
Summary Of Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	30 years
Machinery [Member] | Minimum [Member]
Summary Of Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	10 years
Machinery and equipment under capital lease [Member] | Maximum [Member]
Summary Of Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	20 years
Machinery and equipment under capital lease [Member] | Minimum [Member]
Summary Of Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	10 years
Other equipment [Member]
Summary Of Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	5 years
Transportation equipment [Member]
Summary Of Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	5 years

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Debt (Details 1) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Debt Instrument [Line Items]
Short term loans - bank	$ 201,673	$ 301,917
General Steel China Loans From Various Banks In China [Member]
Debt Instrument [Line Items]
Short term loans - bank	52,325	34,229
Longmen Joint Venture Loans from various banks in China [Member]
Debt Instrument [Line Items]
Short term loans - bank	$ 149,348	$ 267,688

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
ASSETS
Cash	$ 44,749	$ 31,967
Restricted cash	448,106	399,333
Notes receivable	36,948	60,054
Restricted notes receivable	106,873	395,589
Loans receivable - related parties	4,540	4,540
Accounts receivable, net	5,277	4,078
Accounts receivable - related parties	5,788	2,942
Other receivables, net	54,804	54,716
Other receivables - related parties	57,983	54,106
Inventories	208,971	212,921
Advances on inventory purchase	58,503	44,897
Advances on inventory purchase - related parties	119,279	83,003
Prepaid expense and other	3,322	1,388
Prepaid taxes	12,489	28,407
Short-term investment	2,763	2,783
TOTAL CURRENT ASSETS	1,170,395	1,380,724
PLANT AND EQUIPMENT, net	1,253,351	1,271,907
OTHER ASSETS:
Advances on equipment purchase	92,133	6,409
Investment in unconsolidated entities	16,710	16,943
Long-term deferred expense	552	668
Intangible assets, net of accumulated amortization	23,333	23,707
TOTAL OTHER ASSETS	132,728	47,727
TOTAL ASSETS	2,556,474	2,700,358
LIABILITIES AND DEFICIENCY
Short term notes payable	875,479	1,017,830
Accounts payable	418,468	434,979
Accounts payable - related parties	262,103	235,692
Short term loans - bank	201,673	301,917
Short term loans - others	64,395	62,067
Short term loans - related parties	153,996	126,693
Current maturities of long-term loans - related party	62,374	53,013
Other payables and accrued liabilities	48,343	45,653
Other payable - related parties	98,209	94,079
Customer deposits	136,288	87,860
Customer deposits - related parties	142,888	64,881
Deposit due to sales representatives	21,435	24,343
Deposit due to sales representatives - related parties	1,658	1,997
Taxes payable	4,181	4,628
Deferred lease income, current	2,171	2,187
Capital lease obligations, current	6,443	4,321
TOTAL CURRENT LIABILITIES	2,500,104	2,562,140
NON-CURRENT LIABILITIES:
Long-term loans - related party	9,750	19,644
Deferred lease income, noncurrent	73,620	75,257
Capital lease obligations, noncurrent	384,830	375,019
Profit sharing liability at fair value	164,067	162,295
TOTAL NON-CURRENT LIABILITIES	632,267	632,215
TOTAL LIABILITIES	3,132,371	3,194,355
COMMITMENTS AND CONTINGENCIES
DEFICIENCY:
Preferred stock, $0.001 par value, 50,000,000 shares authorized, 3,092,899 shares issued and outstanding as of June 30, 2014 and December 31, 2013	3	3
Common stock, $0.001 par value, 200,000,000 shares authorized, 58,314,688 and 58,234,688 shares issued, 55,842,382 and 55,762,382 shares outstanding as of June 30, 2014 and December 31, 2013, respectively	58	58
Treasury stock, at cost, 2,472,306 shares as of June 30, 2014 and December 31, 2013	(4,199)	(4,199)
Paid-in-capital	107,097	106,878
Statutory reserves	6,408	6,243
Accumulated deficits	(469,381)	(414,798)
Accumulated other comprehensive income	3,016	729
TOTAL GENERAL STEEL HOLDINGS, INC. DEFICIENCY	(356,998)	(305,086)
NONCONTROLLING INTERESTS	(218,899)	(188,911)
TOTAL DEFICIENCY	(575,897)	(493,997)
TOTAL LIABILITIES AND DEFICIENCY	$ 2,556,474	$ 2,700,358

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Summary of significant accounting policies (Details 2) (USD $) In Thousands, unless otherwise specified	Jul. 30, 2014	Jun. 30, 2014	Dec. 31, 2013
Current liabilities:
Short term notes payable		$ 875,479	$ 1,017,830
Accounts payable		418,468	434,979
Accounts payable - related parties		262,103	235,692
Short term loans - bank		201,673	301,917
Short term loans - others		64,395	62,067
Short term loans - related parties		153,996	126,693
Current maturities of long-term loans - related party		62,374	53,013
Other payables and accrued liabilities		48,343	45,653
Other payables - related parties		98,209	94,079
Customer deposits		136,288	87,860
Customer deposits - related parties		142,888	64,881
Deposit due to sales representatives		21,435	24,343
Taxes payable		4,181	4,628
Deferred lease income	2,200	2,171	2,187
Capital lease obligations, current		6,443	4,321
Total current liabilities		2,500,104	2,562,140
Non-current liabilities:
Long term loans - related parties		9,750	19,644
Deferred lease income - noncurrent		73,620	75,257
Capital lease obligations, noncurrent		384,830	375,019
Profit sharing liability at fair value		164,067	162,295
Total non-current liabilities		632,267	632,215
Total liabilities of consolidated VIE		3,132,371	3,194,355
Variable Interest Entities and Subsidiary [Member]
Current liabilities:
Short term notes payable		864,104	988,364
Accounts payable		409,550	393,816
Accounts payable - related parties		261,437	235,116
Short term loans - bank		149,348	267,688
Short term loans - others		58,218	55,844
Short term loans - related parties		152,550	125,236
Current maturities of long-term loans - related party		62,374	56,614
Other payables and accrued liabilities		39,685	37,028
Other payables - related parties		93,742	88,914
Customer deposits		66,595	87,661
Customer deposits - related parties		45,589	18,359
Deposit due to sales representatives		21,435	24,343
Deposit due to sales representatives - related parties		1,658	1,997
Taxes payable		2,930	3,357
Deferred lease income		2,171	2,187
Capital lease obligations, current		6,443	4,321
Intercompany payable to be eliminated		21,263	21,420
Total current liabilities		2,259,092	2,412,265
Non-current liabilities:
Long term loans - related parties		9,750	16,043
Deferred lease income - noncurrent		73,620	75,257
Capital lease obligations, noncurrent		384,830	375,019
Profit sharing liability at fair value		164,067	162,295
Total non-current liabilities		632,267	628,614
Total liabilities of consolidated VIE		$ 2,891,359	$ 3,040,879

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Related party transactions and balances (Details 8) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2014	Dec. 31, 2013
Related Party Transaction [Line Items]
Short term loans - related parties	$ 153,996	$ 153,996	$ 126,693
Shaanxi Steel [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Majority shareholder of Long Steel Group
Short term loans - related parties	81,250	81,250	49,110
Shaanxi Coal and Chemical Industry Group Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Shareholder of Shaanxi Steel
Short term loans - related parties	71,287	71,287	28,216
Long Steel Group [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture	Noncontrolling shareholder of Longmen Joint Venture
Short term loans - related parties	0	0	33,183
Tianjin Hengying Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Short term loans - related parties	0	0	8,178
Tianjin Dazhan Industry Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Short term loans - related parties	13	13	6,548
Yangpu Capital Automobile [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Short term loans - related parties	$ 1,446	$ 1,446	$ 1,458

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Organization and Operations

6 Months Ended

Jun. 30, 2014

Organization And Operations [Abstract]

Organization And Operations [Text Block]

Note 1 – Organization and Operations

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 $605.8 million (or approximately RMB 3.7 billion) of the constructed iron and steel making facilities owned by Shaanxi Steel, which includes one 400 m² sintering machine, two 1,280 m³ 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 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, the facilities 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 or loss generated by Longmen Joint Venture decreased from 60% to 36%. However, the overall capacity under the management of Longmen Joint Venture increased by three million tons, or 75%. The Agreement improved 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. There has been no adjustment to the Agreement from its inception to the present time nor intention to make future adjustment by the Company and Shaanxi Steel.

The parties to the Agreement established the Shaanxi Longmen Iron and Steel Unified Management Supervisory Committee ("Supervisory Committee") to ensure that the facilities and related resources are operated and managed according to the stipulations set forth in the Agreement. The Board of Directors of Longmen Joint Venture, of which the Company holds 4 out of 7 seats, requires a simple majority vote and 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 meets certain of the criteria of a capital lease and therefore the assets constructed by Shaanxi Steel are accounted for by Longmen Joint Venture as a capital lease. The profit sharing liability portion of the lease obligation, representing 40% of the pre-tax profit generated by the Asset Pool, is accounted for by Longmen Joint Venture as a derivative financial instrument at fair value. 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 6) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2014		Dec. 31, 2013
Related Party Transaction [Line Items]
Advances on inventory purchase - related parties	$ 119,279	$ 119,279		$ 83,003
Long Steel Group [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture	Noncontrolling shareholder of Longmen Joint Venture
Advances on inventory purchase - related parties	0	0		9,123
Shaanxi Shenganda Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Significant influence by Long Steel Group	[1]
Advances on inventory purchase - related parties	13,088	13,088		25,607
Tianjin Dazhan Industry Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Advances on inventory purchase - related parties	1,379	1,379		10,343
Tianjin Hengying Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Advances on inventory purchase - related parties	61,440	61,440		16,158
Tianjin General Qiugang Pipe Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Advances on inventory purchase - related parties	202	202		555
Maoming Shengze Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Advances on inventory purchase - related parties	43,137	43,137		21,197
Others [Member]
Related Party Transaction [Line Items]
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	$ 33	$ 33		$ 20

[1] 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.

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Accounts receivable (including related parties), net (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable	$ 6,078	$ 5,131
Less: allowance for doubtful accounts	(801)	(1,053)	(1,367)
Accounts receivable - related parties	5,788	2,942
Net accounts receivable	$ 11,065	$ 7,020

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Related party transactions and balances (Details 11) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2014		Dec. 31, 2013
Related Party Transaction [Line Items]
Customer deposits - related parties	$ 142,888	$ 142,888		$ 64,881
Shaanxi Yuchang Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Significant influence by Long Steel Group	[1]
Customer deposits - related parties	10	10		10
Shaanxi Coal and Chemical Industry Group Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Shareholder of Shaanxi Steel
Customer deposits - related parties	13,749	13,749		0
Long Steel Group [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture	Noncontrolling shareholder of Longmen Joint Venture
Customer deposits - related parties	8,378	8,378		15,038
Shaanxi Junlong Rolling Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Investee of Long Steel Group	Investee of Long Steel Group
Customer deposits - related parties	16	16		2,748
Shaanxi Shenganda Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Significant influence by Long Steel Group	[1]
Customer deposits - related parties	0	0		275
Tianwu General Steel Material Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Investee of General Steel (China)	Investee of General Steel (China)
Customer deposits - related parties	113,549	113,549		46,521
Others [Member]
Related Party Transaction [Line Items]
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	0	0		289
Shaanxi Haiyan Trade Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Significant influence by Long Steel Group	[1]
Customer deposits - related parties	$ 7,186	$ 7,186		$ 0

[1] 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.

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Intangible assets, net (Tables)

6 Months Ended

Jun. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets [Table Text Block]

Intangible assets consist of the following:

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Land use rights	$	30,650	$	30,884
Mining right		2,441		2,459
Software		1,049		743
Subtotal		34,140		34,086
Less:
Accumulated amortization – land use rights		(8,767)		(8,498)
Accumulated amortization – mining right		(1,363)		(1,320)
Accumulated amortization – software		(677)		(561)
Subtotal		(10,807)		(10,379)
Intangible assets, net	$	23,333	$	23,707

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:

Year ending	Estimated amortization and depletion expenses		Gross carrying amount
	(in thousands)		(in thousands)
June 30, 2015	$	1,024		22,309
June 30, 2016		1,024		21,285
June 30, 2017		1,024		20,261
June 30, 2018		1,024		19,237
June 30, 2019		1,024		18,213
Thereafter		18,213		-
Total	$	23,333

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Plant and equipment, net (Details 1) (USD $) In Thousands, unless otherwise specified			6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014 Factory wall remodel [Member]	Jun. 30, 2014 Equipment updates [Member]	Jun. 30, 2014 Sintering Machine Construction [Member]	Jun. 30, 2014 5 blast furnace construction [Member]	Jun. 30, 2014 Electrical Substation Construction [Member]	Jun. 30, 2014 Reconstruction Of Miscellaneous Factory Buildings [Member]	Jun. 30, 2014 Project materials [Member]	Jun. 30, 2014 Others [Member]
Property, Plant and Equipment [Line Items]
Construction in progress	$ 38,736	$ 11,412	$ 1,022	$ 109	$ 4,830	$ 22,970	$ 13	$ 5,547	$ 2,133	$ 2,112
Construction Completion Date			Jul. 31, 2014	Jul. 31, 2014	Nov. 30, 2014	Dec. 31, 2014	Aug. 31, 2014	Oct. 31, 2014
Estimated additional cost to complete	$ 326,316		$ 77	$ 3,206	$ 140,122	$ 150,155	$ 24,419	$ 4,337	$ 0	$ 0

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Taxes

6 Months Ended

Jun. 30, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 17 – 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 and six months ended June 30, 2014 and 2013 are as follows: 

(In thousands)	Three months ended June 30, 2014		Three months ended June 30, 2013
Current	$	107	$	105
Deferred		-		-
Total provision for income taxes	$	107	$	105

(In thousands)	Six months ended June 30, 2014		Six months ended June 30, 2013
Current	$	112	$	176
Deferred		-		-
Total provision for income taxes	$	112	$	176

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. The special tax treatment has not changed to date as a result of the evaluations by the local tax bureau.

Deferred tax 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 $536.8 million will begin to expire in 2015. 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 is 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 a 100% valuation allowance for the deferred tax assets. The valuation allowance as of June 30, 2014 and December 31, 2013 was $101.0 million and $97.6 million, respectively. Management will review this valuation allowance periodically and make adjustments as warranted. Temporary differences represent tax and book differences for various items, such as receivable allowances, inventory allowances, impairments on fixed assets and deferred lease income.

Movement of valuation allowance:

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Beginning balance	$	97,569	$	72,891
Current period addition		4,194		23,293
Current period reversal		(55)		(1,206)
Exchange difference		(726)		2,591
Ending balance	$	100,982	$	97,569

Deferred tax 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 six months ended June 30, 2014. The net operating loss carry forwards for United States income taxes amounted to $2.4 million, which may be available to reduce future years’ taxable income. These carry forwards will expire, if not utilized, starting from 2026 through 2033. 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 June 30, 2014 was $0.8 million. The net change in the valuation allowance for the six months ended June 30, 2014 was $0.1 million. Management will review this valuation allowance periodically and make adjustments as warranted.

