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 March 31, 2015

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  ¨	Smaller reporting company x
		(Do not check if a smaller reporting company)

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 May 14, 2015, 62,486,282 (excluding 2,472,306 shares of treasury stock) shares of common stock, par value $0.001 per share, were outstanding.

Table of Contents

		Page
Part I.  FINANCIAL INFORMATION		3
Item 1.	Unaudited Financial Statements.	3
	Condensed Consolidated Balance Sheets as of March 31, 2015 and December 31, 2014.	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2015 and 2014.	4
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2015 and 2014.	5
	Notes to Condensed Consolidated Financial Statements.	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	39
Item 4.	Controls and Procedures.	58
Part II. OTHER INFORMATION		59
Item 1.	Legal Proceedings.	59
Item 1A.	Risk Factors.	59
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	59
Item 6.	Exhibits.	60
Signatures		61

2

PART I – FINANCIAL INFORMATION

ITEM 1. UNAUDITED FINANCIAL STATEMENTS

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(In thousands)

	March 31,			December 31,
	2015			2014
ASSETS
CURRENT ASSETS:
Cash	$	9,736		$	11,641
Restricted cash		249,820			355,685
Notes receivable		1,606			10,290
Restricted notes receivable		80,889			111,801
Loans receivable		42,569			36,001
Loans receivable - related party		6,728			34,713
Accounts receivable, net		10,686			9,321
Accounts receivable - related parties, net		59,057			8,498
Other receivables, net		103,291			63,746
Other receivables - related parties, net		23,079			39,670
Inventories		148,295			156,327
Advances on inventory purchase, net		49,440			73,819
Advances on inventory purchase - related parties		95,757			45,617
Prepaid expense and other		5,279			4,803
Prepaid taxes		5,851			5,789
Short-term investment		7,503			2,688
TOTAL CURRENT ASSETS		899,586			970,409
PLANT AND EQUIPMENT, net		1,561,511			1,543,136
OTHER ASSETS:
Advances on equipment purchase		5,270			11,438
Investment in unconsolidated entities		16,705			16,823
Long-term deferred expense		452			458
Intangible assets, net of accumulated amortization		22,885			22,960
TOTAL OTHER ASSETS		45,312			51,679
TOTAL ASSETS	$	2,506,409		$	2,565,224
LIABILITIES AND DEFICIENCY
CURRENT LIABILITIES:
Short term notes payable	$	448,362		$	661,635
Accounts payable		608,678			612,801
Accounts payable - related parties		226,964			207,783
Short term loans - banks		232,148			257,502
Short term loans - others		51,995			60,717
Short term loans - related parties		217,397			46,380
Other payables and accrued liabilities		51,985			55,488
Other payables - related parties		96,277			87,252
Customer deposits		139,106			92,974
Customer deposits - related parties		148,176			132,616
Deposit due to sales representatives		19,361			17,871
Deposit due to sales representatives - related parties		2,553			2,509
Taxes payable		9,393			5,201
Deferred lease income, current		2,179			2,176
Capital lease obligations, current		8,678			8,508
TOTAL CURRENT LIABILITIES		2,263,252			2,251,413
NON-CURRENT LIABILITIES:
Long-term loans - related party		352,850			339,549
Deferred lease income, noncurrent		72,258			72,713
Capital lease obligations, noncurrent		397,416			393,252
Profit sharing liability at fair value		57,538			70,422
TOTAL NON-CURRENT LIABILITIES		880,062			875,936
TOTAL LIABILITIES		3,143,314			3,127,349
COMMITMENTS AND CONTINGENCIES
DEFICIENCY:
Preferred stock, $0.001 par value, 50,000,000 shares authorized, 3,092,899 shares issued and outstanding as of March 31, 2015 and December 31, 2014		3			3
Common stock, $0.001 par value, 200,000,000 shares authorized, 64,458,588 shares issued and 61,986,282 shares outstanding as of March 31, 2015 and December 31, 2014, respectively		64			64
Treasury stock, at cost, 2,472,306 shares as of March 31, 2015 and December 31, 2014		(4,199	)		(4,199	)
Paid-in-capital		115,563			115,494
Statutory reserves		6,539			6,472
Accumulated deficits		(508,674	)		(463,521	)
Accumulated other comprehensive income		163			644
TOTAL GENERAL STEEL HOLDINGS, INC. DEFICIENCY		(390,541	)		(345,043	)
NONCONTROLLING INTERESTS		(246,364	)		(217,082	)
TOTAL DEFICIENCY		(636,905	)		(562,125	)
TOTAL LIABILITIES AND DEFICIENCY	$	2,506,409		$	2,565,224

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

FOR THE THREE MONTHS ENDED MARCH 31, 2015 AND 2014

(UNAUDITED)

(In thousands, except per share data)

	2015			2014
SALES	$	270,769		$	512,005
SALES - RELATED PARTIES		57,395			82,206
TOTAL SALES		328,164			594,211
COST OF GOODS SOLD		297,565			530,744
COST OF GOODS SOLD - RELATED PARTIES		62,746			86,028
TOTAL COST OF GOODS SOLD		360,311			616,772
GROSS LOSS		(32,147	)		(22,561	)
SELLING, GENERAL AND  ADMINISTRATIVE EXPENSES		(17,355	)		(21,053	)
UNALLOCATED OVERHEADS EXPENSES		(19,134	)		-
CHANGE IN FAIR VALUE OF PROFIT SHARING LIABILITY		12,924			(49	)
LOSS FROM OPERATIONS		(55,712	)		(43,663	)
OTHER INCOME (EXPENSE)
Interest income		2,331			3,192
Finance/interest expense		(20,570	)		(28,695	)
Gain on disposal of equipment and intangible assets		16			46
(Loss) income from equity investments		(37	)		13
Foreign currency transaction loss		(873	)		(854	)
Lease income		543			546
Other non-operating income (expense), net		223			(176	)
Other expense, net		(18,367	)		(25,928	)
LOSS BEFORE PROVISION FOR INCOME TAXES AND NONCONTROLLING INTEREST		(74,079	)		(69,591	)
PROVISION FOR INCOME TAXES		30			5
NET LOSS		(74,109	)		(69,596	)
Less: Net loss attributable to noncontrolling interest		(28,956	)		(26,032	)
NET LOSS ATTRIBUTABLE TO GENERAL STEEL HOLDINGS, INC.	$	(45,153	)	$	(43,564	)
NET LOSS	$	(74,109	)	$	(69,596	)
OTHER COMPREHENSIVE LOSS
Foreign currency translation adjustments		(853	)		4,670
COMPREHENSIVE LOSS		(74,962	)		(64,926	)
Less: Comprehensive loss attributable to noncontrolling interest		(29,328	)		(24,226	)
COMPREHENSIVE LOSS ATTRIBUTABLE TO GENERAL STEEL HOLDINGS, INC.	$	(45,634	)	$	(40,700	)
WEIGHTED AVERAGE NUMBER OF SHARES
Basic and Diluted		61,986			55,813
LOSS PER SHARE
Basic and Diluted	$	(0.73	)	$	(0.78	)

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 THREE MONTHS ENDED MARCH 31, 2015 AND 2014

(UNAUDITED)

(In thousands)

	2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(74,109	)	$	(69,596	)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Depreciation, amortization and depletion		25,164			24,346
Change in fair value of profit sharing liability		(12,924	)		49
Gain on disposal of equipment and intangible assets		(16	)		(46	)
Provision (recovery) of doubtful accounts		1,279			(251	)
Reservation of mine maintenance fee		113			242
Stock issued for services and compensation		69			150
Amortization of deferred financing cost on capital lease		4,966			5,086
(Loss) income from equity investments		37			(13	)
Foreign currency transaction loss		873			854
Deferred lease income		(543	)		(546	)
Changes in operating assets and liabilities
Notes receivable		32,504			(70,354	)
Accounts receivable		(1,373	)		(102	)
Accounts receivable - related parties		(50,361	)		(1,569	)
Other receivables		(40,476	)		355
Other receivables - related parties		16,577			(4,219	)
Inventories		7,327			(730	)
Advances on inventory purchases		24,380			176
Advances on inventory purchases - related parties		(55,767	)		(38,419	)
Prepaid expense and other		(468	)		(516	)
Long-term deferred expense		7			56
Prepaid taxes		(54	)		4,963
Accounts payable		(7,706	)		59,351
Accounts payable - related parties		18,856			16,986
Other payables and accrued liabilities		(3,625	)		15,300
Other payables - related parties		8,960			(12,676	)
Customer deposits		45,848			20,043
Customer deposits - related parties		15,341			113,895
Taxes payable		4,171			2,708
Net cash (used in) provided by operating activities		(40,950	)		65,523
CASH FLOWS FROM INVESTING ACTIVITIES:
Restricted cash		105,911			(32,943	)
Loans to unrelated parties		(6,500	)		-
Repayments from related parties		33,791			-
Cash proceeds from short term investment		81			164
Payments for short term investment		(4,875	)		-
Cash proceeds from sales of equipment and intangible assets		-			24
Equipment purchase and intangible assets		(31,589	)		(56,861	)
Net cash provided by (used in) investing activities		96,819			(89,616	)
CASH FLOWS FINANCING ACTIVITIES:
Restricted notes receivable		30,934			131,971
Borrowings on short term notes payable		96,525			439,342
Payments on short term notes payable		(309,823	)		(485,455	)
Borrowings on short term loans - bank		61,023			95,120
Payments on short term loans - bank		(87,471	)		(165,711	)
Borrowings on short term loan - others		74,517			9,853
Payments on short term loans - others		(54,275	)		(14,426	)
Borrowings on short term loan - related parties		75,641			24,528
Payments on short term loans - related parties		(569	)		(5,849	)
Deposits due to sales representatives		1,462			(425	)
Deposits due to sales representatives - related parties		41			-
Borrowings on long-term loans - related party		56,063			-
Payments on long-term loans - related party		(813	)		-
Principal payment on capital lease obligation		(1,074	)		-
Net cash (used in) provided by financing activities		(57,819	)		28,948
EFFECTS OF EXCHANGE RATE CHANGE IN CASH		45			(444	)
(DECREASE) INCREASE IN CASH		(1,905	)		4,411
CASH, beginning of period		11,641			31,967
CASH, end of period	$	9,736		$	36,378