The Company has no cumulative proportionate retained earnings from profitable subsidiaries as of June 30, 2014. 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 June 30, 2014 and December 31, 2013, the Company had $2.8 million and $3.5 million in value added tax credits 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 $178.6 million and $174.5 million, respectively, for the three months ended June 30, 2014 and $164.8 million and $154.4 million, respectively, for the three months ended June 30, 2013. VAT on sales and VAT on purchases amounted to $331.5 million and $326.4 million, respectively, for the six months ended June 30, 2014 and $353.2 million and $338.2 million, respectively, for the six months ended June 30, 2013. 

Taxes payable consisted of the following: 

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
VAT taxes payable	$	2,496	$	2,211
Income taxes payable		185		173
Other taxes		1,500		2,244
Totals	$	4,181	$	4,628

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Debt (Tables)

6 Months Ended

Jun. 30, 2014

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

Long-term loans due to related party

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Longmen Joint Venture: Loans from Shaanxi Steel Group, due on various dates through November 2015 and interest rate is 5.6% per annum.	$	72,124	$	72,657
Less: Current maturities of long-term loans – related party		(62,374)		(53,013)
Long-term loans - related party	$	9,750	$	19,644

Short Term Notes Payable [Member]

Schedule of Short-term Debt [Table Text Block]

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

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
General Steel (China): Notes payable to various banks in China, due various dates from July to December 2014. Restricted cash required of $11.4 million and $16.4 million as of June 30, 2014 and December 31, 2013, respectively; guaranteed by third parties. These notes payable were either repaid or renewed subsequently on the due dates.	$	11,375	$	29,466
Longmen Joint Venture: Notes payable to various banks in China, due various dates from July to December 2014. $418.8 million restricted cash and $51.0 million notes receivable are secured for notes payable as of June 30, 2014, and comparatively $383.0 million restricted cash and $231.7 million notes receivable secured as of December 31, 2013, respectively; some notes are further guaranteed by third parties. These notes payable were either repaid or renewed subsequently on the due dates.		864,104		988,364
Total short-term notes payable	$	875,479	$	1,017,830

Due To Banks [Member]

Schedule of Short-term Debt [Table Text Block]

Due to banks

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
General Steel (China): Loans from various banks in China, due various dates from August 2014 to June 2015. Weighted average interest rate was 7.1% per annum and 7.2% per annum as of June 30, 2014 and December 31, 2013, respectively; some are guaranteed by third parties and related parties. $8.1 million and $0 restricted cash were secured for the loans as of June 30, 2014 and December 31, 2013, respectively; These loans were either repaid or renewed subsequently on the due dates.	$	52,325	$	34,229
Longmen Joint Venture: Loans from various banks in China, due various dates from August 2014 to June 2015. Weighted average interest rate was 6.1% per annum and 6.3% per annum as of June 30, 2014 and December 31, 2013, respectively; some are guaranteed by third parties, accounts receivable, restricted cash or notes receivables. $56.1 million and $163.9 million restricted notes receivable were secured for the loans as of June 30, 2014 and December 31, 2013, respectively; $5.9 million and $0 restricted cash were secured for the loans as of June 30, 2014 and December 31, 2013, respectively; These loans were either repaid or renewed subsequently on the due dates.		149,348		267,688
Total short-term loans - bank	$	201,673	$	301,917

Due To Unrelated Parties [Member]

Schedule of Short-term Debt [Table Text Block]

Due to unrelated parties

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Longmen Joint Venture: Loans from various unrelated companies and individuals, due various dates from July to December 2014, and weighted average interest rate was 5.6% per annum and 5.2% per annum as of June 30, 2014 and December 31, 2013, respectively. These loans were either repaid or renewed subsequently on the due dates.	$	17,099	$	22,720
Longmen Joint Venture: Loans from financing sales.		41,119		33,124
Maoming Hengda: Loans from one unrelated party and one related party, due on demand, none interest bearing.		6,177		6,223
Total short-term loans – others	$	64,395	$	62,067

Due To Related Parties [Member]

Schedule of Short-term Debt [Table Text Block]

Short term loans due to related parties

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
General Steel China: Loans from Yangpu Capital Automobile, due on demand, and interest rate is 10% per annum.	$	1,446	$	1,458
Longmen Joint Venture: Loan from Shaanxi Coal and Chemical Industry Group Co., Ltd., due on demand, and interest rate is 7.0% per annum.		8,822		28,216
Longmen Joint Venture: Loan from Shaanxi Steel Group due on various dates from November 2014 to June 2015, and interest rate is 6.6% per annum.		81,250		49,110
Longmen Joint Venture: Loans from financing sales.		62,478		47,909
Total short-term loans - related parties	$	153,996	$	126,693

XML

Related party transactions and balances (Details 10) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2014	Dec. 31, 2013
Related Party Transaction [Line Items]
Other payables - related parties	$ 98,209	$ 98,209	$ 94,079
Tianjin Hengying Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Other payables - related parties	377	377	380
Long Steel Group [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture	Noncontrolling shareholder of Longmen Joint Venture
Other payables - related parties	44,730	44,730	43,636
Shaanxi Steel [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Majority shareholder of Long Steel Group
Other payables - related parties	48,670	48,670	44,363
Wendlar Investment Management Group Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Common control under CEO
Other payables - related parties	1,053	1,053	895
Yangpu Capital Automobile [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Other payables - related parties	362	362	291
Tianjin Dazhan Industry Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Other payables - related parties	470	470	473
Maoming Shengze Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Other payables - related parties	2,201	2,201	1,745
Victory Energy Resource Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Other payables - related parties	0	0	1,375
Others [Member]
Related Party Transaction [Line Items]
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	$ 346	$ 346	$ 921

XML

Equity

6 Months Ended

Jun. 30, 2014

Equity [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

Note 19 – Equity

2014 Equity Transactions

On February 3, 2014, the Company granted 80,000 shares of common stock for investor relations consulting services under two service agreements dated January 14, 2014. The shares were valued at $1.01 per share, the quoted market price at the time the services were provided.

XML

Intangible assets, net (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	$ 34,140	$ 34,086
Less: Accumulated amortization	(10,807)	(10,379)
Intangible assets, net	23,333	23,707
Land use rights [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	30,650	30,884
Less: Accumulated amortization	(8,767)	(8,498)
Mining right [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	2,441	2,459
Less: Accumulated amortization	(1,363)	(1,320)
Software [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	1,049	743
Less: Accumulated amortization	$ (677)	$ (561)

XML

Commitment and contingencies (Details 2) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
Commitment And Contingencies [Line Items]
Guarantor Obligations, Current Carrying Value	$ 265,444
Xi'an Laisheng Logistics Co., Ltd [Member]
Commitment And Contingencies [Line Items]
Guarantor Obligations, Current Carrying Value	11,781
Guaranty Obligations, Guaranty Due Date	Various from August 2014 to May 2015
Xi'an Kaiyuan Steel Sales Co., Ltd [Member]
Commitment And Contingencies [Line Items]
Guarantor Obligations, Current Carrying Value	6,500
Guaranty Obligations, Guaranty Due Date	January 2015
Hancheng Sanli Furnace Burden Co., Ltd. [Member]
Commitment And Contingencies [Line Items]
Guarantor Obligations, Current Carrying Value	16,250
Guaranty Obligations, Guaranty Due Date	March 2015
Jinmen Desheng Metallurty Co., Ltd [Member]
Commitment And Contingencies [Line Items]
Guarantor Obligations, Current Carrying Value	6,500
Guaranty Obligations, Guaranty Due Date	September 2014
Chengdu Zhongyi Steel Co., Ltd. [Member]
Commitment And Contingencies [Line Items]
Guarantor Obligations, Current Carrying Value	8,125
Guaranty Obligations, Guaranty Due Date	March 2015
Shaanxi Longan Industrial Development Co., Ltd [Member]
Commitment And Contingencies [Line Items]
Guarantor Obligations, Current Carrying Value	8,125
Guaranty Obligations, Guaranty Due Date	December 2014
Long Steel Group [Member]
Commitment And Contingencies [Line Items]
Guarantor Obligations, Current Carrying Value	82,875
Guaranty Obligations, Guaranty Due Date	Various from September 2014 to August 2015
Hancheng Haiyan Coking Co Ltd [Member]
Commitment And Contingencies [Line Items]
Guarantor Obligations, Current Carrying Value	39,975
Guaranty Obligations, Guaranty Due Date	Various from August 2014 to April 2015
Tianjin Dazhan Industry Co Ltd [Member]
Commitment And Contingencies [Line Items]
Guarantor Obligations, Current Carrying Value	38,188
Guaranty Obligations, Guaranty Due Date	Various from June 2014 to March 2015
Tianjin Hengying Trading Co Ltd [Member]
Commitment And Contingencies [Line Items]
Guarantor Obligations, Current Carrying Value	40,625
Guaranty Obligations, Guaranty Due Date	Various from July 2014 to January 2015
Shaanxi Tianyi Metal Materials Co., Ltd [Member]
Commitment And Contingencies [Line Items]
Guarantor Obligations, Current Carrying Value	$ 6,500
Guaranty Obligations, Guaranty Due Date	December 2014

XML

Summary of significant accounting policies

6 Months Ended

Jun. 30, 2014

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 and 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 for a fair presentation of the financial statements have been included. Interim results are not necessarily indicative of results to be expected for the full year. The information included in this Form 10-Q should be read in conjunction with information included in the 2013 annual report on Form 10-K/A filed on August 19, 2014.

(a) Basis of presentation

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

Subsidiary		Percentage 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. (“Yangpu Shengtong”)	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

Prior to November 19, 2013, the Company held a 60.0% equity interest in Tianwu General Steel Material Trading Co., Ltd. (“Tianwu”). 32% interest was held by General Steel (China) and 28% interest was held by Yangpu Shengtong. On November 19, 2013, the Company sold its 28% equity interest of Tianwu held by Yangpu Shengtong to Tianjin Dazhan Industry Co., Ltd., a related party through indirect common ownership, for $13.6 million (RMB 84.3 million) while retaining 32% interest held by General Steel (China). As a result of this transaction, the Company met the criteria under ASC 810-10-40-4 to deconsolidate Tianwu at the disposal date and recognized a gain of $1.0 million in the fourth quarter of 2013 in accordance with ASC 810-10-40-5. At the same time, General Steel (China)’s remaining 32% interest is accounted for as an investment in unconsolidated subsidiaries using the equity method. See Note 2(t) - Investments in unconsolidated entities for details.

(b) Principles of consolidation – subsidiaries

The accompanying 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.

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 of Directors 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. The Supervisory Committee, in which the Company holds 2 out of 4 seats, requires a ¾ majority vote, while the Board of Directors, on 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. 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. If the Unified Management Agreement cannot be enforced, the Company would not consolidate Longmen Joint Venture as a VIE. However, the current PRC legal system has not limited the Company’s ability to enforce the Unified Management Agreement nor does the Company believe it is likely to do so in the future. The Company makes an 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:

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Current assets	$	990,397	$	1,282,054
Plant and equipment, net		1,245,144		1,262,144
Other noncurrent assets		114,372		29,014
Total assets		2,349,913		2,573,212
Total liabilities		(2,891,359)		(3,040,879)
Net liabilities	$	(541,446)	$	(467,667)

VIE and its subsidiaries’ liabilities consist of the following:

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Current liabilities:
Short term notes payable	$	864,104	$	988,364
Accounts payable		409,550		393,816
Accounts payable - related parties		261,437		235,116
Short term loans - bank		149,348		267,688
Short term loans - others		58,218		55,844
Short term loans - related parties		152,550		125,236
Current maturities of long-term loans – related party		62,374		56,614
Other payables and accrued liabilities		39,685		37,028
Other payables - related parties		93,742		88,914
Customer deposits		66,595		87,661
Customer deposits - related parties		45,589		18,359
Deposit due to sales representatives		21,435		24,343
Deposit due to sales representatives – related parties		1,658		1,997
Taxes payable		2,930		3,357
Deferred lease income		2,171		2,187
Capital lease obligations, current		6,443		4,321
Intercompany payable to be eliminated		21,263		21,420
Total current liabilities		2,259,092		2,412,265
Non-current liabilities:
Long term loans - related parties		9,750		16,043
Deferred lease income - noncurrent		73,620		75,257
Capital lease obligations, noncurrent		384,830		375,019
Profit sharing liability at fair value		164,067		162,295
Total non-current liabilities		632,267		628,614
Total liabilities of consolidated VIE	$	2,891,359	$	3,040,879

	Three months ended June 30, 2014		Three months ended June 30, 2013
	(in thousands)		(in thousands)
Sales	$	587,314	$	650,741
Gross profit (loss)	$	28,229	$	(36,193)
Income (loss) from operations	$	8,128	$	(44,684)
Net loss attributable to controlling interest	$	(8,077)	$	(34,944)

	Six months ended June 30, 2014		Six months ended June 30, 2013
	(in thousands)		(in thousands)
Sales	$	1,181,328	$	1,297,489
Gross profit (loss)	$	6,010	$	(31,826)
Loss from operations	$	(31,166)	$	(9,747)
Net loss attributable to controlling interest	$	(46,111)	$	(26,619)

Longmen Joint Venture has two 100% owned subsidiaries, Yuxin Trading Co., Ltd. (“Yuxin”) and Yuteng Trading Co., Ltd. (“Yuteng”). Longmen Joint Venture also 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 invested in by Longmen Joint Venture in June 2007 and July 2008, respectively. 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. The assets, liabilities and the operating results of Hualong are immaterial to the Company’s consolidated financial statements as of June 30, 2014 and December 31, 2013, respectively, and for the three and six months ended June 30, 2014 and 2013, respectively.

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 assets, liabilities and the operating results of Huatianyulong are immaterial to the Company’s consolidated financial statements as of June 30, 2014 and December 31, 2013, respectively, and for the three and six months ended June 30, 2014 and 2013, respectively.

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 majority voting rights in each entity, and thereby, the power of control, to Longmen Joint Venture.

(d) Liquidity

The Company’s accounts have been prepared under the 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 options (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 the 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 June 30, 2014 and December 31, 2013 were (5.4) and (6.5), respectively. As of June 30, 2014, the Company’s current liabilities exceed current assets by $1.3 billion.

Longmen Joint Venture, as the most important entity of the Company, accounted for a majority of the 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, as well as its ability to obtain external financial supports, including but not limited to lines of credit from banks and vendor financing. If Longmen Joint Venture does not maintain a sufficient level of financial support by renewing its financing terms with existing financing sources or obtaining new sources of financial support, there may be an immediate negative impact on the Company’s operations and its ability to continue as a going concern. Longmen Joint Venture has obtained different types of financial support, which are listed below by category:

Lines of credit

The Company has lines of credit from the listed major banks totaling $147.9 million with expiration dates ranging from June 16, 2015 to November 28, 2015.

Banks	Amount of Line of Credit (in millions)		Repayment Date
China Minsheng Bank		97.5	November 28, 2015
China CITIC Bank		32.5	June 16, 2015
Bank of Communication		17.9	July 17, 2015
Total	$	147.9

Management expects the above lines of credit will be extended after the repayment dates.

As of the date of this report, the Company utilized $50.4 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 $811.5 million with the following companies:

Company	Financing Period	Financing Amount (in millions)
Company A – related party	July 30, 2014 – July 30, 2019	$	243.8
Company B – third party	January 22, 2014 – January 22, 2017		162.5
Company C – third party	October 1, 2013 – March 31, 2016		487.5
Total		$	893.8

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 many years. On July 30, 2014, Company A signed a five-year agreement with Longmen Joint Venture to finance its coke purchases up to $243.8 million. Company B signed a three-year agreement with Longmen Joint Venture on January 22, 2014 to finance its coke purchases up to $162.5 million. According to the above signed agreements, both Company A and B will not demand any cash payments during their respective financing periods. As of the date of this report, our payables to Company A and Company B were approximately $68.2 million and $65.4 million, respectively.

Company C is a Fortune 500 Company. On June 28, 2013, Company C signed an agreement with Longmen Joint Venture to finance Longmen Joint Venture’s purchase of iron ore for an amount up to $487.5 million to commence on October 1, 2013 and end on March 31, 2015. On August 1, 2014, Company C signed an extension agreement with the Company and extended the financing terms to March 31, 2016. 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. As of the date of this report, our payable to Company C is approximately $1.9 million.

Other financing

On February 20, 2014, March 5, 2014, April 22, 2014 and April 23, 2014 Longmen Joint Venture signed payment extension agreements with each company listed below. In total, Longmen Joint Venture can obtain $362.0 million in financial support from two-year and three-year balancing payment extensions granted by the following five companies:

Company	Financing Period	Financing Amount (in millions)
Company D – related party	April 22, 2014 – April 22, 2017	$	81.3
Company E – related party	April 23, 2014 – April 23, 2017		86.0
Company F – related party	April 22, 2014 – April 22, 2017		81.3
Company G – related party	March 5, 2014 – March 5, 2016		56.9
Company H – related party	March 5, 2014 – March 5, 2016		56.9
Total		$	362.4

As of the date of this report, our payables to Company D, Company E, Company F, Company G and Company H are approximately $16.3 million, $21.5 million, $19.0 million, $9.9 million and $1.0 million, 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 June 30, 2014, Longmen Joint Venture has collected a total amount of $23.1 million. Historically, this amount is quite stable and we do not expect a big fluctuation in this amount for the next twelve months from June 30, 2014 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 June 30, 2015. The detailed breakdown of Longmen Joint Venture’s estimated cash flows are listed below.

	Cash inflow (outflow) (in millions)
	For the twelve months ending June 30, 2015
Current liabilities over current assets (excluding deferred lease income) as of June 30, 2014 (unaudited)	$	(1,327.5)
Projected cash financing and outflows:
Cash provided by lines of credit from banks		147.9
Cash provided by vendor financing		893.8
Cash provided by other financing		362.4
Cash provided by sales representatives		23.1
Cash projected to be used in operations in the twelve months ending June 30, 2015		(28.8)
Cash projected to be used for financing costs in the twelve months ending June 30, 2015		(63.7)
Net projected change in cash for the twelve months ending June 30, 2015	$	7.2

As a result, the consolidated financial statements as of June 30, 2014 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 consolidated financial statements and footnotes. Significant accounting estimates reflected in the Company’s consolidated financial statements include the fair value of the profit sharing liability, the useful lives of and impairment of property, plant and equipment, potential losses on uncollectible receivables, the allowance for inventory valuation, the interest rate used in the financing sales, the fair value of the assets recorded under capital leases and the present value of the net minimum lease payments of the capital leases. 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 price fluctuation of raw materials and energy prices as part of its normal operations. The Company does not utilize 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 June 30, 2014 and December 31, 2013 amounted to $ 492.9 million and $ 431.3 million, including $ 0.6 million and $ 2.0 million that were deposited in Shaanxi Coal and Chemical Industry Group Financial Co., Ltd., a related party, respectively. As of June 30, 2014, $ 0.1 million cash in the bank was covered by insurance. The Company has not experienced any losses in its bank accounts and deposits its cash in a number of different banks to minimize its exposure to credit risk.

The Company’s five major customers are all distributors and collectively represented 31.8% and 24.4% of the Company’s total sales for the three and six months ended June 30, 2014, respectively. None of the five major customers individually accounted for more than 10% of the total sales for the three months or the six months ended June 30, 2014. The Company’s five major customers represented 27.8% and 23.3% of the Company’s total sales for the three months and six months ended June 30, 2013, respectively. None of the five major customers individually accounted for more than 10% of the total sales for the three months or the six months ended June 30, 2013. None of the five major customers has accounts receivable, including related parties, with the Company as of June 30, 2014 and December 31, 2013, respectively.

For the three and six months ended June 30, 2014, the Company purchased 47.4% and 43.8% 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 months ended June 30, 2014 and one of the five major suppliers individually accounted for 12.7% of the total purchases for the six months ended June 30, 2014. The purchases from the five major suppliers represented 45.0% and 38.4% of the Company’s total purchases for the three months and six months ended June 30, 2013, respectively. Two of the five major suppliers individually accounted for 15.6% and 10.7% of the total purchases for the three months ended June 30, 2013, respectively, and one of the five major suppliers individually accounted for 11.6% of the total purchases for the six months ended June 30, 2013. These five vendors accounted for 38.3% and 29.1% of total accounts payable, including related parties, as of June 30, 2014 and December 31, 2013, respectively. None of the five major suppliers individually accounted for more than 10% of total accounts payable as June 30, 2014 and and December 31, 2013.

(g) Foreign currency translation and other comprehensive income

The reporting currency of the Company is the U.S. dollar. The Company’s subsidiaries and VIE 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 statements of operations 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 $3.0 million and $0.7 million as of June 30, 2014 and December 31, 2013, respectively. The balance sheet amounts, with the exception of equity, at June 30, 2014 and December 31, 2013 were translated at 6.15 RMB and 6.11 RMB to $1.00, respectively. The equity accounts were stated at their historical rate. The average translation rates applied to the statements of operations for the three months ended June 30, 2014 and 2013 were 6.16 RMB and 6.20 RMB, respectively. The average translation rates applied to the statements of operations for the six months ended June 30, 2014 and 2013 were 6.14 RMB and 6.24 RMB, respectively. Cash flows are also translated at average translation rates for the periods; as a result,, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances in 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 standard 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 investments, 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 carrying value of the long term loans-related party approximates its fair value as of the reporting date as their stated interest rates approximate current rates available.

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.

The Company analyzes all financial instruments with features of both liabilities and equity, pursuant to which warrants previously issued by the Company were required to be recorded as a liability at fair value and marked to market each reporting period. The warrants were accounted for as derivative liabilities and recorded at their fair value, with the change in fair value charged or credited to income each period.  The warrants expired unexercised on May 13, 2013. Prior to their expiration, the fair value of the warrants was estimated using a binomial lattice model, using level 3 inputs.

As described in Note 15 - Capital lease obligations, payments related to the capital lease of the Asset Pool consist of two components: (1) a fixed monthly payment of $2.3 million (RMB 14.6 million), based on Shaanxi Steel’s cost to construct the assets, to be paid for the 20 year term of the Unified Management Agreement; and (2) 40% of any remaining pre-tax profits from the Asset Pool, which includes Longmen Joint Venture and the constructed iron and steel making facilities. The aforementioned profit sharing component meets the definition of a derivative instrument under ASC 815-10-15-83 and, accordingly, the profit sharing liability is accounted for separately as a derivative liability. It was recognized initially at its estimated fair value at inception. The estimated fair value is adjusted each reporting period, with changes in the estimated fair value of the profit sharing liability charged or credited to operating income each period.

The Company determines the fair value of the profit sharing liability using Level 3 inputs by considering the present value of Longmen Joint Venture’s projected profits/losses, discounted based on our average borrowing rate, which is currently 7.3%.

The fair value of the profit sharing liability will change each period as a result of (a) any changes in our estimate of Longmen Joint Venture’s projected profits/losses over the remaining term of the Agreement, (b) any change in the discount rate used, based on changes in our current or expected borrowing rate, (c) the change in fair value related to the passage of time and change in the number of future periods over which the present value of future cash flows is estimated and (d) any difference between the previously estimated operating results for the current period and actual results.

Each period, the Company considers whether the discount rate based on the Company’s average borrowing rate should be adjusted based upon the current and expected future financial condition of the Company. To date, the Company has not considered any adjustment to be necessary based upon, but not limited to, the following assumptions:

· because the joint venture partner of Longmen Joint Venture is a state-owned enterprise with an excellent credit history, PRC banks grant similar credit treatment to Longmen Joint Venture in terms of credit availability

· the current average borrowing rate of enterprises in the steel industry in the PRC is similar to this borrowing rate

· the current new/renewal borrowing rates of the Company’s bank loans are similar to prior periods

· the People’s Bank of China has not recently adjusted any borrowing rate

· PRC bank interest rates are not industry specific. The downtrend in the steel industry did not materially impact the bank borrowing rates for steel companies

· the bank interest rates are assessed by each individual bank and governed by the Chinese banking regulatory bodies. Reports from credit rating research firms are not commonly used by PRC banks

The projected profits/losses in Longmen Joint Venture are based upon, but not limited to, the following assumptions:

· 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

· interest rate index

· gross national product index

· industry index

· government policy

From inception to December 31, 2012, the assumptions underlying the estimated fair value did not change significantly. Beginning in the first quarter of 2013, the assumptions related to unit selling prices and costs were revised, resulting in a reduction of the estimated profit sharing liability. These assumptions were further revised during 2013. The above assumptions were again reviewed by the Company at June 30, 2014 but no major change was deemed necessary to the assumptions used at December 31, 2013. For the six months ended June 30, 2014, the Company recognized a loss on the change in the fair value of the profit sharing liability of $2.9 million due to a $5.7 million reduction in the present value discount offset by a $2.8 million gain resulting from the Asset Pool’s operating results for the six months ended June 30, 2014 being slightly less favorable than previously estimated as of December 31, 2013.

The estimated fair value of the profit sharing liability at June 30, 2014 is $164.1 million. Changes in any of the assumptions used to estimate the fair value of the profit sharing liability will change the liability accordingly. If we were to reduce the projected bank borrowing rate used to discount the liability to a present value by 1.0% and other factors remained unchanged, our profit sharing liability as of June 30, 2014 would have been $187.3 million and we would increase the loss from the change in the fair value of the profit sharing liability by $23.2 million. If we were to 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 June 30, 2014 would have been $162.2 million and we would decrease the loss from the change in the fair value of the profit sharing liability by $1.9 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 June 30, 2014:

(in thousands)	Carrying Value as of June 30, 2014		Fair Value Measurements at June 30, 2014 Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Profit sharing liability	$	164,067	$	-	$	-	$	164,067
Total	$	164,067	$	-	$	-	$	164,067

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, 2013:

(in thousands)	Carrying Value as of December 31, 2013		Fair Value Measurements at December 31, 2013 Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Profit sharing liability	$	162,295	$	-	$	-	$	162,295
Total	$	162,295	$	-	$	-	$	162,295

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 six months ended June 30, 2014 and for the year ended December 31, 2013:

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Beginning balance	$	162,295	$	328,828
Change in fair value of profit sharing liability:
Change in estimate of future operating profits		-		(174,821)
Change in discount rate		-		-
Change in the number of future periods over which the present value of future cash flows is estimated		5,778		16,872
Difference between the previously estimated operating results for the current period and actual results		(2,809)		(16,620)
Change in derivative liabilities - warrants		-		1
Exchange rate effect		(1,197)		8,035
Ending balance	$	164,067	$	162,295

Except for the derivative liabilities related to the profit sharing liability and to the warrants issued by the Company, which expired on May 13, 2013, the Company did not identify any other assets or liabilities that are required to be presented on the balance sheet at fair value.

(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 requests 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 expense for early submission requests for payment for the three months ended June 30, 2014 and 2013 amounted to $12.8 million and $6.5 million, respectively, and amounted to $26.9 million and $17.3 million, respectively, for the six months ended June 30, 2014 and 2013.

(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	10-20 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 betterments 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 their 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.

(k) 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 June 30, 2014, 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 has a twenty-year term.

Long Steel Group contributed land use rights for a total amount of $24.1 million (RMB 148.3 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 in
	(in thousands)
General Steel (China)	$	3,856		2050 & 2053
Longmen Joint Venture	$	24,097		2048 & 2052
Maoming Hengda	$	2,697		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 rights amounting to $2.4 million (RMB 15.0 million), which is amortized over the estimated recoverable reserve of 4.2 million tons.

(l) 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 June 30, 2014 and December 31, 2013.

Unconsolidated entities	Year acquired		June 30, 2014 Net investment (In thousands)		Owned %		December 31, 2013 Net investment (In thousands)		Owned %
Xi’an Delong Powder Engineering Materials Co., Ltd.		2007	$	1,098		24.1	$	1,215		24.1

The table below summarizes General Steel (China)’s investment holding (see Note 2(a) - Basis of presentation) as of June 30, 2014 and December 31, 2013.

Unconsolidated entities	Year acquired	June 30, 2014 Net investment (In thousands)		Owned %	December 31, 2013 Net investment (In thousands)		Owned %
Tianwu General Steel Material Trading Co., Ltd.	2010	$	15,612	32.0	$	15,728	32.0

Total investment income (loss) in unconsolidated subsidiaries amounted to $0.05 million and $0.13 million for the three months ended June 30, 2014 and 2013, respectively, and $0.06 million and $0.09 million for the six months ended June 30, 2014 and 2013, respectively, which was included in “Income from equity investments” in the condensed consolidated statements of operations and comprehensive (loss) income.

(m) Revenue recognition

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

The Company infrequently engages in trading transactions in which the Company acts as an agent between the suppliers and the customers. The trading arrangements are such that the suppliers are the primary obligors, the Company does not have any general inventory risk, physical inventory loss risk or credit risk, and the Company does not have latitude in establishing price. Sales and cost of goods sold from these trading arrangements are recorded at the net amount retained in accordance with ASC 605-45.

(n) Recently issued accounting pronouncements

In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. The new guidance also requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. The amendments in the ASU are effective in the first quarter of 2015 for public organizations with calendar year ends. Early adoption is permitted. The Company does not expect the adoption of this guidance will have a significant impact on the Company’s financial position and results of operations.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606. This Update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards. The guidance in this Update supersedes the revenue recognition requirements in Topic 605, Revenue Recognition and most industry-specific guidance. The core principle of the guidance is that an entity should recognize revenue to illustrate the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance also includes a cohesive set of disclosure requirements that will provide users of financial statements with comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from a reporting organization’s contracts with customers. This ASU is effective retrospectively for fiscal years, and interim periods within those years beginning after December 15, 2016 for public companies and 2017 for non-public entities. Management is evaluating the effect, if any, on the Company’s financial position and results of operations.