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 m ² sintering machine, two 1,280 m ³ blast furnaces, two 120 ton converters and some auxiliary systems, are managed collectively as a single virtual asset pool (“Asset Pool”). Longmen Joint Venture manages the Asset Pool as the principal operating entity and is responsible for the daily operations of the new and existing facilities. The Agreement leverages each of the parties’ operating strengths, allowing 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 cumulative 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”, Note 15 “Capital lease obligations” and Note 16 “Profit sharing liability”.

In view of the near-term challenges for the steel sector (see Note 2(d) Liquidity and Going Concern), the Company strategically accelerating the Company’s business transformation. The Company’s transformation strategy is to pursue opportunities that offer compelling benefits to our organization and shareholders, including:

· First, strengthen the Company’s financials while providing the financial flexibility to pursue higher return, higher growth opportunities;

· Second, reduce the complexity of the Company’s business structure, which is consistent with the Company’s objectives for internal simplification and operating efficiency;

· Third, diversify operating risk in order to lower the Company’s high reliance on steel business, while at the same time leverage on the Company’s vast vertical resources in the steel industry; and

· Fourth, pursue opportunities for additional value creation.

6

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Company formed a joint venture, Tianjin General Shengyuan IoT Technology Co., Ltd. (“General Shengyuan IoT”), in February of 2015 with an RFID Expert team to develop and commercialize RFID technologies and data solutions. The formation of this joint venture represents a unique opportunity to accelerate the Company’s expansion into the vibrant logistics and Internet-of-Things sectors. General Shengyuan IoT is still in the development stage and no revenues and significant operating expenses during the three months ended March 31, 2015.

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 2014 annual report on Form 10-K filed on April 10, 2015.

(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	%
Tianjin General Shengyuan IoT Technology Co., Ltd. (“General Shengyuan”)	PRC		70.0	%
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	%

Baotou Steel

Prior to December 31, 2014, the Company held an 80.0% equity interest in Baotou Steel – General Steel Special Steel Pipe Joint Venture Co., Ltd. (“Baotou Steel”) through General Steel (China). On December 31, 2014, the Company sold its 80.0% equity interest in Baotou Steel to Tianjin Shuangjie Liansheng Rolled Steel Co., Ltd., an unrelated party for $0.7 million (RMB 4.0 million), receivable within one year of the sale. As a result of this transaction, the Company met the criteria under ASC 810-10-40-4 to deconsolidate Baotou Steel at disposal date and recognized a gain in accordance with ASC 810-10-40-5.

General Shengyuan

On February 13, 2015, the Company formed a joint venture entity, Tianjin General Shengyuan IoT Technology Co., Ltd, with a team of radio-frequency identification (“RFID”) experts (the “Expert Team”), to develop and commercialize RFID technology data solutions. Under the terms of the Agreement, the Company owned 70% of the joint venture by contributing $1.6 million (RMB 10.0 million), while the Expert Team committed to contribute intellectual property, including proprietary RFID technologies, licensed patents and domain expertise.

(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. 

7

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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(d) Liquidity and Going Concern.

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:

	March 31, 2015			December 31, 2014
	(in thousands)			(in thousands)
Current assets	$	726,110		$	837,135
Plant and equipment, net		1,557,027			1,537,687
Other noncurrent assets		27,024			33,396
Total assets		2,310,161			2,408,218
Total liabilities		(2,920,281	)		(2,946,126	)
Net liabilities	$	(610,120	)	$	(537,908	)

8

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

VIE and its subsidiaries’ liabilities consist of the following:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Current liabilities:
Short term notes payable	$	432,052	$	638,829
Accounts payable		596,221		605,025
Accounts payable - related parties		222,595		205,914
Short term loans - bank		191,536		216,940
Short term loans - others		45,795		54,524
Short term loans - related parties		209,553		45,710
Other payables and accrued liabilities		44,286		47,121
Other payables - related parties		69,890		78,615
Customer deposits		129,896		87,372
Customer deposits - related parties		43,654		34,895
Deposit due to sales representatives		19,361		17,871
Deposit due to sales representatives – related parties		2,553		2,509
Taxes payable		8,192		4,026
Deferred lease income		2,179		2,176
Capital lease obligations, current		8,678		8,508
Intercompany payable to be eliminated		13,778		20,155
Total current liabilities		2,040,219		2,070,190
Non-current liabilities:
Long term loans - related parties		352,850		339,549
Deferred lease income - noncurrent		72,258		72,713
Capital lease obligations, noncurrent		397,416		393,252
Profit sharing liability		57,538		70,422
Total non-current liabilities		880,062		875,936
Total liabilities of consolidated VIE	$	2,920,281	$	2,946,126

	Three months ended March 31, 2015			Three months ended March 31, 2014
	(in thousands)			(in thousands)
Sales	$	328,158		$	594,014
Gross loss	$	(32,147	)	$	(22,219	)
Loss from operations	$	(53,498	)	$	(39,294	)
Net loss attributable to controlling interest	$	(42,405	)	$	(38,034	)

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 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 March 31, 2015 and December 31, 2014 and for the three months ended March 31, 2015 and 2014, respectively.

9

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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 March 31, 2015 and December 31, 2014 and for the three months ended March 31, 2015 and 2014, 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 a majority voting rights in each entity, and thereby, the power of control, to Longmen Joint Venture.

(d) Liquidity and going concern

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

The steel business is capital intensive and as a normal industry practice in PRC, the Company is highly leveraged. Debt financing in the form of short term bank loans, loans from related parties, financing sales, bank acceptance notes, and capital leases have been utilized to finance the working capital requirements and the capital expenditures of the Company. As a result, the Company’s debt to equity ratio as of March 31, 2015 and December 31, 2014 were (4.9) and (5.6), respectively. As of March 31, 2015, the Company’s current liabilities exceed current assets (excluding non-cash item) by $1.4 billion, which together with the gross loss from operations raises substantial doubt about its ability to continue as a going concern.

Our steel business has faced very tough market conditions and challenging profitability over the last several years, and based on current trends, we think the near-term challenges for the steel sector will likely linger. In reaction to this challenging market, we are proactively reviewing our strategy and asset portfolio and seeking to restructure low-efficient, non-core assets, as well as idle land resources to unlock hidden fair value.

The Company aims to transform into a leaner and fitter organization with better profitability. As such, the Company is strategically accelerating its business transformation to pursue opportunities that offer compelling benefits to the Company and shareholders, including:

· First, strengthen the Company’s financials while providing the financial flexibility to pursue higher return, higher growth opportunities;

· Second, reduce the complexity of the Company’s business structure, which is consistent with our objectives for internal simplification and operating efficiency;

· Third, diversify operating risk in order to lower the Company’s high reliance on steel business, while at the same time leverage on the Company’s vast vertical resources in the steel industry; and

· Fourth, pursue opportunities for additional value creation.

Management has implemented the following plans that are intended to mitigate the conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern.

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

10

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Line of credit

The Company has lines of credit from the listed major banks totaling $142.0 million with expiration dates ranging from January 21, 2016 to October 14, 2016.