(o) Reclassifications

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

XML

CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $)	Jun. 30, 2014	Dec. 31, 2013
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	58,314,688	58,234,688
Common stock, shares, outstanding	55,842,382	55,762,382
Treasury stock, shares	2,472,306	2,472,306

XML

Warrants

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

Warrants and Rights Note Disclosure [Text Block]

Note 12 – Warrants

The Company previously had 3,900,871 common stock warrants outstanding, which were issued in connection with $40 million of convertible notes issued by the Company in 2007. The warrants, which were accounted for as a derivative liability at fair value, expired unexercised on May 13, 2013. 

XML

Related party transactions and balances (Details Textual) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended				3 Months Ended		6 Months Ended
	Jun. 30, 2014 USD ($)	Jun. 30, 2014 USD ($)	Dec. 31, 2013 USD ($)	Nov. 19, 2013 USD ($)	Nov. 19, 2013 CNY	Jun. 30, 2014 Shaanxi Iron and Steel Group [Member] USD ($)	Jun. 30, 2013 Shaanxi Iron and Steel Group [Member] USD ($)	Jun. 30, 2014 Shaanxi Iron and Steel Group [Member] USD ($)	Jun. 30, 2013 Shaanxi Iron and Steel Group [Member] USD ($)	Jun. 30, 2014 Tianjin Dazhan Industry Co Ltd [Member] USD ($)	Dec. 31, 2013 Tianjin Dazhan Industry Co Ltd [Member] USD ($)	Nov. 19, 2013 Tianjin Dazhan Industry Co Ltd [Member] USD ($)	Nov. 19, 2013 Tianjin Dazhan Industry Co Ltd [Member] CNY
Related Party Transaction [Line Items]
Related Party Loans Secured	$ 201.7	$ 201.7	$ 205.8
Capital Leases, Income Statement, Lease Revenue						0.5	0.5	1.1	1.1
Percentage Of Equity Interest Sold												28.00%	28.00%
Proceeds From Sale Of Equity Interest				13.6	84.3							13.6	84.3
Percentage Of Equity Interest Retained				32.00%	32.00%							32.00%	32.00%
Gain On Equity Interest Deconsolidate												1.0
Equity Method Investments										15.6	15.8
Cost Of Goods Sold From Related Parties	$ 58.7	$ 91.9

XML

Related party transactions and balances (Details 5) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2014	Dec. 31, 2013
Related Party Transaction [Line Items]
Other receivables - related parties	$ 57,983	$ 57,983	$ 54,106
Long Steel Group [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture	Noncontrolling shareholder of Longmen Joint Venture
Other receivables - related parties	379	379	406
Shaanxi Steel [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Majority shareholder of Long Steel Group
Other receivables - related parties	48,532	48,532	46,439
Tianjin General Quigang Pipe Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Other receivables - related parties	1,238	1,238	1,247
Tianjin Dazhan Industry Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Other receivables - related parties	0	0	491
Beijing Shenhua Xinyuan Metal Materials Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Other receivables - related parties	4,865	4,865	4,901
Others [Member]
Related Party Transaction [Line Items]
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	738	738	622
Victory Energy Resource Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Other receivables - related parties	$ 2,231	$ 2,231	$ 0

XML

Related party transactions and balances (Details 3) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Related Party Transaction [Line Items]
Loans receivable - related parties	$ 4,540	$ 4,540
Teamlink Investment Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Partially owned by CEO through indirect shareholding
Loans receivable - related parties	$ 4,540	$ 4,540

XML

Document And Entity Information	6 Months Ended
	Jun. 30, 2014	Aug. 01, 2014
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
Trading Symbol	GSI
Entity Common Stock, Shares Outstanding		58,314,688
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2014
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2014

XML

Supplemental disclosure of cash flow information

6 Months Ended

Jun. 30, 2014

Supplemental Cash Flow Elements [Abstract]

Cash Flow Supplemental Disclosures [Text Block]

Note 13 - Supplemental disclosure of cash flow information

Interest paid, net of amounts capitalized, amounted to $12.4 million and $7.6 million for the six months ended June 30, 2014 and 2013, respectively.

The Company paid income taxes of $0.1 million and $0.2 million during the six months ended June 30, 2014 and 2013, respectively.

During the six months ended June 30, 2014 and 2013, the Company had receivables of $(0.01) million and $1.0 million, respectively, as a result of the disposal of equipment that have not been collected.

During the six months ended June 30, 2014 and 2013, the Company used $1.1 million and $19.0 million of inventory, respectively, in plant and equipment construction.

The Company had $2.3 million notes receivable from financing sales loans to be converted to cash as of June 30, 2014.

During the six months ended June 30, 2014, the Company incurred $4.7 million in accounts payable for the purchase of equipment and construction in progress.

During the six months ended June 30, 2014 and 2013, one of the Company’s unconsolidated entities declared a dividend and the Company is entitled to a dividend of $0.2 million and $0.2 million, respectively, which has not yet been collected.

During the six months ended June 30, 2014, the Company converted $(0.05) million of equipment into inventory production.

During the six months ended June 30, 2014, the Company acquired $5.9 million of equipment through capital leases.

XML

Supplemental disclosure of cash flow information (Details Textual) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Supplemental Disclosure Of Cash Flow Information [Line Items]
Interest Paid, Net	$ 12.4	$ 7.6
Income Taxes Paid	0.1	0.2
Dividend Receivables Value	0.2	0.2
Disposal Of Equipment Value	(0.01)	1.00
Inventory Productions, Equipment Conversion	(0.05)
Inventory Utilized In Plant and Equipment Construction	1.1	19.0
Construction in Progress Expenditures Incurred but Not yet Paid	4.7
Notes Receivable Converted To Cash	2.3
Capital Leases, Lessee Balance Sheet, Assets by Major Class, Flight Equipment, Net	$ 5.9

XML

Related party transactions and balances (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2014		Jun. 30, 2013		Jun. 30, 2014	Jun. 30, 2013
Related Party Transaction [Line Items]
Related Party Transaction, Purchases from Related Party	$ 250,211		$ 234,099		$ 509,215	$ 427,484
Long Steel Group [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture				Noncontrolling shareholder of Longmen Joint Venture
Related Party Transaction, Purchases from Related Party	100,504		170,005		252,276	274,498
Tianjin Hengying Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship					Partially owned by CEO through indirect shareholding
Related Party Transaction, Purchases from Related Party	17,721	[1]	0	[1]	45,640	0
Tianjin General Quigang Pipe Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship					Partially owned by CEO through indirect shareholding
Related Party Transaction, Purchases from Related Party	4,253	[1]	0	[1]	8,528	0
Hancheng Haiyan Coking Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Long Steel Group				Noncontrolling shareholder of Longmen Joint Venture
Related Party Transaction, Purchases from Related Party	40,179		53,193		84,267	116,991
Xi'an Pinghe Metallurgical Raw Material Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Long Steel Group				Noncontrolling shareholder of Long Steel Group
Related Party Transaction, Purchases from Related Party	5,016		742		5,920	12,497
Shaanxi Long Steel Group Baoji Steel Rolling Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship					Subsidiary of Long Steel Group
Related Party Transaction, Purchases from Related Party					0	53
Shaanxi Junlong Rolling Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Investee of Long Steel Group				Investee of Long Steel Group
Related Party Transaction, Purchases from Related Party	0		1		0	211
Shaanxi Huafu New Energy Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Significant influence by the Long Steel Group				Significant influence by the Long Steel Group
Related Party Transaction, Purchases from Related Party	7,561		8,560		14,221	18,089
Beijing Daishang Trading Co Ltd [Member]
Related Party Transaction [Line Items]
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	0		1,432		0	4,909
Tianwu General Steel Material Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Investee of General Steel (China)				Investee of General Steel (China)
Related Party Transaction, Purchases from Related Party	73,940		0		97,279	0
Others [Member]
Related Party Transaction [Line Items]
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	$ 1,037		$ 166		$ 1,084	$ 236

[1] The CEO referred to herein is the chief executive officer of General Steel Holdings, Inc.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
SALES	$ 508,637	$ 517,350	$ 1,020,642	$ 1,019,781
SALES - RELATED PARTIES	79,376	136,301	161,582	285,161
TOTAL SALES	588,013	653,651	1,182,224	1,304,942
COST OF GOODS SOLD	482,011	540,271	1,012,755	1,038,897
COST OF GOODS SOLD - RELATED PARTIES	77,908	148,916	163,936	297,514
TOTAL COST OF GOODS SOLD	559,919	689,187	1,176,691	1,336,411
GROSS PROFIT (LOSS)	28,094	(35,536)	5,533	(31,469)
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	(18,849)	(20,848)	(39,902)	(39,803)
CHANGE IN FAIR VALUE OF PROFIT SHARING LIABILITY	(2,920)	9,494	(2,969)	56,273
INCOME (LOSS) FROM OPERATIONS	6,325	(46,890)	(37,338)	(14,999)
OTHER INCOME (EXPENSE)
Interest income	4,066	3,383	7,258	5,822
Finance/interest expense	(26,619)	(21,216)	(55,314)	(46,073)
Gain (loss) on disposal of equipment and intangible assets	(142)	(235)	(96)	96
Income from equity investments	54	132	67	90
Foreign currency transaction gain	(963)	98	(1,817)	126
Lease income	542	539	1,088	1,071
Other non-operating (expense) income, net	302	521	126	790
Other expense, net	(22,760)	(16,778)	(48,688)	(38,078)
LOSS BEFORE PROVISION FOR INCOME TAXES AND NONCONTROLLING INTEREST	(16,435)	(63,668)	(86,026)	(53,077)
PROVISION FOR INCOME TAXES
Current	107	105	112	176
Deferred	0	0	0	0
Provision for income taxes	107	105	112	176
NET LOSS	(16,542)	(63,773)	(86,138)	(53,253)
Less: Net loss attributable to noncontrolling interest	(5,523)	(23,955)	(31,555)	(16,538)
NET LOSS ATTRIBUTABLE TO GENERAL STEEL HOLDINGS, INC.	(11,019)	(39,818)	(54,583)	(36,715)
NET LOSS	(16,542)	(63,773)	(86,138)	(53,253)
OTHER COMPREHENSIVE LOSS
Foreign currency translation adjustments	(929)	(7,210)	3,741	(9,736)
COMPREHENSIVE LOSS	(17,471)	(70,983)	(82,397)	(62,989)
Less: Comprehensive loss attributable to noncontrolling interest	(5,875)	(26,745)	(30,101)	(20,290)
COMPREHENSIVE LOSS ATTRIBUTABLE TO GENERAL STEEL HOLDINGS, INC.	$ (11,596)	$ (44,238)	$ (52,296)	$ (42,699)
WEIGHTED AVERAGE NUMBER OF SHARES
Basic and Diluted (in shares)	55,842	54,980	55,828	54,893
LOSS PER SHARE
Basic and Diluted (in dollars per share)	$ (0.20)	$ (0.72)	$ (0.98)	$ (0.67)

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Plant and equipment, net

6 Months Ended

Jun. 30, 2014

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:

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Buildings and improvements	$	280,272	$	274,402
Machinery		658,159		667,093
Machinery under capital lease		625,196		623,895
Transportation and other equipment		23,322		22,991
Construction in progress		38,736		11,412
Subtotal		1,625,685		1,599,793
Less: accumulated depreciation		(372,334)		(327,886)
Total	$	1,253,351	$	1,271,907

Construction in progress consisted of the following as of June 30, 2014:

Construction in progress description	Value		Completion	Estimated additional cost to complete
	(In thousands)		date	(In thousands)
Factory wall remodel		1,022	July 2014		77
Equipment updates		109	July 2014		3,206
Sintering machine construction		4,830	November 2014		140,122
#5 blast furnace construction		22,970	December 2014		150,155
Electrical substation construction		13	August 2014		24,419
Reconstruction of miscellaneous factory buildings		5,547	October 2014		4,337
Project materials		2,133			-
Others		2,112			-
Total	$	38,736		$	326,316

The Company 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. During 2013 and 2014, Longmen Joint Venture entered into a number of capital lease agreements for energy-saving equipment installed throughout the steel production line. The Company is obligated under the capital lease for the equipment upon the confirmation of the energy-saving rate between the Company and its vendors.

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

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Machinery	$	625,196	$	623,895
Less: accumulated depreciation		(92,037)		(77,086)
Carrying value of leased assets	$	533,159	$	546,809

The Company assessed the recoverability of all of its remaining long lived assets at June 30, 2014 and December 31, 2013, respectively, and such assessment did not result in any impairment charges.

Depreciation expense for the three months ended June 30, 2014 and 2013 amounted to $23.2 million and $21.4 million, respectively, and for the six months ended June 30, 2014 and 2013, amounted to $47.3 and $42.5 million, respectively. These amounts include depreciation of assets held under capital leases for the three months ended June 30, 2014 and 2013, which amounted to $7.7 million and $7.1 million, respectively, and for the six months ended June 30, 2014 and 2013, amounted to $15.6 and $14.1 million, respectively.

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Advances on inventory purchases

6 Months Ended

Jun. 30, 2014

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 $177.8 million and $127.9 million as of June 30, 2014 and December 31, 2013, respectively.

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Related party transactions and balances

6 Months Ended

Jun. 30, 2014

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

Note 18 – Related party transactions and balances

Related party transactions

a.  Capital lease

As disclosed in Note 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:

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Machinery	$	601,398	$	605,839
Less: accumulated depreciation		(90,460)		(76,740)
Carrying value of leased assets	$	510,938	$	529,099

b.  The following chart summarizes sales to related parties for the three and six months ended June 30, 2014 and 2013. 

Name of related parties	Relationship	Three months ended June 30, 2014		Three months ended June 30, 2013
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	25,150	$	82,286
Shaanxi Yuchang Trading Co., Ltd	Significant influence by Long Steel Group*		-		5,975
Shaanxi Haiyan Trade Co., Ltd	Significant influence by Long Steel Group*		805		5,004
Shaanxi Shenganda Trading Co., Ltd	Significant influence by Long Steel Group*		26,967		18,393
Shaanxi Steel	Majority shareholder of Long Steel Group		626		448
Shaanxi Coal and Chemical Industry Group Co., Ltd.	Shareholder of Shaanxi Steel		16,420		12,792
Shaanxi Long Steel Group Baoji Steel Rolling Co., Ltd	Subsidiary of Long Steel Group		5,117		114
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		4,291		11,289
Total		$	79,376	$	136,301

*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.

Name of related parties	Relationship	Six months ended June 30, 2014		Six months ended June 30, 2013
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	69,950	$	162,961
Sichuan Yutai Trading Co., Ltd	Significant influence by Long Steel Group		-		72
Shaanxi Yuchang Trading Co., Ltd	Significant influence by Long Steel Group		-		20,410
Shaanxi Haiyan Trade Co., Ltd	Significant influence by Long Steel Group		820		15,596
Shaanxi Shenganda Trading Co., Ltd	Significant influence by Long Steel Group		47,703		36,679
Shaanxi Steel	Majority shareholder of Long Steel Group		1,097		1,411
Shaanxi Coal and Chemical Industry Group Co., Ltd.	Shareholder of Shaanxi Steel		21,389		14,626
Shaanxi Long Steel Group Baoji Steel Rolling Co., Ltd	Subsidiary of Long Steel Group		11,735		2,113
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		8,888		31,293
Total		$	161,582	$	285,161

Sales to related parties in trading transactions, which were netted against the corresponding cost of goods sold, amounted to $58.7 million and $91.9 million for the three and six months ended June 30, 2014, respectively. See Note 2(m) Revenue Recognition for details.

c. The following charts summarize purchases from related parties for the three and six months ended June 30, 2014 and 2013.

Name of related parties	Relationship	Three months ended June 30, 2014		Three months ended June 30, 2013
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	100,504	$	170,005
Hancheng Haiyan Coking Co., Ltd	Noncontrolling shareholder of Long Steel Group		40,179		53,193
Xi’an Pinghe Metallurgical Raw Material Co., Ltd	Noncontrolling shareholder of Long Steel Group		5,016		742
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		-		1
Shaanxi Huafu New Energy Co., Ltd	Significant influence by the Long Steel Group		7,561		8,560
Beijing Daishang Trading Co., Ltd.	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		-		1,432
Tianwu General Steel Material Trading Co., Ltd.	Investee of General Steel (China)		73,940		-
Tianjin General Quigang Pipe Co., Ltd	Partially owned by CEO through indirect shareholding**		4,253		-
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding**		17,721		-
Others	Entities either owned or have significant influence by our affiliates or management		1,037		166
Total		$	250,211	$	234,099

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

Name of related parties	Relationship	Six months ended June 30, 2014		Six months ended June 30, 2013
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	252,276	$	274,498
Hancheng Haiyan Coking Co., Ltd	Noncontrolling shareholder of Long Steel Group		84,267		116,991
Xi’an Pinghe Metallurgical Raw Material Co., Ltd	Noncontrolling shareholder of Long Steel Group		5,920		12,497
Shaanxi Long Steel Group Baoji Steel Rolling Co., Ltd	Subsidiary of Long Steel Group		-		53
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		-		211
Shaanxi Huafu New Energy Co., Ltd	Significant influence by the Long Steel Group		14,221		18,089
Beijing Daishang Trading Co., Ltd.	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		-		4,909
Tianwu General Steel Material Trading Co., Ltd.	Investee of General Steel (China)		97,279		-
Tianjin General Quigang Pipe Co., Ltd	Partially owned by CEO through indirect shareholding		8,528		-
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		45,640		-
Others	Entities either owned or have significant influence by our affiliates or management		1,084		236
Total		$	509,215	$	427,484

Related party balances

a. Loans receivable – related parties:

Name of related parties	Relationship	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Teamlink Investment Co., Ltd	Partially owned by CEO through indirect shareholding		4,540		4,540
Total		$	4,540	$	4,540

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

b. Accounts receivables – related parties:

Name of related parties	Relationship	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	1,316	$	548
Shaanxi Shenganda Trading Co., Ltd	Significant influence by Long Steel Group		-		-
Tianjin Daqiuzhuang Steel Plates	Partially owned by CEO through indirect shareholding		19		19
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		2,586		-
Shaanxi Steel	Majority shareholder of Long Steel Group		1,866		1,741
Others			1		634
Total		$	5,788	$	2,942

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	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	379	$	406
Shaanxi Steel	Majority shareholder of Long Steel Group		48,532		46,439
Tianjin General Quigang Pipe Co., Ltd	Partially owned by CEO through indirect shareholding		1,238		1,247
Tianjin Dazhan Industry Co, Ltd	Partially owned by CEO through indirect shareholding		-		491
Beijing Shenhua Xinyuan Metal Materials Co., Ltd.	Partially owned by CEO through indirect shareholding		4,865		4,901
Victory Energy Resource Co., Ltd	Partially owned by CEO through indirect shareholding		2,231		-
Others	Entities either owned or have significant influence by our affiliates or management		738		622
Total		$	57,983	$	54,106

d. Advances on inventory purchase – related parties:

Name of related parties	Relationship	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	-	$	9,123
Shaanxi Shenganda Trading Co., Ltd.	Significant influence by Long Steel Group		13,088		25,607
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		1,379		10,343
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		61,440		16,158
Tianjin General Qiugang Pipe Co., Ltd	Partially owned by CEO through indirect shareholding		202		555
Maoming Shengze Trading Co., Ltd	Partially owned by CEO through indirect shareholding		43,137		21,197
Others	Entities either owned or have significant influence by our affiliates or management		33		20
Total		$	119,279	$	83,003

e. Accounts payable - related parties:

Name of related parties	Relationship	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Hancheng Haiyan Coking Co., Ltd	Noncontrolling shareholder of Longmen Joint Venture	$	62,890	$	58,163
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		164,073		134,758
Shaanxi Coal and Chemical Industry Group Co., Ltd.	Shareholder of Shaanxi Steel		3,507		29,990
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		972		958
Xi’an Pinghe Metallurgical Raw Material Co., Ltd	Noncontrolling shareholder of Long Steel Group		2,036		8,714
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		9,862		1
Henan Xinmi Kanghua Fire Refractory Co., Ltd	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		702		716
Beijing Daishang Trading Co., Ltd	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		36		1,004
Tianwu General Steel Material Trading Co., Ltd.	Investee of General Steel (China)		17,299		759
Others	Entities either owned or have significant influence by our affiliates or management		726		630
Total		$	262,103	$	235,692

f. Short-term loans - related parties:

Name of related parties	Relationship	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Shaanxi Steel	Majority shareholder of Long Steel Group	$	81,250	$	49,110
Shaanxi Coal and Chemical Industry Group Co., Ltd	Shareholder of Shaanxi Steel		71,287		28,216
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		-		33,183
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		-		8,178
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		13		6,548
Yangpu Capital Automobile	Partially owned by CEO through indirect shareholding		1,446		1,458
Total		$	153,996	$	126,693

See Note 9 – Debt for the loan details.

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

Name of related party	Relationship	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Shaanxi Steel	Majority shareholder of Long Steel Group	$	62,374	$	53,013
Total		$	62,374	$	53,013

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.

Name of related parties	Relationship	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Tianjin Hengying Trading Co, Ltd	Partially owned by CEO through indirect shareholding	$	377	$	380
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		44,730		43,636
Shaanxi Steel	Majority shareholder of Long Steel Group		48,670		44,363
Wendlar Investment & Management Group Co., Ltd	Common control under CEO		1,053		895
Yangpu Capital Automobile	Partially owned by CEO through indirect shareholding		362		291
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		470		473
Maoming Shengze Trading Co., Ltd	Partially owned by CEO through indirect shareholding		2,201		1,745
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		346		921
Total		$	98,209	$	94,079

i. Customer deposits – related parties:

Name of related parties	Relationship	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Shaanxi Yuchang Trading Co., Ltd	Significant influence by Long Steel Group	$	10	$	10
Shaanxi Coal and Chemical Industry Group Co., Ltd	Shareholder of Shaanxi Steel		13,749		-
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		8,378		15,038
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		16		2,748
Shaanxi Shenganda Trading Co., Ltd	Significant influence by Long Steel Group		-		275
Tianwu General Steel Material Trading Co., Ltd.	Investee of General Steel (China)		113,549		46,521
Shaanxi Haiyan Trade Co., Ltd	Significant influence by Long Steel Group		7,186		-
Others			-		289
Total		$	142,888	$	64,881

j. Deposits due to sales representatives – related parties

Name of related parties	Relationship	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Gansu Yulong Trading Co., Ltd.	Significant influence by Long Steel Group	$	1,073	$	1,408
Shaanxi Yuchang Trading Co., Ltd	Significant influence by Long Steel Group		585		589
Total		$	1,658	$	1,997

k. Long-term loans – related party:

Name of related party	Relationship	June 30, 2014		December 31, 2013
		(in thousands)		(in thousands)
Shaanxi Steel	Majority shareholder of Long Steel Group	$	9,750	$	19,644
Total		$	9,750	$	19,644

The Company also provided guarantees on related parties’ bank loans amounting to $201.7 million and $205.8 million as of June 30, 2014 and as of December 31, 2013, respectively.

l. Deferred lease income

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Beginning balance	$	77,444	$	77,199
Less: Lease income realized		(1,088)		(2,158)
Exchange rate effect		(565)		2,403
Ending balance		75,791		77,444
Current portion		(2,171)		(2,187)
Noncurrent portion	$	73,620	$	75,257

For the three months ended June 30, 2014 and 2013, the Company realized lease income from Shaanxi Steel, a related party, amounting to $0.5 million and $0.5 million, respectively.

For the six months ended June 30, 2014 and 2013, the Company realized lease income from Shaanxi Steel, a related party, amounting to $1.1 million and $1.1 million, respectively.

m. Equity

On November 19, 2013, the Company sold its 28% equity interest in Tianwu, held by Yangpu Shengtong, to Tianjin Dazhan Industry Co., Ltd., a related party through indirect common ownership by the CEO, for $13.6 million (RMB 84.3 million) while retaining the 32% interest held by General Steel (China). As a result of this transaction, the Company met the criteria under ASC 810-10-40-4 to deconsolidate Tianwu as of the ownership disposal date and recognize a gain, which amounted to $1.0 million. After the deconsolidation of Tianwu, General Steel (China)’s 32% interest in Tianwu is accounted for as an equity method investment, which amounted to $15.6 million and $15.8 million as of June 30, 2014 and December 31, 2013, respectively.

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Deferred lease income

6 Months Ended

Jun. 30, 2014

Deferred Revenue [Abstract]

Deferred Revenue Disclosure [Text Block]

Note 14 - Deferred lease income

To compensate the Company for costs and economic losses incurred during construction of the iron and steel making facilities owned by Shaanxi Steel and which are leased by the Longmen Joint Venture, 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 $14.5 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 $7.1 million (RMB 43.9 million) was deferred and is being 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 June 30, 2014 and 2013, the Company recognized $0.5 million and $0.5 million, respectively. For the six months ended June 30, 2014 and 2013, the Company recognized $1.1 million and $1.1 million, respectively. As of June 30, 2014 and December 31, 2013, the balance of deferred lease income amounted to $75.8 million and $77.4 million, respectively, of which $2.2 million and $2.2 million represents amounts to be amortized within one year. See Note 18 – Related party transactions and balances (m) – Deferred lease income for details.

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Taxes (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Taxes [Line Items]
Current	$ 107	$ 105	$ 112	$ 176
Deferred	0	0	0	0
Provision for income taxes	$ 107	$ 105	$ 112	$ 176

XML

Customer deposits

6 Months Ended

Jun. 30, 2014

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 June 30, 2014 and December 31 2013, customer deposits amounted to $279.2 million and $152.7 million, respectively, including deposits received from related parties, which amounted to $142.9 million and $64.9 million, respectively.

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Accounts receivable (including related parties), net (Details 1) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning balance	$ 1,053	$ 1,367
Charge to expense	0	96
Less: recovery	(244)	(449)
Exchange rate effect	(8)	39
Ending balance	$ 801	$ 1,053

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Segments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2014		Jun. 30, 2013		Jun. 30, 2014		Jun. 30, 2013		Dec. 31, 2013
Sales:
Segment Reporting Information, Revenue for Reportable Segment	$ 588,012		$ 658,516		$ 1,182,277		$ 1,355,522
Interdivisional Sales Revenue	1		(4,865)		(53)		(50,580)
TOTAL SALES	588,013		653,651		1,182,224		1,304,942
Gross profit:
Segment Reporting Gross Profit Loss	28,094		(35,536)		5,533		(31,469)
Interdivision Gross Profit Loss	0		0		0		0
GROSS PROFIT	28,094		(35,536)		5,533		(31,469)
Income (loss) from operations:
Segment Reporting Income Loss From Operations	7,221		(45,644)		(35,205)		(12,672)
Interdivision income (loss) from operations	0		0		0		0
Reconciling item	(896)	[1]	(1,246)	[1]	(2,133)	[1]	(2,327)	[1]
INCOME (LOSS) FROM OPERATIONS	6,325		(46,890)		(37,338)		(14,999)
Net income (loss) attributable to General Steel Holdings, Inc.:
Segment Reporting Income Loss Net	(10,176)		(38,642)		(52,625)		(34,533)
Interdivision net income	0		0		0		0
Reconciling item (1)	(843)	[1]	(1,176)	[1]	(1,958)	[1]	(2,182)	[1]
NET LOSS ATTRIBUTABLE TO GENERAL STEEL HOLDINGS, INC.	(11,019)		(39,818)		(54,583)		(36,715)
Depreciation and amortization:
Depreciation, amortization and depletion	23,442		21,709		47,788		43,067
Finance/interest expenses:
Interdivision Interest Expense	0		0		0		0
Reconciling item	1	[1]	1	[1]	96	[1]	2	[1]
Finance/interest expenses	26,619		21,216		55,314		46,073
Capital expenditure
Consolidated capital expenditures	55,852		27,925		112,713		44,019
Reconciling item	0	[1]	0	[1]	0	[1]	0	[1]
ASSETS
Interdivision Assets	(33,208)				(33,208)				(34,213)
Reconciling item	8,028	[2]			8,028	[2]			5,817	[2]
TOTAL ASSETS	2,556,474				2,556,474				2,700,358
Longmen Joint Venture [Member]
Sales:
Segment Reporting Information, Revenue for Reportable Segment	587,314		650,741		1,181,328		1,297,489
Gross profit:
Segment Reporting Gross Profit Loss	28,229		(36,193)		6,010		(31,826)
Income (loss) from operations:
Segment Reporting Income Loss From Operations	8,128		(44,684)		(31,166)		(9,747)
Net income (loss) attributable to General Steel Holdings, Inc.:
Segment Reporting Income Loss Net	(8,077)		(34,944)		(46,111)		(26,619)
Depreciation and amortization:
Depreciation, amortization and depletion	22,778		20,850		46,308		41,281
Finance/interest expenses:
Segment Reporting Finance Interest Expense	25,131		18,243
Finance/interest expenses					52,121		40,393
Capital expenditure
Consolidated capital expenditures	55,852		27,922		112,599		44,006
ASSETS
TOTAL ASSETS	2,349,913				2,349,913				2,573,212
Maoming Hengda Steel Company Ltd [Member]
Sales:
Segment Reporting Information, Revenue for Reportable Segment	215		1,349		251		2,872
Gross profit:
Segment Reporting Gross Profit Loss	21		473		45		245
Income (loss) from operations:
Segment Reporting Income Loss From Operations	(54)		(225)		(576)		(1,022)
Net income (loss) attributable to General Steel Holdings, Inc.:
Segment Reporting Income Loss Net	(123)		(216)		(660)		(987)
Depreciation and amortization:
Depreciation, amortization and depletion	158		315		462		626
Finance/interest expenses:
Segment Reporting Finance Interest Expense	0		0
Finance/interest expenses					0		0
Capital expenditure
Consolidated capital expenditures	0		0		32		2
ASSETS
TOTAL ASSETS	27,786				27,786				29,211
Baotou Steel Pipe Joint Venture [Member]
Sales:
Segment Reporting Information, Revenue for Reportable Segment	483		972		645		981
Gross profit:
Segment Reporting Gross Profit Loss	3		167		(20)		89
Income (loss) from operations:
Segment Reporting Income Loss From Operations	(133)		55		(177)		(305)
Net income (loss) attributable to General Steel Holdings, Inc.:
Segment Reporting Income Loss Net	(106)		46		(141)		(243)
Depreciation and amortization:
Depreciation, amortization and depletion	59		26		121		123
Finance/interest expenses:
Segment Reporting Finance Interest Expense	(1)		0
Finance/interest expenses					0		0
Capital expenditure
Consolidated capital expenditures	0		1		0		8
ASSETS
TOTAL ASSETS	3,290				3,290				4,448
General Steel (China) Tianwu Joint Venture [Member]
Sales:
Segment Reporting Information, Revenue for Reportable Segment	0		5,454		53		54,180
Gross profit:
Segment Reporting Gross Profit Loss	(159)		17		(502)		23
Income (loss) from operations:
Segment Reporting Income Loss From Operations	(720)		(790)		(3,286)		(1,598)
Net income (loss) attributable to General Steel Holdings, Inc.:
Segment Reporting Income Loss Net	(1,870)		(3,528)		(5,713)		(6,684)
Depreciation and amortization:
Depreciation, amortization and depletion	447		518		897		1,037
Finance/interest expenses:
Segment Reporting Finance Interest Expense	1,488		2,972
Finance/interest expenses					3,097		5,678
Capital expenditure
Consolidated capital expenditures	0		2		82		3
ASSETS
TOTAL ASSETS	$ 200,665				$ 200,665				$ 121,883

[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 six months ended June 30, 2014 and 2013.