Banks	Amount of Line of Credit (in millions)		Repayment Date
China Everbright Bank		19.6	January 21, 2016*
Huaxia Bank		24.5	January 30, 2016*
Bank of Beijing		81.6	October 14, 2016
Bank of Xi’an		16.3	February 4, 2016*
Total	$	142.0

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

As of the date of this report, the Company utilized $39.5 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 $897.1 million with the following companies:

Company	Financing Period	Financing Amount (in millions)
Company A – related party	July 30, 2014 – July 30, 2019	$	244.7
Company B – third party	January 22, 2014 – January 22, 2017		163.1
Company C – third party	October 1, 2013 – March 31, 2016		489.3
Total		$	897.1

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 $244.7 million. Company B signed a three-year agreement with Longmen Joint Venture on January 22, 2014 to finance its coke purchases up to $163.1 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, the Company’s payables to Company A and Company B were approximately $77.6 million and $63.4 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 $489.3 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, the Company’s payable to Company C was approximately $16.2 million

Other financing

On April 22, 2014, April 23, 2014, and April 30, 2015, Longmen Joint Venture signed two-to-three-year payment extension agreements with Company D, E, F, G and H listed below. In total, Longmen Joint Venture can obtain $412.8 million in financial support from payment extensions granted by the following five companies:

11

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Company	Financing Period	Financing Amount (in millions)
Company D – related party	April 22, 2014 – April 22, 2017	$	81.6
Company E – related party	April 23, 2014 – April 23, 2017		86.4
Company F – related party	April 22, 2014 – April 22, 2017		81.6
Company G – related party	April 30, 2015 – April 30, 2018		81.6
Company H – related party	April 30, 2015 – April 30, 2018		81.6
Total		$	412.8

As of the date of this report, our payables to Company D, Company E, Company F, Company G, and Company H are approximately $8.3 million, $30.1 million, $42.7 million, $0, and $0.9 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 March 31, 2015, Longmen Joint Venture has collected a total amount of $21.9 million. Historically, this amount is quite stable and we do not expect a big fluctuation in this amount for the next twelve months from March 31, 2015 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 March 31, 2016. However, this opinion is based on the demand of the Company's products, economic conditions, the overcapacity issue in the steel industry and the Company's operating results not continuing to deteriorate and on our vendors and related parties being able to provide continued liquidity, as summarized below. The detailed breakdown of Longmen Joint Venture’s estimated cash flows items are listed below.

	Cash inflow (outflow) (in millions)
	For the twelve months ended March 31, 2016
Current liabilities over current assets (excluding deferred lease income) as of March 31, 2015 (unaudited)	$	(1,361.5	)
Projected cash financing and outflows:
Cash provided by line of credit from banks		142.0
Cash provided by vendor financing		897.1
Cash provided by other financing		412.8
Cash provided by sales representatives		21.9
Cash projected to be used in operations in the twelve months ended March 31, 2016		(39.3	)
Cash projected to be used for financing cost in the twelve months ended March 31, 2016		(46.2	)
Net projected change in cash for the twelve months ended March 31, 2016	$	26.8

(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 for property, plant and equipment, and potential losses on uncollectible receivables, allowance for inventory valuation, the interest rate used in the financing sales, the fair value of the assets recorded under capital lease and the present value of the net minimum lease payments of the capital lease. Actual results could differ from these estimates.

One of the Company’s most significant estimates is the determination of fair value of the profit sharing liability. Since the liability is calculated and largely based on management’s expectations of product demand, pricing, raw materials cost and projected manufacturing efficiencies, it is susceptible to material changes when actual results deviate from those expectations. While management believes its current assumptions are reasonable and achievable, there is no assurance that those future expectations will be met or that significant adjustments won’t be required in the future.

(f) Concentration of risks and uncertainties

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

12

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Through the quarterly ended March 31, 2015, the Company has incurred recurring losses from the Company’s operations from the last several years as the Company’s steel business has faced very tough market conditions and challenging profitability. Management has continued its effort to implementing cost savings on our manufacturing overhead costs and to reduce our unit production cost. The Company has forecasted its loss will be continued until year 2017 and expected to make a turning point and become profitable in year 2018 and beyond. The Company’s forecast is based on current market condition, if the future market condition is different from its forecast, the Company might continue to incur additional loss in 2018 and beyond and the Company’s assets pool of its long-lived assets may become impaired.

The Company has significant exposure to the price fluctuation of raw materials and energy prices as part of its normal operations. As of March 31, 2015 and December 31, 2014, the Company did not have any open commodity contracts to mitigate such risks.

Cash includes demand deposits in accounts maintained with banks within the PRC, Hong Kong and the United States. Total cash (including restricted cash balances) in these banks on March 31, 2015 and December 31, 2014 amounted to $259.6 million and $367.2 million, including $0.6 million and $1.0 million that were deposited in Shaanxi Coal and Chemical Industry Group Financial Co., Ltd., a related party, respectively. As of March 31, 2015, $0.01 million cash in the bank was covered by insurance. The Company has not experienced any losses in other bank accounts and believes it is not exposed to any risks on its cash in bank accounts.

Two of the Company’s customers individually accounted for 12.1% and 10.5% of total sales for the three months ended March 31, 2015, respectively. One customer individually accounted for 81.7% of total accounts receivable, including related parties as of March 31, 2015. None of the Company’s customers accounted for more than 10% of total sales for the three months ended March 31, 2014. Two customers individually accounted for 32.1% and 20.5% of total accounts receivable, including related parties as of December 31, 2014, respectively.

None of the Company’s suppliers individually accounted for more than 10% of the total purchases for the three months ended March 31, 2015 and one of the Company’s suppliers individually accounted for 15.4% of the total purchases for the three months ended March 31, 2014. None of the Company’s suppliers individually accounted for more than 10% of total accounts payable as March 31, 2015 and December 31, 2014.

(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 statement of operations accounts are translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statement of equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

Translation adjustments included in accumulated other comprehensive income amounted to $0.2 million and $0.6 million as of March 31, 2015 and December 31, 2014, respectively. The balance sheet amounts, with the exception of equity at March 31, 2015 and December 31, 2014 were translated at 6.13 RMB and 6.14 RMB to $1.00, respectively. The equity accounts were stated at their historical rate. The average translation rates applied to statement of operations accounts for the three months ended March 31, 2015 and 2014 were 6.15 RMB and 6.12 RMB, respectively. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheet.

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

(h) Financial instruments

The accounting 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 market rates available.

13

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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.

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 6.7%.

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. On November 22, 2014, the People’s Bank of China decreased standard bank borrowing rate across the board by 0.4%. Accordingly, the Company adjusted down the present value discount rate for profit sharing liability by 0.4% from 7.3% to 6.9%. On May 11, 2015, the People’s Bank of China decreased the standard bank borrowing rate again across the board by 0.25%. Accordingly, the Company adjusted down the present value discount rate for profit sharing liability by 0.25% from 6.9% to 6.7%.

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

The above assumptions were reviewed by the Company at March 31, 2015 and December 31, 2014 and the assumptions related to the projected growth in the steel market and costs were revised, resulting in a further reduction of the estimated profit sharing liability.

The major drivers of the change in our estimate were the continuing decrease in the selling price of our products as well as a continuing downtrend in the sluggish infrastructure investment and consumption growth for the next ten years or so. As such, as of December 31, 2014 financial statement issuance we had lowered our projected growth in the steel market for approximately ten years as compared to our previous estimates at December 31, 2013. The variables and the impact on our inputs to the 2014 valuation of profit sharing fair value, as compared to the 2013 valuation of the profit sharing fair value can be summarized as follows:

- Volume Inputs: The most recent 5 year China GDP forecast and Shaanxi GDP forecast decreased on average by 0.4% and 1.4% of GDP, respectively, versus the forecast used in 2013.

14

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

- Steel Sales Price Inputs: The most recent China Steel Association price index, together with our actual result decreased, on average, by 5.6% versus the same forecast used in 2013.

- Raw Material Cost Inputs: The most recent China Steel Association price index, together with the our actual result decreased, on average, by 4.7% versus the same forecast used in 2013

The above reduced our Gross Profit % over the next 5 years by, on average, 0.4% from the 2013 valuation. In addition, the above reduced our Gross Profit % over the remaining profit sharing period of 11.33 years by, on average, 1.75% from the 2013 valuation at December 31, 2014.

As a result of the changes in valuation inputs noted above for the year ended December 31, 2014, the Company recognized a gain on the change in the fair value of the profit sharing liability of $91.0 million due to a $110.6 million reduction in the fair value of profit sharing liability resulting from the change in estimates of future operating profits and a $0.1 million reduction resulting from the Asset Pool’s operating results for the year ended December 31, 2014 being slightly less favorable than previously estimated as of December 31, 2013, offset by a $8.1 million loss resulting from the 0.4% reduction of the present value discount rate and a $11.5 million loss from the present value discount.

For the three months ended March 31, 2015, the Company recognized a $12.9 million reduction in the fair value of profit sharing liability resulting from the change in estimates of future operating profits based on the April 2015 actual operating results and consideration for Chinese steel market trends in April 2015 as well as the May 11, 2015 change to the Borrowing Rate by 0.25%. These further recent changes in market conditions resulted in a decrease in the expected liability of $16.6 million primarily from adjustments to the 2015 and 2016 expected cash flows as well as a $2.5 million loss from the reduction in the present value discount rate of 0.25% and a $1.2 million loss from the present value discount. The estimated fair value of the profit sharing liability at March 31, 2015 is $57.5 million.

The variables and the impact on our inputs to the first quarter of 2015 valuation of profit sharing fair value, as compared to the 2014 valuation of the profit sharing fair value can be summarized as follows:

- Volume Inputs: the Company reduced our projected sales volume in 2015 by 3% versus the forecast used in 2014.