[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 June 30, 2014 and December 31, 2013.

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Intangible assets, net

6 Months Ended

Jun. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets Disclosure [Text Block]

Note 8 – Intangible assets, net

Intangible assets consist of the following:

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Land use rights	$	30,650	$	30,884
Mining right		2,441		2,459
Software		1,049		743
Subtotal		34,140		34,086
Less:
Accumulated amortization – land use rights		(8,767)		(8,498)
Accumulated amortization – mining right		(1,363)		(1,320)
Accumulated amortization – software		(677)		(561)
Subtotal		(10,807)		(10,379)
Intangible assets, net	$	23,333	$	23,707

The gross amount of the intangible assets amounted to $34.1 million and $34.1 million as of June 30, 2014 and December 31, 2013, respectively. The remaining weighted average amortization period is 33.1 years as of June 30, 2014.

Total amortization expense for the three months ended June 30, 2014 and 2013 amounted to $0.3 million and $0.3 million, respectively, and for the six months ended June 30, 2014 and 2013, amounted to $0.5 million and $0.5 million, respectively.

Total depletion expense for the three months ended June 30, 2014 and 2013 amounted to $0.04 million and $0.02 million, respectively, and for the six months ended June 30, 2014 and 2013, amounted to $0.05 million and $0.1 million, respectively.

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

Year ending	Estimated amortization and depletion expenses		Gross carrying amount
	(in thousands)		(in thousands)
June 30, 2015	$	1,024		22,309
June 30, 2016		1,024		21,285
June 30, 2017		1,024		20,261
June 30, 2018		1,024		19,237
June 30, 2019		1,024		18,213
Thereafter		18,213		-
Total	$	23,333

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Debt

6 Months Ended

Jun. 30, 2014

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 $430.2 million and $399.4 million as of June 30, 2014 and December 31, 2013, respectively. Restricted notes receivable as a guarantee for the notes payable amounted to $51.0 million and $231.7 million as of June 30, 2014 and December 31, 2013, respectively.

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

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
General Steel (China): Notes payable to various banks in China, due various dates from July to December 2014. Restricted cash required of $11.4 million and $16.4 million as of June 30, 2014 and December 31, 2013, respectively; guaranteed by third parties. These notes payable were either repaid or renewed subsequently on the due dates.	$	11,375	$	29,466
Longmen Joint Venture: Notes payable to various banks in China, due various dates from July to December 2014. $418.8 million restricted cash and $51.0 million notes receivable are secured for notes payable as of June 30, 2014, and comparatively $383.0 million restricted cash and $231.7 million notes receivable secured as of December 31, 2013, respectively; some notes are further guaranteed by third parties. These notes payable were either repaid or renewed subsequently on the due dates.		864,104		988,364
Total short-term notes payable	$	875,479	$	1,017,830

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

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
General Steel (China): Loans from various banks in China, due various dates from August 2014 to June 2015. Weighted average interest rate was 7.1% per annum and 7.2% per annum as of June 30, 2014 and December 31, 2013, respectively; some are guaranteed by third parties and related parties. $8.1 million and $0 restricted cash were secured for the loans as of June 30, 2014 and December 31, 2013, respectively; These loans were either repaid or renewed subsequently on the due dates.	$	52,325	$	34,229
Longmen Joint Venture: Loans from various banks in China, due various dates from August 2014 to June 2015. Weighted average interest rate was 6.1% per annum and 6.3% per annum as of June 30, 2014 and December 31, 2013, respectively; some are guaranteed by third parties, accounts receivable, restricted cash or notes receivables. $56.1 million and $163.9 million restricted notes receivable were secured for the loans as of June 30, 2014 and December 31, 2013, respectively; $5.9 million and $0 restricted cash were secured for the loans as of June 30, 2014 and December 31, 2013, respectively; These loans were either repaid or renewed subsequently on the due dates.		149,348		267,688
Total short-term loans - bank	$	201,673	$	301,917

As of June 30, 2014 and December 31, 2013, the Company had not met its financial covenants stipulated by certain loan agreements related to the Company’s debt to asset ratio. As of June 30, 2014, two of General Steel (China)’s bank loans contained financial covenants stipulating debt to asset ratios below 20%. However, as of June 30, 2014, General Steel (China)’s debt to asset ratio was 95.4%. As of December 31, 2013, three of General Steel (China)’s bank loans contained financial covenants stipulating debt to asset ratios below 20% and 70%. However, as of December 31, 2013, General Steel (China)’s debt to asset ratio was 89.7%.

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 June 30, 2014 and December 31, 2013 was $5.2 million and $6.4 million, respectively. According to the Company’s short term loan agreements, the banks have the right to request 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

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Longmen Joint Venture: Loans from various unrelated companies and individuals, due various dates from July to December 2014, and weighted average interest rate was 5.6% per annum and 5.2% per annum as of June 30, 2014 and December 31, 2013, respectively. These loans were either repaid or renewed subsequently on the due dates.	$	17,099	$	22,720
Longmen Joint Venture: Loans from financing sales.		41,119		33,124
Maoming Hengda: Loans from one unrelated party and one related party, due on demand, none interest bearing.		6,177		6,223
Total short-term loans – others	$	64,395	$	62,067

The Company had various loans from unrelated companies amounting to $64.4 million and $62.1 million as of June 30, 2014 and December 31, 2013, respectively. Of the $64.4 million, $6.2 million of loans carry no interest, $41.1 million of financing sales are subject to interest rates ranging between 4.6% and 9.6%, and the remaining $17.1 million are subject to interest rates ranging from 5.0% to 5.8%. 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 Longmen Joint Venture’s subsidiaries, 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 4.6% to 9.6% 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 4.6% to 9.6% 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 consolidated financial statements.

Total financing sales for the three months ended June 30, 2014 and 2013 amounted to $229.1 million and $188.1 million, respectively, and for the six months ended June 30, 2014 and 2013, amounted to $459.6 million and $353.3 million, respectively, which are eliminated in the Company’s consolidated financial statements. The financial cost related to financing sales for the three months ended June 30, 2014 and 2013 amounted to $0.8 million and $3.1 million, respectively, and for the six months ended June 30, 2014 and 2013, amounted to $1.7 million and $3.1 million, respectively.

Short term loans due to related parties

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
General Steel China: Loans from Yangpu Capital Automobile, due on demand, and interest rate is 10% per annum.	$	1,446	$	1,458
Longmen Joint Venture: Loan from Shaanxi Coal and Chemical Industry Group Co., Ltd., due on demand, and interest rate is 7.0% per annum.		8,822		28,216
Longmen Joint Venture: Loan from Shaanxi Steel Group due on various dates from November 2014 to June 2015, and interest rate is 6.6% per annum.		81,250		49,110
Longmen Joint Venture: Loans from financing sales.		62,478		47,909
Total short-term loans - related parties	$	153,996	$	126,693

Long-term loans due to related party

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Longmen Joint Venture: Loans from Shaanxi Steel Group, due on various dates through November 2015 and interest rate is 5.6% per annum.	$	72,124	$	72,657
Less: Current maturities of long-term loans – related party		(62,374)		(53,013)
Long-term loans - related party	$	9,750	$	19,644

Total interest expense, net of capitalized interest, amounted to $8.2 million and $10.5 million for the three months ended June 30, 2014 and 2013, respectively.

Total interest expense, net of capitalized interest, amounted to $17.7 million and $18.5 million for the six months ended June 30, 2014 and 2013, respectively.

Capitalized interest included in construction in progress amounted to $0.2 million and $0.6 million for the three months ended June 30, 2014 and 2013, respectively. 

Capitalized interest included in construction in progress amounted to $0.8 million and $0.8 million for the six months ended June 30, 2014 and 2013, respectively. 

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Deposits due to sales representatives

6 Months Ended

Jun. 30, 2014

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 $23.1 million and $26.3 million in deposits due to sales representatives, including deposits due to related parties, as of June 30, 2014 and December 31, 2013, respectively.

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Plant and equipment, net (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Property, Plant and Equipment [Line Items]
Buildings and improvements	$ 280,272	$ 274,402
Machinery	658,159	667,093
Machinery under capital lease	625,196	623,895
Transportation and other equipment	23,322	22,991
Construction in progress	38,736	11,412
Subtotal	1,625,685	1,599,793
Less: accumulated depreciation	(372,334)	(327,886)
Total	$ 1,253,351	$ 1,271,907

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Taxes (Details 1) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Taxes [Line Items]
Beginning balance	$ 97,569	$ 72,891
Current period addition	4,194	23,293
Current period reversal	(55)	(1,206)
Exchange difference	(726)	2,591
Ending balance	$ 100,982	$ 97,569

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Plant and equipment, net (Details 2) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Property, Plant and Equipment [Line Items]
Machinery	$ 625,196	$ 623,895
Less: accumulated depreciation	(92,037)	(77,086)
Carrying value of leased assets	$ 533,159	$ 546,809

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Related party transactions and balances (Details 14) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Jul. 30, 2014
Related Party Transaction [Line Items]
Beginning balance			$ 77,444	$ 77,199	$ 77,199
Less: Lease income realized	(542)	(539)	(1,088)	(1,071)	(2,158)
Exchange rate effect			(565)		2,403
Ending balance	75,791		75,791		77,444
Current portion	(2,171)		(2,171)		(2,187)	(2,200)
Noncurrent portion	$ 73,620		$ 73,620		$ 75,257

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Advances on inventory purchases (Details Textual) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Advances on inventory purchases [Line Items]
Advances On Inventory Purchases Including Related Parties	$ 177.8	$ 127.9

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Related party transactions and balances (Details 4) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2014		Dec. 31, 2013
Related Party Transaction [Line Items]
Accounts Receivable, Related Parties, Current	$ 5,788	$ 5,788		$ 2,942
Long Steel Group [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture	Noncontrolling shareholder of Longmen Joint Venture
Accounts Receivable, Related Parties, Current	1,316	1,316		548
Tianjin Daqiuzhuang Steel Plates [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Accounts Receivable, Related Parties, Current	19	19		19
Shaanxi Steel [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Majority shareholder of Long Steel Group
Accounts Receivable, Related Parties, Current	1,866	1,866		1,741
Others [Member]
Related Party Transaction [Line Items]
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	1	1		634
Shaanxi Shenganda Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Significant influence by Long Steel Group	[1]
Accounts Receivable, Related Parties, Current	0	0		0
Tianjin Hengying Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Accounts Receivable, Related Parties, Current	$ 2,586	$ 2,586		$ 0

[1] 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.

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Plant and equipment, net (Tables)

6 Months Ended

Jun. 30, 2014

Property, Plant and Equipment [Table Text Block]

Plant and equipment consist of the following:

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Buildings and improvements	$	280,272	$	274,402
Machinery		658,159		667,093
Machinery under capital lease		625,196		623,895
Transportation and other equipment		23,322		22,991
Construction in progress		38,736		11,412
Subtotal		1,625,685		1,599,793
Less: accumulated depreciation		(372,334)		(327,886)
Total	$	1,253,351	$	1,271,907

Schedule Of Construction In Progress [Table Text Block]

Construction in progress consisted of the following as of June 30, 2014:

Construction in progress description	Value		Completion	Estimated additional cost to complete
	(In thousands)		date	(In thousands)
Factory wall remodel		1,022	July 2014		77
Equipment updates		109	July 2014		3,206
Sintering machine construction		4,830	November 2014		140,122
#5 blast furnace construction		22,970	December 2014		150,155
Electrical substation construction		13	August 2014		24,419
Reconstruction of miscellaneous factory buildings		5,547	October 2014		4,337
Project materials		2,133			-
Others		2,112			-
Total	$	38,736		$	326,316

Machinery and Equipment [Member]

Schedule of Capital Leased Assets [Table Text Block]

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

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Machinery	$	625,196	$	623,895
Less: accumulated depreciation		(92,037)		(77,086)
Carrying value of leased assets	$	533,159	$	546,809

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Summary of significant accounting policies (Details 8) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013	Dec. 31, 2012
Summary Of Significant Accounting Policies [Line Items]
Profit sharing liability	$ 164,067	$ 162,295
Total	164,067	162,295	328,828
Fair Value, Inputs, Level 1 [Member]
Summary Of Significant Accounting Policies [Line Items]
Profit sharing liability	0	0
Total	0	0
Fair Value, Inputs, Level 2 [Member]
Summary Of Significant Accounting Policies [Line Items]
Profit sharing liability	0	0
Total	0	0
Fair Value, Inputs, Level 3 [Member]
Summary Of Significant Accounting Policies [Line Items]
Profit sharing liability	164,067	162,295
Total	$ 164,067	$ 162,295

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Profit sharing liability

6 Months Ended

Jun. 30, 2014

Profit Sharing Liability [Abstract]

Profit Sharing Liability [Text Block]

Note 16 – Profit sharing liability

The profit sharing liability component of the capital lease obligation was 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. The profit sharing liability is accounted for separately from the fixed portion of the capital lease obligation (see Note 15 - “Capital lease obligation”) and is accounted for as a derivative instrument in accordance with ASC 815-10-15-83. The estimated fair value of the profit sharing liability is reassessed at the end of each reporting period, with any change in fair value charged or credited to income as “Change in Fair Value of Profit Sharing Liability”. See Note 2(h) – “Financial instruments” for details.