- Steel Sales Price Inputs: the Company reduced our projected selling price in 2015 by 12% versus the forecast used in 2014 and reduced our projected selling price in 2016 by 7% versus the forecast used in 2014.

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 borrowings rate used to discount the liability to a present value by 1.0% and other factors remained unchanged, our profit sharing liability as of March 31, 2015 would have been $66.2 million and we would increase the loss from the change in the fair value of the profit sharing liability by $8.7 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 March 31, 2015 would have been $53.1 million and we would increase the gain from the change in the fair value of the profit sharing liability by $4.4 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 March 31, 2015:

(in thousands)	Carrying Value as of March 31, 2015		Fair Value Measurements at March 31, 2015 Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Profit sharing liability	$	57,538	$	-	$	-	$	57,538
Total	$	57,538	$	-	$	-	$	57,538

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, 2014:

(in thousands)	Carrying Value as of December 31, 2014		Fair Value Measurements at December 31, 2014 Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Profit sharing liability	$	70,422	$	-	$	-	$	70,422
Total	$	70,422	$	-	$	-	$	70,422

15

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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 three months ended March 31, 2015 and for the year ended December 31, 2014:

	March 31, 2015			December 31, 2014
	(in thousands)			(in thousands)
Beginning balance	$	70,422		$	162,295
Change in fair value of profit sharing liability:
Change in preset value of estimate of future operating profits		(16,569	)		(110,589	)
Change in discount rate		2,454			8,106
Interest expense - present value discount amortization		1,220			11,544
Difference between the previously estimated operating results for the current period and actual results		-			(79	)
Exchange rate effect		11			(855	)
Ending balance	$	57,538		$	70,422

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 request for payment to the customer’s bank earlier than the scheduled payment date, but will incur an interest charge and a processing fee.

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

Interest expenses for early submission request of payment amounted to $8.0 million and $14.1 million for the three months ended March 31, 2015 and 2014, respectively.

(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 betterment to buildings and equipment are capitalized. Interest incurred during construction is capitalized into construction in progress. All other interest is expensed as incurred.

16

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

Due to the recurring losses in the Longmen Joint Venture’s operations, the Company has considered it is a triggering event that Longmen Joint Venture’s carrying amount may not be recoverable, to determine whether its carrying value has become impaired. The Company uses the undiscounted cash flow estimation approach for the purpose of performing a recoverability test which includes future cash inflows less associated cash outflows that are directly associated with and that are expected to arise as a direct result of the use and eventual disposition of the assets. For purposes of assessment, the long lived assets were grouped at the lowest level for which there is identifiable cash flows. The major groupings analyzed include Longmen Joint Venture, Maoming Hengda and General Steel (China). Further, our estimate of future cash flows includes estimated future cash flows necessary to maintain our existing production potential over the entire period and within the various groups. The projections are based on a best estimate approach as opposed to a probability weighted approach based on the likelihood of possible outcomes. When the Company identifies an impairment, the Company reduces the carrying amount of the asset to its estimated fair value based on a discounted cash flows method. As of March 31, 2015, the Company expects its long-lived assets to be fully recoverable (see Note 2(f.)).

(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 March 31, 2015, the Company expects these assets to be fully recoverable.

Land use rights

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

Long Steel Group contributed land use rights for a total amount of $24.2 million (RMB 148.3 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 on
	(in thousands)
General Steel (China)	$	3,870		2050 & 2053
Longmen Joint Venture	$	24,187		2048 & 2052
Maoming Hengda	$	2,706		2054

Mining right

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

17

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(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 March 31, 2015 and December 31, 2014.

Unconsolidated entities	Year acquired		March 31, 2015 Net investment (In thousands)		Owned %		December 31, 2014 Net investment (In thousands)		Owned %
Xi’an Delong Powder Engineering Materials Co., Ltd.		2007	$	1,014		24.1	$	1,153		24.1

The table below summarizes General Steel (China)’s investment holding (see Note 2(a) - Basis of presentation) as of March 31, 2015 and December 31, 2014.

Unconsolidated   entities	Year acquired		March 31, 2015 Net investment (In thousands)		Owned %		December 31, 2014 Net investment (In thousands)		Owned %
Tianwu General Steel Material Trading Co., Ltd.		2010	$	15,691		32.0	$	15,670		32.0

Total investment income (loss) in unconsolidated subsidiaries amounted to $(0.04) million and $0.01 million for the three months ended March 31, 2015 and 2014, respectively, which was included in “Income from equity investments” in the condensed consolidated statements of operations and comprehensive loss.

(m) Revenue recognition

Sales is 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 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 obligators, 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. Sales in trading transactions, which were netted against corresponding cost of goods sold, amounted to $107.7 million and $38.2 million for the three months ended March 31, 2015 and 2014, respectively. The net amount in gross loss amounted to $64,994 and $288,513 during the respective periods.

(n) Recently issued accounting pronouncements

In February 2015, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015-02, Amendments to the Consolidation Analysis. Under both current GAAP requirements and the amendments in this update, a decision maker is determined to be the primary beneficiary of a VIE if it satisfies both the power and the economics criteria. The primary beneficiary consolidates a VIE because it has a controlling financial interest. Under the requirements in current GAAP, if a fee arrangement paid to a decision maker, such as an asset management fee, is determined to be a variable interest in a VIE, the decision maker must include the fee arrangement in its primary beneficiary determination and could consolidate the VIE on the basis of power (decision-making authority) and economics (the fee arrangement). However, the amendments in this Update specify that some fees paid to a decision maker are excluded from the evaluation of the economics criterion if the fees are both customary and commensurate with the level of effort required for the services provided. Those amendments make it less likely for a decision maker to meet the economics criterion solely on the basis of a fee arrangement. The amendments in this update are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. Management is evaluating the impact that will arise from these Amendments.

In April 2015, the FASB issued authoritative guidance on accounting for Interest-Imputation of Interest (Subtopic 835-30); Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). This update requires that debt issuance cost related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts, without changing existing recognition and measurement guidance for debt issuance costs. The new guidance is required to be applied on a retrospective basis and to be accounted for as a change in an accounting principle. The amendments in this update are effective for financial statements issued for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years and early adoption of the amendments in this update is permitted. The Company will apply early adoption of this standard in the second quarter of 2015. The implementation of this standard will result in the reclassification of certain debt issuance costs from deferred financing cost to a reduction in the carrying amount of the related debt liability within the Company’s consolidated balance sheets.

18

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 3 – Loans receivable

Loans receivable, including to related parties represent amounts the Company expects to collect from unrelated and related parties upon maturity.

The Company had the following loan receivable due within one year as of:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Loan to unrelated party; due on demand; interest rate is 8.0%.	$	42,569	$	36,001

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

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Loan to Tianjin Hengying Trading Co., Ltd.; due on demand; interest rate is 10.0%.	$	622	$	13,997
Loan to Tianjin Dazhan Industry Co., Ltd.; due on demand; interest rate is 10.0%.		-		14,617
Loan to Beijing Shenghua Xinyuan Metal Materials Co., Ltd.; due on demand; interest rate is 10.0%.		6,106		6,099
Total loans receivable – related parties	$	6,728	$	34,713

See Note 19 “Related party transactions and balances” for the nature of the relationship of related parties.

Total interest income for the loans amounted to $0.5 million and $0.1 million for the three months ended March 31, 2015 and 2014, 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:  

	March 31, 2015			December 31, 2014
	(in thousands)			(in thousands)
Accounts receivable	$	11,194		$	9,804
Less: allowance for doubtful accounts		(508	)		(483	)
Accounts receivable – related parties		59,183			8,624
Less: allowance for doubtful accounts – related parties		(126	)		(126	)
Net accounts receivable	$	69,743		$	17,819

Movement of allowance for doubtful accounts is as follows:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Beginning balance	$	609	$	1,053
Charge to expense		25		368
Less: recovery		-		(8	)
Deconsolidation of Baotou Steel		-		(798	)
Exchange rate effect		-		(6	)
Ending balance	$	634	$	609

19

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 5 – Other receivables (including related parties), net 

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

	March 31, 2015			December 31, 2014
	(in thousands)			(in thousands)
Other receivables	$	114,761		$	73,944
Less: allowance for doubtful accounts		(11,470	)		(10,198	)
Other receivables – related parties		23,143			39,734
Less: allowance for doubtful accounts – related parties		(64	)		(64	)
Net other receivables	$	126,370		$	103,416

Movement of allowance for doubtful accounts, including related parties, is as follows:

	March 31, 2015			December 31, 2014
	(in thousands)			(in thousands)
Beginning balance	$	10,262		$	2,606
Charge to expense		1,260			7,670
Less: recovery		(5	)		(6	)
Exchange rate effect		17			(8	)
Ending balance	$	11,534		$	10,262

Note 6 – Inventories

Inventories consist of the following:

	March 31, 2015			December 31, 2014
	(in thousands)			(in thousands)
Supplies	$	17,327		$	18,838
Raw materials		100,509			143,563
Finished goods		43,086			12,301
Less: allowance for inventory valuation		(12,627	)		(18,375	)
Total inventories	$	148,295		$	156,327

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 March 31, 2015 and December 31, 2014, the Company had provided allowance for inventory valuation in the amounts of $12.6 million and $18.4 million, respectively.

Movement of allowance for inventory valuation is as follows:

	March 31, 2015			December 31, 2014
	(in thousands)			(in thousands)
Beginning balance		$ 18, 375		$	15,397
Addition		12,581			18,362
Less: write-off		(18,329	)		(15,311	)
Exchange rate effect		-			(73	)
Ending balance	$	12,627		$	18,375

20

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 7 – Advances on inventory purchases

Advances on inventory purchases, including related party, net of allowance for doubtful accounts consists of the following:  

	March 31, 2015			December 31, 2014
	(in thousands)			(in thousands)
Advances on inventory purchases	$	51,944		$	76,320
Less: allowance for doubtful accounts		(2,504	)		(2,501	)
Advances on inventory purchases – related parties		95,757			45,617
Net advances on inventory purchases	$	145,197		$	119,436

Movement of allowance for doubtful accounts, including related parties, is as follows:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Beginning balance	$	2,501	$	105
Charge to expense		-		2,395
Exchange rate effect		3		1
Ending balance	$	2,504	$	2,501

Note 8 – Plant and equipment, net

Plant and equipment consist of the following:

	March 31, 2015			December 31, 2014
	(in thousands)			(in thousands)
Buildings and improvements	$	437,477		$	279,776
Machinery		887,292			669,427
Machinery under capital lease		627,505			626,735
Transportation and other equipment		23,101			22,765
Construction in progress		9,835			342,660
Subtotal		1,985,210			1,941,363
Less: accumulated depreciation		(423,699	)		(398,227	)
Total	$	1,561,511		$	1,543,136

Construction in progress consisted of the following as of March 31, 2015:

Construction in progress	Value		Completion	Estimated additional cost to complete
description	(In thousands)		date	(In thousands)
Restructuring of ventilation system		2	December 2015		979
Energy management system		326	April 2015		1,925
Reconstruction of miscellaneous factory buildings		6,959	December 2015		7,023
Project materials		2,145			-
Others		403			-
Total	$	9,835		$	9,927

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, 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.

21

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

	March 31, 2015			December 31, 2014
	(in thousands)			(in thousands)
Machinery	$	627,505		$	626,735
Less: accumulated depreciation		(116,075	)		(107,782	)
Carrying value of leased assets	$	511,430		$	518,953

The Company assessed the recoverability of all of its remaining long lived assets at March 31, 2015 and December 31, 2014, respectively, and such assessment did not result in any impairment charges.

Depreciation expense for the three months ended March 31, 2015 and 2014 amounted to $24.9 million and $24.1 million, respectively. These amounts include depreciation of assets held under capital leases for the three months ended March 31, 2015 and 2014, which amounted to $8.1 million and $7.9 million, respectively (See Notes 2(j.) and 2(f.)).

Note 9 – Intangible assets, net

Intangible assets consist of the following:

	March 31, 2015			December 31, 2014
	(in thousands)			(in thousands)
Land use rights	$	30,763		$	30,726
Mining right		2,450			2,447
Software		1,059			1,058
Subtotal		34,272			34,231
Less:
Accumulated amortization – land use rights		(9,308	)		(9,127	)
Accumulated amortization – mining right		(1,339	)		(1,431	)
Accumulated amortization – software		(740	)		(713	)
Subtotal		(11,387	)		(11,271	)
Intangible assets, net	$	22,885		$	22,960

The gross amount of the intangible assets amounted to $34.3 million and $34.2 million as of March 31, 2015 and December 31, 2014, respectively. The remaining weighted average amortization period is 32.5 years as of March 31, 2015.

Total amortization expense for the three months ended March 31, 2015 and 2014 amounted to $0.2 million and $0.2 million, respectively.

Total depletion expense for the three months ended March 31, 2015 and 2014 amounted to $0.04 million and $0.01 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)
March 31, 2016	$	946		21,939
March 31, 2017		946		20,993
March 31, 2018		946		20,047
March 31, 2019		946		19,101
March 31, 2020		946		18,155
Thereafter		18,155		-
Total	$	22,885

22

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 10 – 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 $222.2 million and $339.4 million as of March 31, 2015 and December 31, 2014, respectively. Restricted notes receivable as a guarantee for the notes payable amounted to $1.6 million and $0 as of March 31, 2015 and December 31, 2014, respectively.

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

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
General Steel (China): Notes payable to various banks in China, due June 2015. Restricted cash required of $8.2 million and $14.7 million as of March 31, 2015 and December 31, 2014, respectively; guaranteed by third parties. These notes payable were either repaid or renewed subsequently on the due dates.	$	16,310	$	22,806
Longmen Joint Venture: Notes payable to various banks in China, due various dates from May to October 2015. $214.0 million restricted cash and $1.6 million notes receivable are secured for notes payable as of March 31, 2015, and comparatively $324.7 million restricted cash and $0 notes receivable are secured for notes payable as of December 31, 2014, respectively; some notes are further guaranteed by third parties. These notes payable were either repaid or renewed subsequently on the due dates.		432,052		638,829
Total short-term notes payable	$	448,362	$	661,635

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

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
General Steel (China): Loans from various banks in China, due various dates from June 2015 to January 2016. Weighted average interest rate was 7.3% per annum and 7.2% per annum as of March 31, 2015 and December 31, 2014, respectively; some are guaranteed by third parties. These loans were either repaid or renewed subsequently on the due dates.	$	40,612	$	40,562
Longmen Joint Venture: Loans from various banks in China, due various dates from May to November 2015. Weighted average interest rate was 7.8% per annum and 7.1% per annum as of March 31, 2015 and December 31, 2014, respectively; some are guaranteed by third parties, $27.3 million restricted cash and $66.2 notes receivable and comparatively $16.3 million restricted cash and $111.8 notes receivable were secured for the loans as of March 31, 2015 and December 31, 2014, respectively; These loans were either repaid or renewed subsequently on the due dates.		191,536		216,940
Total short-term loans - bank	$	232,148	$	257,502

23

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

As of March 31, 2015 and December 31, 2014, the Company had not met its financial covenants stipulated by certain loan agreements related to the Company’s debt to asset ratio. Two of General Steel (China)’s bank loans contained financial covenants stipulating debt to asset ratios below 70%. At March 31, 2015, General Steel (China)’s debt to asset ratio was 94.0%. At December 31, 2014, General Steel (China)’s debt to asset ratio was 90.8%.

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 March 31, 2015 and December 31, 2014 was $4.7 million and $4.7 million, respectively. According to the Company’s short term loan agreements, the banks have the rights to request for more collateral or additional guarantees if the breach of covenant is not remedied or request early repayment of the loan if the Company does not cure such breach within a certain period of time. As of the date of this report, the Company has not received any notice from the banks to request more collateral, additional guarantees or early repayment of the short term loans due to the breach of covenant.

Due to unrelated parties

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Longmen Joint Venture: Loans from various unrelated companies and individuals, due various dates from May to September 2015, and weighted average interest rate was 10.2% per annum and 5.7% per annum as of March 31, 2015 and December 31, 2014, respectively. These loans were either repaid or renewed subsequently on the due dates.	$	37,337	$	16,999
Longmen Joint Venture: Loans from financing sales.		8,458		37,525
Maoming Hengda: Loans from one unrelated parties and one related party, due on demand, none interest bearing.		6,200		6,193
Total short-term loans – others	$	51,995	$	60,717

The Company had various loans from unrelated companies amounting to $52.0 million and $60.7 million as of March 31, 2015 and December 31, 2014, respectively. Of the $52.0 million, $6.2 million loans carry no interest, $8.5 million of financing sales are subject to interest rates ranging between 4.6% and 12.0%, and the remaining $37.3 million are subject to interest rates ranging from 5.0% to 24.0%. All short term loans from unrelated companies are payable on demand and unsecured.

As part of its working capital management, Longmen Joint Venture has entered into a number of sale and purchase back contracts ("contracts") with third party companies and Yuxin and Yuteng. According to the contracts, Longmen Joint Venture sells rebar to the third party companies at a certain price, and within the same month, Yuxin and Yuteng will purchase back the rebar from the third party companies at a price of 4.6% to 12.0% 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 12.0% 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 March 31, 2015 and 2014 amounted to $118.4 million and $230.5 million, respectively, which are eliminated in the Company’s consolidated financial statements. The financial cost related to financing sales for the three months ended March 31, 2015 and 2014 amounted to $0.7 million and $0.9 million, respectively.