Payments to Shaanxi Steel for the profit sharing liability are not required until net cumulative profits are achieved. Based on the performance of the Asset Pool, no profit sharing payment was made from inception to date.

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Commitment and contingencies

6 Months Ended

Jun. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Note 21 – 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 June 30, 2014 is as follows:

Year ending June 30,	Minimum lease payment
	(in thousands)
2015	$	1,055
2016		566
2017		566
2018		566
2019		566
Years after		19,849
Total minimum payments required	$	23,168

Total rental expense was $0.6 million and $0.8 million for the three months ended June 30, 2014 and 2013, respectively, and $1.5 million and $1.6 million for the six months ended June 30, 2014 and 2013, respectively.

Contractual Commitments

Longmen Joint Venture has $326.3 million contractual obligations related to construction projects as of June 30, 2014 estimated to be fulfilled between May and December 2014.

Contingencies

As of June 30, 2014, Longmen Joint Venture provided guarantees to related parties’ and third parties’ bank loans, including lines of credit and others, amounting to $265.4 million.

Nature of guarantee	Guarantee amount		Guaranty Due Date
	(In thousands)
Line of credit	$	153,563	Various from July 2014 to August 2015
Three-party financing agreements		19,500	Various from July 2014 to May 2015
Confirming storage		52,975	Various from August 2014 to April 2015
Financing by the rights of goods delivery in future		39,406	Various from July to October 2014
Total	$	265,444

Name of parties being guaranteed	Guarantee amount		Guaranty Due Date
	(In thousands)
Long Steel Group	$	82,875	Various from September 2014 to August 2015
Hancheng Haiyan Coking Co., Ltd		39,975	Various from August 2014 to April 2015
Chengdu Zhongyi Steel Co., Ltd		8,125	March 2015
Shaanxi Tianyi Metal Materials Co., Ltd		6,500	December 2014
Xi’an Laisheng Logistics Co., Ltd		11,781	Various from August 2014 to May 2015
Xi'an Kaiyuan Steel Sales Co., Ltd		6,500	January 2015
Shaanxi Longan Industry Co., Ltd.		8,125	December 2014
Hancheng Sanli Furnace Burden Co., Ltd.		16,250	March 2015
Tianjin Dazhan Industry Co., Ltd		38,188	Various from June 2014 to March 2015
Tianjin Hengying Trading Co., Ltd		40,625	Various from July 2014 to January 2015
Jinmen Desheng Metallurgy Co., Ltd		6,500	September 2014
Total	$	265,444

As of June 30, 2014, the Company did not accrue any liability for the amounts the Group has guaranteed for third parties 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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Related party transactions and balances (Details 7) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2014	Dec. 31, 2013
Related Party Transaction [Line Items]
Accounts payable - related parties	$ 262,103	$ 262,103	$ 235,692
Hancheng Haiyan Coking Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture
Accounts payable - related parties	62,890	62,890	58,163
Long Steel Group [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture	Noncontrolling shareholder of Longmen Joint Venture
Accounts payable - related parties	164,073	164,073	134,758
Shaanxi Coal and Chemical Industry Group Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Shareholder of Shaanxi Steel
Accounts payable - related parties	3,507	3,507	29,990
Tianjin Dazhan Industry Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Accounts payable - related parties	972	972	958
Xi'an Pinghe Metallurgical Raw Material Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Long Steel Group	Noncontrolling shareholder of Long Steel Group
Accounts payable - related parties	2,036	2,036	8,714
Henan Xinmi Kanghua Fire Refractory Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Noncontrolling shareholder of Longmen Joint Venture’s subsidiary
Accounts payable - related parties	702	702	716
Beijing Daishang Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary
Accounts payable - related parties	36	36	1,004
Tianwu General Steel Material Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Investee of General Steel (China)	Investee of General Steel (China)
Accounts payable - related parties	17,299	17,299	759
Others [Member]
Related Party Transaction [Line Items]
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	726	726	630
Tianjin Hengying Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship		Partially owned by CEO through indirect shareholding
Accounts payable - related parties	$ 9,862	$ 9,862	$ 1

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Summary of significant accounting policies (Details 6) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
Summary Of Significant Accounting Policies [Line Items]
Financing Amount	$ 362.4
Company D [Member]
Summary Of Significant Accounting Policies [Line Items]
Financing Amount	81.3
Financing period covered	April 22, 2014 – April 22, 2017
Company E [Member]
Summary Of Significant Accounting Policies [Line Items]
Financing Amount	86.0
Financing period covered	April 23, 2014 – April 23, 2017
Company F [Member]
Summary Of Significant Accounting Policies [Line Items]
Financing Amount	81.3
Financing period covered	April 22, 2014 – April 22, 2017
Company G [Member]
Summary Of Significant Accounting Policies [Line Items]
Financing Amount	56.9
Financing period covered	March 5, 2014 – March 5, 2016
Company H [Member]
Summary Of Significant Accounting Policies [Line Items]
Financing Amount	$ 56.9
Financing period covered	March 5, 2014 – March 5, 2016

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Retirement plan (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Defined Contribution Plan Employer Matching Contribution Percent Criteria One			20.00%
Defined Contribution Plan Employer Matching Contribution Percent Criteria Two			12.00%
Pension Expense	$ 3.0	$ 1.9	$ 5.8	$ 4.1
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent			8.00%

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Segments (Tables)

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

The following represents the results of division operations for the three months ended June 30, 2014 and 2013:

(In thousands)
Sales:	2014		2013
Longmen Joint Venture	$	587,314	$	650,741
Maoming Hengda		215		1,349
Baotou Steel Pipe Joint Venture		483		972
General Steel (China) & Tianwu Joint Venture		-		5,454
Total sales		588,012		658,516
Interdivision sales		1		(4,865)
Consolidated sales	$	588,013	$	653,651

Gross profit (loss):	2014		2013
Longmen Joint Venture	$	28,229	$	(36,193)
Maoming Hengda		21		473
Baotou Steel		3		167
General Steel (China) & Tianwu Joint Venture		(159)		17
Total gross profit (loss)		28,094		(35,536)
Interdivision gross profit		-		-
Consolidated gross profit (loss)	$	28,094	$	(35,536)

Income (loss) from operations:	2014		2013
Longmen Joint Venture	$	8,128	$	(44,684)
Maoming Hengda		(54)		(225)
Baotou Steel		(133)		55
General Steel (China) & Tianwu Joint Venture		(720)		(790)
Total income (loss) from operations		7,221		(45,644)
Interdivision income (loss) from operations		-		-
Reconciling item (1)		(896)		(1,246)
Consolidated income (loss) from operations	$	6,325	$	(46,890)

Net income (loss) attributable to General Steel Holdings, Inc.:	2014		2013
Longmen Joint Venture	$	(8,077)	$	(34,944)
Maoming Hengda		(123)		(216)
Baotou Steel		(106)		46
General Steel (China) & Tianwu Joint Venture		(1,870)		(3,528)
Total net loss attributable to General Steel Holdings, Inc.		(10,176)		(38,642)
Interdivision net income		-		-
Reconciling item (1)		(843)		(1,176)
Consolidated net loss attributable to General Steel Holdings, Inc.	$	(11,019)	$	(39,818)

Depreciation, amortization and depletion:	2014		2013
Longmen Joint Venture	$	22,778	$	20,850
Maoming Hengda		158		315
Baotou Steel		59		26
General Steel (China) & Tianwu Joint Venture		447		518
Consolidated depreciation, amortization and depletion	$	23,442	$	21,709

Finance/interest expenses:	2014		2013
Longmen Joint Venture	$	25,131	$	18,243
Maoming Hengda		-		-
Baotou Steel		(1)		-
General Steel (China) & Tianwu Joint Venture		1,488		2,972
Interdivision interest expenses		-		-
Reconciling item (1)		1		1
Consolidated interest expenses	$	26,619	$	21,216

Capital expenditures:	2014		2013
Longmen Joint Venture	$	55,852	$	27,922
Maoming Hengda		-		-
Baotou Steel		-		1
General Steel (China) & Tianwu Joint Venture		-		2
Reconciling item (1)		-		-
Consolidated capital expenditures	$	55,852	$	27,925

The following represents the results of division operations for the six months ended June 30, 2014 and 2013:

(In thousands)
Sales:	2014		2013
Longmen Joint Venture	$	1,181,328	$	1,297,489
Maoming Hengda		251		2,872
Baotou Steel Pipe Joint Venture		645		981
General Steel (China) & Tianwu Joint Venture		53		54,180
Total sales		1,182,277		1,355,522
Interdivision sales		(53)		(50,580)
Consolidated sales	$	1,182,224	$	1,304,942

Gross profit (loss):	2014		2013
Longmen Joint Venture	$	6,010	$	(31,826)
Maoming Hengda		45		245
Baotou Steel		(20)		89
General Steel (China) & Tianwu Joint Venture		(502)		23
Total gross profit (loss)		5,533		(31,469)
Interdivision gross profit		-		-
Consolidated gross profit (loss)	$	5,533	$	(31,469)

Loss from operations:	2014		2013
Longmen Joint Venture	$	(31,166)	$	(9,747)
Maoming Hengda		(576)		(1,022)
Baotou Steel		(177)		(305)
General Steel (China) & Tianwu Joint Venture		(3,286)		(1,598)
Total loss from operations		(35,205)		(12,672)
Interdivision loss from operations		-		-
Reconciling item (1)		(2,133)		(2,327)
Consolidated loss from operations	$	(37,338)	$	(14,999)

Net loss attributable to General Steel Holdings, Inc.:	2014		2013
Longmen Joint Venture	$	(46,111)	$	(26,619)
Maoming Hengda		(660)		(987)
Baotou Steel		(141)		(243)
General Steel (China) & Tianwu Joint Venture		(5,713)		(6,684)
Total net loss attributable to General Steel Holdings, Inc.		(52,625)		(34,533)
Interdivision net income (loss)		-		-
Reconciling item (1)		(1,958)		(2,182)
Consolidated net loss attributable to General Steel Holdings, Inc.	$	(54,583)	$	(36,715)

Depreciation, amortization and depletion:	2014		2013
Longmen Joint Venture	$	46,308	$	41,281
Maoming Hengda		462		626
Baotou Steel		121		123
General Steel (China) & Tianwu Joint Venture		897		1,037
Consolidated depreciation, amortization and depletion	$	47,788	$	43,067

Finance/interest expenses:	2014		2013
Longmen Joint Venture	$	52,121	$	40,393
Maoming Hengda		-		-
Baotou Steel		-		-
General Steel (China) & Tianwu Joint Venture		3,097		5,678
Interdivision interest expenses		-		-
Reconciling item (1)		96		2
Consolidated interest expenses	$	55,314	$	46,073

Capital expenditures:	2014		2013
Longmen Joint Venture	$	112,599	$	44,006
Maoming Hengda		32		2
Baotou Steel		-		8
General Steel (China) & Tianwu Joint Venture		82		3
Reconciling item (1)		-		-
Consolidated capital expenditures	$	112,713	$	44,019

Total Assets as of:	June 30, 2014		December 31, 2013
Longmen Joint Venture	$	2,349,913	$	2,573,212
Maoming Hengda		27,786		29,211
Baotou Steel Pipe Joint Venture		3,290		4,448
General Steel (China) & Tianwu Joint Venture		200,665		121,883
Interdivision assets		(33,208)		(34,213)
Reconciling item (2)		8,028		5,817
Total Assets	$	2,556,474	$	2,700,358

(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 six months ended June 30, 2014 and 2013.

(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 June 30, 2014 and December 31, 2013.

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Commitment and contingencies (Details 1) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
Commitment And Contingencies [Line Items]
Guarantor Obligations, Current Carrying Value	$ 265,444
Line of credit [Member]
Commitment And Contingencies [Line Items]
Guarantor Obligations, Current Carrying Value	153,563
Guaranty Obligations, Guaranty Due Date	Various from July 2014 to August 2015
Three-party financing agreements [Member]
Commitment And Contingencies [Line Items]
Guarantor Obligations, Current Carrying Value	19,500
Guaranty Obligations, Guaranty Due Date	Various from July 2014 to May 2015
Confirming storage [Member]
Commitment And Contingencies [Line Items]
Guarantor Obligations, Current Carrying Value	52,975
Guaranty Obligations, Guaranty Due Date	Various from August 2014 to April 2015
Financing by the rights of goods delivery in future [Member]
Commitment And Contingencies [Line Items]
Guarantor Obligations, Current Carrying Value	$ 39,406
Guaranty Obligations, Guaranty Due Date	Various from July to October 2014

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (86,138)	$ (53,253)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Depreciation, amortization and depletion	47,788	43,067
Change in fair value of derivative liabilities - warrants	0	(1)
Change in fair value of profit sharing liability	2,969	(56,273)
(Gain) loss on disposal of equipment and intangible assets	96	(96)
Provision for doubtful accounts	(250)	(169)
Reservation of mine maintenance fee	278	215
Stock issued for services and compensation	219	480
Amortization of deferred financing cost on capital lease	9,253	10,217
Income from equity investments	(67)	(90)
Foreign currency transaction (gain) loss	1,817	(126)
Deferred lease income	(1,088)	(1,071)
Changes in operating assets and liabilities
Notes receivable	45,931	(64,424)
Accounts receivable	(1,008)	(33,951)
Accounts receivable - related parties	(2,875)	8,969
Other receivables	(307)	(857)
Other receivables - related parties	(4,275)	10,275
Inventories	1,286	38,014
Advances on inventory purchases	(13,968)	23,215
Advances on inventory purchases - related parties	(36,971)	(48,019)
Prepaid expense and other	(1,947)	(1,115)
Long-term deferred expense	111	317
Prepaid taxes	15,747	2,742
Accounts payable	(18,050)	43,122
Accounts payable - related parties	28,204	55,227
Other payables and accrued liabilities	2,637	5,002
Other payables - related parties	4,824	(16,987)
Customer deposits	49,187	(6,103)
Customer deposits - related parties	78,667	(14,502)
Taxes payable	(413)	(6,639)
Other noncurrent liabilities	0	1,378
Net cash provided by (used in) operating activities	121,657	(61,436)
CASH FLOWS FROM INVESTING ACTIVITIES:
Restricted cash	(51,820)	(49,988)
Cash proceeds from short term investment	0	80
Cash proceeds from sales of equipments and intangible assets	24	16
Equipment purchase and intangible assets	(112,713)	(52,350)
Net cash used in investing activities	(164,509)	(102,242)
CASH FLOWS FINANCING ACTIVITIES:
Restricted notes receivable	286,485	244,940
Borrowings on short term notes payable	900,202	812,577
Payments on short term notes payable	(1,035,408)	(1,001,301)
Borrowings on short term loans - bank	185,023	141,484
Payments on short term loans - bank	(285,100)	(83,433)
Borrowings on short term loan - others	19,949	47,903
Payments on short term loans - others	(25,417)	(47,055)
Borrowings on short term loan - related parties	32,576	213,576
Payments on short term loans - related parties	(19,233)	(124,059)
Deposits due to sales representatives	(2,736)	(3,734)
Deposit due to sales representatives - related parties	(326)	529
Payments on long-term loans - related party	0	(17,544)
Net cash provided by financing activities	56,015	183,883
EFFECTS OF EXCHANGE RATE CHANGE IN CASH	(381)	1,199
INCREASE IN CASH	12,782	21,404
CASH, beginning of period	31,967	46,467
CASH, end of period	$ 44,749	$ 67,871

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Related party transactions and balances (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Related Party Transaction [Line Items]
Machinery	$ 625,196	$ 623,895
Less: accumulated depreciation	(92,037)	(77,086)
Carrying value of leased assets	533,159	546,809
Shaanxi Coal and Shaanxi Steel [Member]
Related Party Transaction [Line Items]
Machinery	601,398	605,839
Less: accumulated depreciation	(90,460)	(76,740)
Carrying value of leased assets	$ 510,938	$ 529,099

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Inventories

6 Months Ended

Jun. 30, 2014

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

Note 5 – Inventories

Inventories consist of the following:

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Supplies	$	23,451	$	21,040
Raw materials		147,780		164,301
Finished goods		47,713		42,977
Less: allowance for inventory valuation		(9,973)		(15,397)
Total inventories	$	208,971	$	212,921

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 June 30, 2014 and December 31, 2013, the Company had provided allowance for inventory valuation in the amounts of $10.0 million and $15.4 million, respectively.