24

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Short term loans due to related parties

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
General Steel China: Loans from Yangpu Capital Automobile, due on demand, and interest rates is 10% per annum.	$	670	$	670
General Steel China: Loans from Tianjin Dazhan Industry Co., Ltd, due on demand, and interest rates is 10% per annum.		7,174		-
Longmen Joint Venture: Loan from Shaanxi Coal and Chemical Industry Group Co., Ltd., due on demand, and interest rate is 7.0% per annum.		128		128
Longmen Joint Venture: Loan from Shaanxi Steel Group due on December 2015, and interest rate is 6.9% and 8.0% per annum. The Company repaid $9,489 subsequent to March 31, 2015.		91,173		-
Longmen Joint Venture: Loan from Shaanxi Steel Group Hanzhong Steel Co., Ltd. due on April 2015, and interest rate is 8.0% per annum. Full balance becomes due on demand in April 2015.		8,155		-
Longmen Joint Venture: Loan from Long Steel Group due on April 2015, and interest rate is 12.0% per annum. The Company repaid $4,924 subsequent to March 31, 2015. Remaining balance becomes due on demand.		8,155		-
Longmen Joint Venture: Loan from Tianjin General Qiugang Pipe Co., Ltd due on September 2015, and interest rate is 5.4% per annum.		3,262		-
Longmen Joint Venture: Loans from financing sales.		98,680		45,582
Total short-term loans - related parties	$	217,397	$	46,380

Long-term loans due to related party

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Longmen Joint Venture: Loans from Shaanxi Steel Group, due on various dates through March 2018 and interest rate are 5.6% - 8.0% per annum.	$	352,850	$	339,549

As of March 31, 2015 and December 31, 2014, total assets used by the Company as collateral for the aforementioned debts were $110.1 million and $96.9 million, respectively.

Total interest expense, net of capitalized interest, amounted to $7.4 million and $9.5 million for the three months ended March 31, 2015 and 2014, respectively.

Capitalized interest amounted to $0 and $0.6 million for the three months ended March 31, 2015 and 2014, respectively. 

Note 11 – 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 March 31, 2015 and December 31 2014, customer deposits amounted to $287.3 million and $225.6 million, respectively, including deposits received from related parties, which amounted to $148.2 million and $132.6 million, respectively.

Note 12 – 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 $21.9 million and $20.4 million in deposits due to sales representatives, including deposits due to related parties, as of March 31, 2015 and December 31, 2014, respectively.

Note 13 - Supplemental disclosure of cash flow information

Interest paid, net of capitalized, amounted to $2.6 million and $5.7 million for the three months ended March 31, 2015 and 2014, respectively.

The Company paid income tax amounted to $0.1 million and $0.01 million for the three months ended March 31, 2015 and 2014, respectively.

During the three months ended March 31, 2015 and 2014, the Company converted $0.03 million and $0.05 million of equipment into inventory productions, respectively.

25

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

During the three months ended March 31, 2015 and 2014, the Company used $0.9 million $1.0 million inventory, respectively, in plant and equipment constructions.

During the three months ended March 31, 2015 and 2014, the Company incurred $2.8 million and $23.4 million accounts payable, respectively, to be paid for the purchase of equipment and construction in progress.

The Company had $23.8 million notes receivable from financing sales loans to be converted to cash as of March 31, 2015.

The Company reclassified $5.9 million purchase deposits - related parties that carried interest to loan receivable - related parties as of March 31, 2015.

The Company had $47.7 million notes receivable from financing sales loans to be converted to cash as of March 31, 2014.

During the three months ended March 31, 2014, the Company had receivables of $0.01 million as a result of the disposal of equipment that has not been collected.

During the three months ended March 31, 2014, one of the Company’s unconsolidated entities declared dividend and the Company was entitled for the dividend amounted to $0.2 million, which was not yet collected.

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, 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 $29.9 million (RMB 183.1 million) for the reduced production efficiency caused by the construction. In addition, in 2010 and 2011, Shaanxi Steel reimbursed Longmen Joint Venture $14.6 million (RMB 89.5 million) and $14.6 million (RMB 89.3 million), respectively, for trial production costs related to the new equipment.

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

The deferred lease income is amortized to income over the remaining term of the 40-year land sub-lease. For the three months ended March 31, 2015 and 2014, the Company recognized $0.5 million and $0.5 million, respectively. As of March 31, 2015 and December 31, 2014, the balance of deferred lease income amounted to $74.4 million and $74.9 million, respectively, of which $2.2 million and $2.2 million represents balance to be amortized within one year. See Note 19 – Related party transactions and balances (k) – 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 based on Shaanxi Steel’s cost to construct the assets of $2.3 million (RMB 14.6 million) to be paid over the term of the Unified Management Agreement of 20 years and (2) 40% of any remaining pre-tax profits from the Asset Pool which includes Longmen Joint Venture and the newly constructed iron and steel making facilities. In February 2014, Shaanxi Steel agreed that it will not demand capital lease payment 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 is therefore considered part of the financing for the capital leased assets which is related to the Unified Management Agreement. For purposes of determining the value of the leased asset and obligation at the inception of the lease, the lease liability is then reduced by the value of the profit sharing component, which is recognized as a derivative liability, which is carried at fair value. See Note 16 – “Profit sharing liability”.

26

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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. As of March 31, 2015, $23.9 million (RMB $146.5 million) energy-saving equipment under these lease agreements have been capitalized and no contingent rent expense has been incurred.

Presented below is a schedule of estimated minimum lease payments on the capital lease obligation for the next five years as of March 31, 2015:

Year ending March 31,	Capital Lease Obligations Minimum Lease Payments
	(in thousands)
2016	$	10,665
2017		175,427
2018		33,657
2019		30,685
2020		29,621
Thereafter		317,780
Total minimum lease payments		597,835
Less: amounts representing interest		(191,741	)
Ending balance	$	406,094

Interest expense for the three months ended March 31, 2015 and 2014 on the capital lease obligations was $5.2 million and $5.4 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.

27

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 17 – Other income (expense)  

Lease income

The deferred lease income from the reimbursement from Shaanxi Steel for the net book value of the fixed assets that were demolished and for the inefficiency costs caused by the construction and loss incurred in the beginning stages of the system production is amortized to income over the remaining sub-lease term. For the three months ended March 31, 2015 and 2014, the Company recognized lease income of $0.5 million and $0.5 million, respectively.

Note 18 – Taxes

Income tax

Significant components of the provision for income taxes on earnings and deferred taxes on net operating losses from operations for the three months ended March 31, 2015 and 2014 are as follows: 

(In thousands)	The three months ended March 31, 2015		The three months ended March 31, 2014
Current	$	30	$	5
Deferred		-		-
Total provision for income taxes	$	30	$	5

Under the Income Tax Laws of the PRC, General Steel (China) and Maoming Hengda (located in Guangdong province) are subject to income tax at a rate of 25%.

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

Deferred taxes assets – China

According to Chinese tax regulations, net operating losses can be carried forward to offset operating income for the next five years. The Group’s losses carried forward of $665.9 million will begin to expire in 2016. The Chinese government recently announced several policies to curb the real estate price increases across the country which led to a slowdown in demand for construction steel products. Additionally due to the continued global economic slowdown and the overcapacity issues in China's steel market, management expected there would be a sustained increase in margin pressure in the next five years until all the existing but outdated steel capacity across the whole industry are eliminated. Management took into consideration this potential negative impact on average selling price and gross margin of its products, re-performed an operating forecast for the next five years and concluded that the beginning-of-the-year balance of deferred tax assets mainly relating to the net operating loss carry forward may not be fully realizable due to the reduction in the projection of income to be available in the next 5 years. Management therefore decided to provide 100% valuation allowance for the deferred tax assets. The valuation allowance as of March 31, 2015 and December 31, 2014 was $123.7 million and $114.8 million, respectively. Management will review this valuation allowance periodically and make adjustments as warranted. Temporary differences represent tax and book differences in various items, such as receivable allowances, inventory allowances, impairments on fixed assets and deferred lease income.

Movement of valuation allowance:

	March 31, 2015			December 31, 2014
	(in thousands)			(in thousands)
Beginning balance	$	114,820		$	97,569
Current period addition		10,040			18,951
Current period reversal		(1,317	)		(614	)
Deconsolidation of Baotou Steel		-			(625	)
Exchange difference		173			(461	)
Ending balance	$	123,716		$	114,820

28

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Deferred taxes assets – U.S.

General Steel Holdings, Inc. was incorporated in the United States and has incurred net operating losses for income tax purposes for the three months ended March 31, 2015. The net operating loss carry forwards for United States income taxes amounted to $3.2 million, which may be available to reduce future years’ taxable income. These carry forwards will expire, if not utilized, starting from 2027 through 2034. 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 March 31, 2015 was $1.1 million. The net change in the valuation allowance for the three months ended March 31, 2015 was $0. 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 March 31, 2015. 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 March 31, 2015 and December 31, 2014, the Company had $2.0 million and $3.2 million in value added tax credit which are available to offset future VAT payables, respectively.

Sales and purchases are recorded net of VAT collected and paid as the Company acts as an agent for the government for VAT collection. VAT on sales and VAT on purchases amounted to $139.1 million and $132.2 million, respectively, for the three months ended March 31, 2015 and $152.9 million and $151.9 million, respectively, for the three months ended March 31, 2014. 