Changes in the allowance for inventory valuation are as follows:

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Beginning balance	$	15,397	$	9,585
Addition		9,996		15,194
Less: write-off		(15,319)		(9,757)
Exchange rate effect		(101)		375
Ending balance	$	9,973	$	15,397

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Loans receivable - related parties (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Loans Receivable Related Parties [Line Items]
Interest Income Related Party	$ 0.05	$ 0.07	$ 0.10	$ 0.10
Teamlink Investment Co Ltd [Member]
Loans Receivable Related Parties [Line Items]
Loans Receivable Maturity Date			due in June, July and December 2014
Loans Receivable Interest Rate Stated Percentage	4.75%		4.75%

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Capital lease obligations (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
2015	$ 7,567
2016	5,804
2017	181,884
2018	33,280
2019	30,108
Thereafter	338,666
Total minimum lease payments	597,309
Less: amounts representing interest	(206,036)
Ending balance	$ 391,273

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Commitment and contingencies (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014
Commitment And Contingencies [Line Items]
2015	$ 1,055
2016	566
2017	566
2018	566
2019	566
Years after	19,849
Total minimum payments required	$ 23,168

XML

Intangible assets, net (Details 1) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014
Finite-Lived Intangible Assets [Line Items]
Estimated amortization and depletion expenses, june 30, 2015	$ 1,024
Estimated amortization and depletion expenses, june 30, 2016	1,024
Estimated amortization and depletion expenses, june 30, 2017	1,024
Estimated amortization and depletion expenses, june 30, 2018	1,024
Estimated amortization and depletion expenses, june 30, 2019	1,024
Thereafter	18,213
Total	23,333
Gross carrying amount, june 30, 2015	22,309
Gross carrying amount, june 30, 2016	21,285
Gross carrying amount, june 30, 2017	20,261
Gross carrying amount,june 30, 2018	19,237
Gross carrying amount, june 30, 2019	18,213
Thereafter	$ 0

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Segments

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Note 22 – 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 the results of division operations for the three months ended June 30, 2014 and 2013:

(In thousands)
Sales:	2014		2013
Longmen Joint Venture	$	587,314	$	650,741
Maoming Hengda		215		1,349
Baotou Steel Pipe Joint Venture		483		972
General Steel (China) & Tianwu Joint Venture		-		5,454
Total sales		588,012		658,516
Interdivision sales		1		(4,865)
Consolidated sales	$	588,013	$	653,651

Gross profit (loss):	2014		2013
Longmen Joint Venture	$	28,229	$	(36,193)
Maoming Hengda		21		473
Baotou Steel		3		167
General Steel (China) & Tianwu Joint Venture		(159)		17
Total gross profit (loss)		28,094		(35,536)
Interdivision gross profit		-		-
Consolidated gross profit (loss)	$	28,094	$	(35,536)

Income (loss) from operations:	2014		2013
Longmen Joint Venture	$	8,128	$	(44,684)
Maoming Hengda		(54)		(225)
Baotou Steel		(133)		55
General Steel (China) & Tianwu Joint Venture		(720)		(790)
Total income (loss) from operations		7,221		(45,644)
Interdivision income (loss) from operations		-		-
Reconciling item (1)		(896)		(1,246)
Consolidated income (loss) from operations	$	6,325	$	(46,890)

Net income (loss) attributable to General Steel Holdings, Inc.:	2014		2013
Longmen Joint Venture	$	(8,077)	$	(34,944)
Maoming Hengda		(123)		(216)
Baotou Steel		(106)		46
General Steel (China) & Tianwu Joint Venture		(1,870)		(3,528)
Total net loss attributable to General Steel Holdings, Inc.		(10,176)		(38,642)
Interdivision net income		-		-
Reconciling item (1)		(843)		(1,176)
Consolidated net loss attributable to General Steel Holdings, Inc.	$	(11,019)	$	(39,818)

Depreciation, amortization and depletion:	2014		2013
Longmen Joint Venture	$	22,778	$	20,850
Maoming Hengda		158		315
Baotou Steel		59		26
General Steel (China) & Tianwu Joint Venture		447		518
Consolidated depreciation, amortization and depletion	$	23,442	$	21,709

Finance/interest expenses:	2014		2013
Longmen Joint Venture	$	25,131	$	18,243
Maoming Hengda		-		-
Baotou Steel		(1)		-
General Steel (China) & Tianwu Joint Venture		1,488		2,972
Interdivision interest expenses		-		-
Reconciling item (1)		1		1
Consolidated interest expenses	$	26,619	$	21,216

Capital expenditures:	2014		2013
Longmen Joint Venture	$	55,852	$	27,922
Maoming Hengda		-		-
Baotou Steel		-		1
General Steel (China) & Tianwu Joint Venture		-		2
Reconciling item (1)		-		-
Consolidated capital expenditures	$	55,852	$	27,925

The following represents the results of division operations for the six months ended June 30, 2014 and 2013:

(In thousands)
Sales:	2014		2013
Longmen Joint Venture	$	1,181,328	$	1,297,489
Maoming Hengda		251		2,872
Baotou Steel Pipe Joint Venture		645		981
General Steel (China) & Tianwu Joint Venture		53		54,180
Total sales		1,182,277		1,355,522
Interdivision sales		(53)		(50,580)
Consolidated sales	$	1,182,224	$	1,304,942

Gross profit (loss):	2014		2013
Longmen Joint Venture	$	6,010	$	(31,826)
Maoming Hengda		45		245
Baotou Steel		(20)		89
General Steel (China) & Tianwu Joint Venture		(502)		23
Total gross profit (loss)		5,533		(31,469)
Interdivision gross profit		-		-
Consolidated gross profit (loss)	$	5,533	$	(31,469)

Loss from operations:	2014		2013
Longmen Joint Venture	$	(31,166)	$	(9,747)
Maoming Hengda		(576)		(1,022)
Baotou Steel		(177)		(305)
General Steel (China) & Tianwu Joint Venture		(3,286)		(1,598)
Total loss from operations		(35,205)		(12,672)
Interdivision loss from operations		-		-
Reconciling item (1)		(2,133)		(2,327)
Consolidated loss from operations	$	(37,338)	$	(14,999)

Net loss attributable to General Steel Holdings, Inc.:	2014		2013
Longmen Joint Venture	$	(46,111)	$	(26,619)
Maoming Hengda		(660)		(987)
Baotou Steel		(141)		(243)
General Steel (China) & Tianwu Joint Venture		(5,713)		(6,684)
Total net loss attributable to General Steel Holdings, Inc.		(52,625)		(34,533)
Interdivision net income (loss)		-		-
Reconciling item (1)		(1,958)		(2,182)
Consolidated net loss attributable to General Steel Holdings, Inc.	$	(54,583)	$	(36,715)

Depreciation, amortization and depletion:	2014		2013
Longmen Joint Venture	$	46,308	$	41,281
Maoming Hengda		462		626
Baotou Steel		121		123
General Steel (China) & Tianwu Joint Venture		897		1,037
Consolidated depreciation, amortization and depletion	$	47,788	$	43,067

Finance/interest expenses:	2014		2013
Longmen Joint Venture	$	52,121	$	40,393
Maoming Hengda		-		-
Baotou Steel		-		-
General Steel (China) & Tianwu Joint Venture		3,097		5,678
Interdivision interest expenses		-		-
Reconciling item (1)		96		2
Consolidated interest expenses	$	55,314	$	46,073

Capital expenditures:	2014		2013
Longmen Joint Venture	$	112,599	$	44,006
Maoming Hengda		32		2
Baotou Steel		-		8
General Steel (China) & Tianwu Joint Venture		82		3
Reconciling item (1)		-		-
Consolidated capital expenditures	$	112,713	$	44,019

Total Assets as of:	June 30, 2014		December 31, 2013
Longmen Joint Venture	$	2,349,913	$	2,573,212
Maoming Hengda		27,786		29,211
Baotou Steel Pipe Joint Venture		3,290		4,448
General Steel (China) & Tianwu Joint Venture		200,665		121,883
Interdivision assets		(33,208)		(34,213)
Reconciling item (2)		8,028		5,817
Total Assets	$	2,556,474	$	2,700,358

(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 six months ended June 30, 2014 and 2013.

(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 June 30, 2014 and December 31, 2013.

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Debt (Details 3) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Debt Instrument [Line Items]
Short term loans - related parties	$ 153,996	$ 126,693
General Steel China Loans From Yangpu Capital Automobile [Member]
Debt Instrument [Line Items]
Short term loans - related parties	1,446	1,458
Longmen Joint Venture Loan from Shaanxi Coal and Chemical Industry Group Co Ltd [Member]
Debt Instrument [Line Items]
Short term loans - related parties	8,822	28,216
Longmen Joint Venture Loan From Shaanxi Steel Group [Member]
Debt Instrument [Line Items]
Short term loans - related parties	81,250	49,110
Longmen Joint Venture Loans From Financing Sales [Member]
Debt Instrument [Line Items]
Short term loans - related parties	$ 62,478	$ 47,909

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Taxes (Tables)

6 Months Ended

Jun. 30, 2014

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 and six months ended June 30, 2014 and 2013 are as follows: 

(In thousands)	Three months ended June 30, 2014		Three months ended June 30, 2013
Current	$	107	$	105
Deferred		-		-
Total provision for income taxes	$	107	$	105

(In thousands)	Six months ended June 30, 2014		Six months ended June 30, 2013
Current	$	112	$	176
Deferred		-		-
Total provision for income taxes	$	112	$	176

Summary of Valuation Allowance [Table Text Block]

Movement of valuation allowance:

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
Beginning balance	$	97,569	$	72,891
Current period addition		4,194		23,293
Current period reversal		(55)		(1,206)
Exchange difference		(726)		2,591
Ending balance	$	100,982	$	97,569

Schedule Of Taxes Payable [Table Text Block]

Taxes payable consisted of the following: 

	June 30, 2014		December 31, 2013
	(in thousands)		(in thousands)
VAT taxes payable	$	2,496	$	2,211
Income taxes payable		185		173
Other taxes		1,500		2,244
Totals	$	4,181	$	4,628

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Capital lease obligations

6 Months Ended

Jun. 30, 2014

Leases, Capital [Abstract]

Capital Leases in Financial Statements of Lessee Disclosure [Text Block]

Note 15 - Capital lease obligations

Iron and steel production facilities

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 of $2.3 million (RMB 14.6 million), based on Shaanxi Steel’s cost to construct the assets, 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 February 2014, Shaanxi Steel agreed that it will not demand capital lease payments from Longmen Joint Venture until February 2017. The profit sharing component does not meet the definition of contingent rent because it is based on future revenue and was therefore considered part of the financing for the capital leased assets. The initial fair value of the profit sharing liability was included in determining the value of the leased assets at inception. The profit sharing liability is accounted for separately from the monthly lease payments and is accounted for as a derivative liability at fair value, with changes in the fair value charged or credited to income each period. See Note 2(h) – “Financial instruments” and Note 16 – “Profit sharing liability”.

Energy-saving equipment

During 2013 and 2014, the Company’s subsidiary, Longmen Joint Venture, entered into capital lease agreements for energy-saving equipment to be installed throughout the production chain. Under these agreements, Longmen Joint Venture uses the energy-saving equipment for which the vendors are responsible for the design, purchase, installation, and on-site testing, as well as the ownership rights to the equipment during the lease periods. The lease periods, which vary between four to six years, begin upon the completion of the equipment installation, testing, and the issuance of the energy-saving rate reports to be agreed upon by both the vendors and Longmen Joint Venture. As the ownership rights of the equipment transfer to Longmen Joint Venture at the end of the lease periods, these agreements are accounted for as capital leases.

The minimum lease payments are based on the energy cost saved during the lease periods, which is determined by the estimated annual equipment operating hours per the lease agreements. If the actual annual equipment operating hours are less than the estimated amount, the lease periods may be extended, subject to further negotiation and agreement between the Company and the vendors. If the actual annual equipment operating hours exceed the estimated amount, the Company is obligated to make additional lease payments based on the additional energy cost saved during the lease period and will recognize the additional lease payments as contingent rent expense. For the three and six months ended June 30, 2014 and 2013, no contingent rent expense was incurred under these lease agreements.

Presented below is a schedule of estimated minimum lease payments on the capital lease obligations for the next five years as of June 30, 2014:

Year ending June 30,	Capital Lease Obligations Minimum Lease Payments
	(in thousands)
2015	$	7,567
2016		5,804
2017		181,884
2018		33,280
2019		30,108
Thereafter		338,666
Total minimum lease payments		597,309
Less: amounts representing interest		(206,036)
Ending balance	$	391,273

The above amounts do not include the profit sharing liability, which is accounted for separately as a derivative instrument at fair value.

Interest expense for the three months ended June 30, 2014 and 2013 on the capital lease obligations was $5.7 million and $5.1 million, respectively.

Interest expense for the six months ended June 30, 2014 and 2013 on the capital lease obligations was $10.8 million and $10.2 million, respectively.

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Related party transactions and balances (Details 13) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Related Party Transaction [Line Items]
Long-term loans - related party	$ 9,750	$ 19,644
Shaanxi Steel [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Majority shareholder of Long Steel Group
Long-term loans - related party	$ 9,750	$ 19,644