Taxes payable consisted of the following: 

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
VAT taxes payable	$	6,847	$	3,147
Income taxes payable		209		243
Misc. taxes		2,337		1,811
Totals	$	9,393	$	5,201

Note 19 – Related party transactions and balances

Related party transactions

a. Capital lease

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

	March 31, 2015			December 31, 2014
	(in thousands)			(in thousands)
Machinery	$	603,618		$	602,878
Less: accumulated depreciation		(112,298	)		(105,001	)
Carrying value of leased assets	$	491,320		$	497,877

29

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

b. The following chart summarized sales to related parties for the three months ended March 31, 2015 and 2014. 

Name of related parties	Relationship	Three months ended March 31, 2015		Three months ended March 31, 2014
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	11,270	$	44,800
Shaanxi Haiyan Trade Co., Ltd	Significant influence by Long Steel Group*		9,578		15
Shaanxi Shenganda Trading Co., Ltd	Significant influence by Long Steel Group		15,998		20,736
Shaanxi Steel	Majority shareholder of Long Steel Group		481		471
Shaanxi Coal and Chemical Industry Group Co., Ltd.	Shareholder of Shaanxi Steel		20,068		4,969
Shaanxi Long Steel Group Baoji Steel Rolling Co., Ltd	Subsidiary of Long Steel Group		-		6,618
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		-		4,597
Total		$	57,395	$	82,206

Sales to related parties in trading transactions, which were netted against the corresponding cost of goods sold, amounted to $91.0 million and $33.3 million for the three months ended March 31, 2015 and 2014, respectively. See Note 2(m) Revenue Recognition for details.

*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.

c. The following charts summarize purchases from related parties for the three months ended March 31, 2015 and 2014.

Name of related parties	Relationship	Three months ended March 31, 2015		Three months ended March 31, 2014
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	5,993	$	151,772
Hancheng Haiyan Coking Co., Ltd	Noncontrolling shareholder of Long   Steel Group		48,147		44,088
Xi’an Pinghe Metallurgical Raw Material Co., Ltd	Noncontrolling shareholder of Long Steel Group		1,072		904
Shaanxi Coal and Chemical Industry Group Co., Ltd	Shareholder of Shaanxi Steel		1,505		-
Shaanxi Huafu New Energy Co., Ltd	Significant influence by the Long Steel Group		5,960		6,660
Tianwu General Steel Material Trading Co., Ltd.	Investee of General Steel (China)		36,174		23,339
Tianjin General Quigang Pipe Co., Ltd	Partially owned by CEO through indirect shareholding**		3,287		4,275
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		-		27,919
Others	Entities either owned or have significant influence by our affiliates or management		331		47
Total		$	102,469	$	259,004

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

30

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Related party balances

a. Loans receivable – related parties:

Name of related parties	Relationship	March 31, 2015		December 31, 2014
		(in thousands)		(in thousands)
Tianjin Hengying Trading Co., Ltd.*	Partially owned by CEO through indirect shareholding	$	622	$	13,997
Tianjin Dazhan Industry Co., Ltd.*	Partially owned by CEO through indirect shareholding		-		14,617
Beijing Shenghua Xinyuan Metal Materials Co., Ltd.	Partially owned by CEO through indirect shareholding		6,106		6,099
Total		$	6,728	$	34,713

*The Company reclassified advances for inventory purchase - related parties related to trading transactions, as noted in note 2(g), to loans receivable - related parties due to their interest-bearing nature.

The Company issued loans to these related parties for cash flow purposes to earn interest income, which have a higher interest rate than the bank financing interest rates.

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

b. Accounts receivables – related parties:

Name of related parties	Relationship	March 31, 2015		December 31, 2014
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	151	$	148
Shaanxi Coal and Chemical Industry Group Co., Ltd.	Shareholder of Shaanxi Steel		56,982		-
Shaanxi Shenganda Trading Co., Ltd.	Significant influence by Long Steel Group		-		5,715
Tianjin Daqiuzhuang Steel Plates	Partially owned by CEO through indirect shareholding		19		19
Shaanxi Steel	Majority shareholder of Long Steel Group		2,031		2,101
Others			-		641
Total		$	59,183	$	8,624

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	March 31, 2015		December 31, 2014
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	1,219	$	165
Shaanxi Steel	Majority shareholder of Long Steel Group		1,141		35,669
Tianjin General Quigang Pipe Co., Ltd*	Partially owned by CEO through indirect shareholding		17,939		1,237
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		927		721
Beijing Shenghua Xinyuan Metal Materials Co., Ltd.	Partially owned by CEO through indirect shareholding		466		313
Victory Energy Resource Co., Ltd.	Partially owned by CEO through indirect shareholding		1,101		1,101
Others	Entities either owned or have significant influence by our affiliates or management		350		528
Total		$	23,143	$	39,734

^* Full balance has been repaid subsequently to March 31, 2015 by this entity.

31

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

d. Advances on inventory purchase – related parties:

Name of related parties	Relationship	March 31, 2015		December 31, 2014
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	7,269	$	7,139
Shaanxi Shenganda Trading Co., Ltd.	Significant influence by Long Steel Group		-		27,549
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		3,873		3,807
Tianjin General Qiugang Pipe Co., Ltd*	Partially owned by CEO through indirect shareholding		84,547		7,091
Others	Entities either owned or have significant influence by our affiliates or management		68		31
Total		$	95,757	$	45,617

^*During the three months ended March 31, 2015, the Company entered into a purchase agreement with this entity to purchase steel related products to resell to Tianwu General Steel Material Trading Co., Ltd. (see Note 19 (h) Customer deposit – related parties). The term of the agreement is expected to be fulfilled within three months after deposits were made. The purchase advances are refundable. For the three months ended March 31, 2015, the Company made $61.9 million of purchase advances of which $3.3 million were utilized. The entity also acts as a customer in the Company’s trading transactions. During the three months ended March 31, 2015, the Company sold approximately $16.0 million to this entity. For the three months ended March 31, 2014, the Company made $29.5 million of purchase advances of which $4.3 million was utilized. The entity also acts as a customer in the Company’s trading transactions. During the three months ended March 31, 2014, the Company sold $1.4 million to this entity. 

e. Accounts payable - related parties:

Name of related parties	Relationship	March 31, 2015		December 31, 2014
		(in thousands)		(in thousands)
Hancheng Haiyan Coking Co., Ltd	Noncontrolling shareholder of Longmen Joint Venture	$	77,617	$	64,276
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		94,006		79,886
Shaanxi Coal and Chemical Industry Group Co., Ltd.	Shareholder of Shaanxi Steel		14,828		23,726
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		870		869
Xi’an Pinghe Metallurgical Raw Material Co., Ltd	Noncontrolling shareholder of Long Steel Group		10,829		11,035
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		-		1
Henan Xinmi Kanghua Fire Refractory Co., Ltd	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		1,002		746
Beijing Daishang Trading Co., Ltd	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		28		36
Tianjin General Qiugang Pipe Co., Ltd	Partially owned by CEO through indirect shareholding		-		2,462
Tianwu General Steel Material Trading Co., Ltd.	Investee of General Steel (China)		7,986		22,916
Maoming Shengze Trading Co., Ltd	Partially owned by CEO through indirect shareholding		4,274		1,773
Shaanxi Steel	Majority shareholder of Long Steel Group		683		-
Shaanxi Shenganda Trading Co, Ltd.	Significant influence by Long Steel Group		14,834		-
Others	Entities either owned or have significant influence by our affiliates or management		7		57
Total		$	226,964	$	207,783

32

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

f. Short-term loans - related parties:

Name of related parties	Relationship	March 31, 2015		December 31, 2014
		(in thousands)		(in thousands)
Shaanxi Steel Group Hanzhong Steel Co., Ltd.	Subsidiary of Shaanxi Steel	$	8,155	$	-
Shaanxi Steel	Majority shareholder of Long Steel Group		91,173		-
Shaanxi Coal and Chemical Industry Group Co., Ltd	Shareholder of Shaanxi Steel		68,754		34,460
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		30,533		-
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		7,610		3,039
Tianjin General Quigang Pipe Co., Ltd.	Partially owned by CEO through indirect shareholding		3,262
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		7,240		8,211
Yangpu Capital Automobile	Partially owned by CEO through indirect shareholding		670		670
Total		$	217,397	$	46,380

See Note 9 – Debt for the loan details.

g. 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	March 31, 2015		December 31, 2014
		(in thousands)		(in thousands)
Tianjin Hengying Trading Co, Ltd	Partially owned by CEO through indirect shareholding	$	378	$	378
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		28,277		33,968
Shaanxi Steel	Majority shareholder of Long Steel Group		27,745		44,146
Wendlar Investment & Management Group Co., Ltd	Common control under CEO		1,180		1,196
Yangpu Capital Automobile	Partially owned by CEO through indirect shareholding		416		399
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		3,750		3,883
Maoming Shengze Trading Co., Ltd	Partially owned by CEO through indirect shareholding		157		2,775
Shaanxi Shenganda Trading Co., Ltd.	Significant influence by Long Steel Group		13,350		-
Teamlink Investment Co., Ltd	Partially owned by CEO through indirect shareholding		20,500		-
Others	Entities either owned or have significant influence by our affiliates or management		524		507
Total		$	96,277	$	87,252

33

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

h. Customer deposits – related parties:

Name of related parties	Relationship	March 31, 2015		December 31, 2014
		(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		7,414		4,467
Shaanxi Haiyan Trade Co, Ltd	Significant influence by Long Steel Group		5,391		6,844
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		28,863		23,517
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		16		57
Shaanxi Shenganda Trading Co., Ltd	Significant influence by Long Steel Group		1,960		-
Tianwu General Steel Material Trading Co., Ltd.*	Investee of General Steel (China)		104,522		97,721
Total		$	148,176	$	132,616

^*This entity is one of the Company’s trading partners and sells or purchases the steel related products to or from the Company.  During three months ended March 31, 2015 and 2014, the Company received   $6.7 million and $71.8 million of deposits from this entity, of which, no trading sales transactions were utilized. During the year ended December, 31 2014 and the first quarter of 2015, the Company received a total deposits of RMB 600 million (approximately $104.0 million) from this entity. The deposits are refundable.

i. Deposits due to sales representatives – related parties

Name of related parties	Relationship	March 31, 2015		December 31, 2014
		(in thousands)		(in thousands)
Hancheng Haiyan Trade Co., Ltd	Significant influence by Long Steel Group	$	652	$	652
Gansu Yulong Trading Co., Ltd.	Significant influence by Long Steel Group		1,076		1,075
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		196		196
Shaanxi Yuchang Trading Co., Ltd	Significant influence by Long Steel Group		587		586
Shaanxi Junlong Rolling Co., Ltd.	Investee of Long Steel Group		42		-
Total		$	2,553	$	2,509

j. Long-term loans – related party:

Name of related party	Relationship	March 31, 2015		December 31, 2014
		(in thousands)		(in thousands)
Shaanxi Steel	Majority shareholder of Long Steel Group	$	352,850	$	339,549
Total		$	352,850	$	339,549

The Company also provided guarantee on related parties’ bank loans amounting to $49.0 million and $82.3 million as of March 31, 2015 and as of December 31, 2014, respectively.

k. Deferred lease income

	March 31, 2015			December 31, 2014
	(in thousands)			(in thousands)
Beginning balance	$	74,889		$	77,444
Less: Lease income realized		(544	)		(2,176	)
Exchange rate effect		92			(379	)
Ending balance		74,437			74,889
Current portion		(2,179	)		(2,176	)
Noncurrent portion	$	72,258		$	72,713

For the three months ended March 31, 2015 and 2014, the Company realized lease income from Shaanxi Steel, a related party, amounted to $0.5 million and $0.5 million, respectively.

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 March 31, 2015 and 2014 amounted to $2.8 million and $2.8 million, respectively.

Note 21 – Statutory reserves

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

Surplus reserve fund

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

The transfer to this reserve must be made before distribution of any dividend to shareholders. The surplus reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any, and may be utilized for business expansion or converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of the shares currently held by them, provided that the remaining reserve balance after such issue is not less than 25% of the registered capital. For the three months ended March 31, 2015 and 2014, the Company did not make any contributions to these reserves.

Special reserve

The Company is required by the PRC government to reserve safety and maintenance expense to the cost of production based on the actual quantity of mineral exploited.  The amount of reserves is determined within the unit price range provided by Ministry of Finance of PRC. For the three months ended March 31, 2015 and 2014, the Company made contributions of $0.2 million and $0.3 million to these reserves, respectively and used $0.04 million and $0.1 million of safety and maintenance expense, respectively.

Note 22 – 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 March 31, 2015 is as follows:

Year ending March 31,	Minimum lease payment
	(in thousands)
2016	$	2,126
2017		1,946
2018		1,885
2019		1,206
2020		1,206
Years after		40,152
Total minimum payments required	$	48,521

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GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Total rental expense was $0.1 million and $0.9 million for the three months ended March 31, 2015 and 2014, respectively.

Contractual Commitments

Longmen Joint Venture has $9.9 million contractual obligations related to construction projects as of March 31, 2015 estimated to be fulfilled between April and December 2015.

Contingencies

As of March 31, 2015, Longmen Joint Venture provided guarantees to related parties’ and third parties’ bank loans, including lines of credit and others, amounting to $55.4 million.

Nature of guarantee	Guarantee amount		Guaranty Due Date
	(In thousands)
Line of credit	$	52,274	Various from April 2015 to August 2017
Financing by the rights of goods delivery in future		3,099	June 2015
Total	$	55,373

Name of parties being guaranteed	Guarantee amount		Guaranty Due Date
	(In thousands)
Long Steel Group	$	19,654	Various from April to September 2015
Shaanxi Haiyan Coke Group Co., Ltd.		13,048	September 2015
Long Steel Group Fuping Rolling Steel Co., Ltd		3,099	June 2015
Xi’an Laisheng Logistics Co., Ltd		3,262	May 2015
Gansu Yulong Trading Co., Ltd		16,310	August 2017
Total	$	55,373

As of March 31, 2015, the Company did not accrue any liability for the amounts the Group has guaranteed for third and related parties because those parties are current in their payment obligations and the Company has not experienced any losses from providing guarantees. The Company has evaluated the debt guarantees and concluded that the likelihood of having to make payments under the guarantees is remote and that the fair value of the stand-ready obligation under these commitments is not material.

Note 23 – 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) & General Shengyuan in Tianjin City.

The Group operates in two business segments, one consisting of General Shengyuan and one consisting of three different divisions including Longmen Joint Venture, Maoming Hengda and General Steel (China). 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.

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GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following represents results of division operations for three months ended March 31, 2015 and 2014:

(In thousands)
Sales:	2015		2014
Longmen Joint Venture	$	328,158	$	594,014
Maoming Hengda		6		36
Baotou Steel Pipe Joint Venture		-		162
General Shengyuan		-		-
General Steel (China)		-		53
Total sales		328,164		594,265
Interdivision sales		-		(54	)
Consolidated sales	$	328,164	$	594,211

Gross profit (loss):	2015			2014
Longmen Joint Venture	$	(32,147	)	$	(22,219	)
Maoming Hengda		-			24
Baotou Steel		-			(23	)
General Shengyuan		-			-
General Steel (China)		-			(343	)
Total gross loss		(32,147	)		(22,561	)
Interdivision gross profit		-			-
Consolidated gross loss	$	(32,147	)	$	(22,561	)

Income (loss) from operations:	2015			2014
Longmen Joint Venture	$	(53,498	)	$	(39,294	)
Maoming Hengda		(561	)		(522	)
Baotou Steel		-			(44	)
General Shengyuan		-			-
General Steel (China)		(734	)		(2,566	)
Total loss from operations		(54,793	)		(42,426	)
Reconciling item (1)		(919	)		(1,237	)
Consolidated loss from operations	$	(55,712	)	$	(43,663	)

Net income (loss) attributable to General Steel Holdings, Inc.:	2015			2014
Longmen Joint Venture	$	(42,405	)	$	(38,034	)
Maoming Hengda		(666	)		(537	)
Baotou Steel		-			(35	)
General Shengyuan		-			-
General Steel (China)		(1,163	)		(3,843	)
Total net loss attributable to General Steel Holdings, Inc.		(44,234	)		(42,449	)
Reconciling item (1)		(919	)		(1,115	)
Consolidated net loss attributable to General Steel Holdings, Inc.	$	(45,153	)	$	(43,564	)

Depreciation, amortization and depletion:	2015		2014
Longmen Joint Venture	$	24,186	$	23,530
Maoming Hengda		310		304
Baotou Steel		-		62
General Shengyuan		-		-
General Steel (China)		668		450
Consolidated depreciation, amortization and depletion	$	25,164	$	24,346

Finance/interest expenses:	2015		2014
Longmen Joint Venture	$	19,148	$	26,990
Maoming Hengda		-		-
Baotou Steel		-		1
General Shengyuan		-		-
General Steel (China)		1,421		1,609
Reconciling item (1)		1		95
Consolidated interest expenses	$	20,570	$	28,695

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GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Capital expenditures:	2015		2014
Longmen Joint Venture	$	30,625	$	56,747
Maoming Hengda		296		32
Baotou Steel		-		-
General Shengyuan		-		-
General Steel (China)		668		82
Reconciling item (1)		-		-
Consolidated capital expenditures	$	31,589	$	56,861

Total Assets as of:	March 31, 2015			December 31, 2014
Longmen Joint Venture	$	2,310,161		$	2,408,218
Maoming Hengda		22,555			25,933
General Shengyuan		1,142			-
General Steel (China)		249,013			158,606
Interdivision assets		(79,743	)		(30,486	)
Reconciling item (2)		3,281			2,953
Total Assets	$	2,506,409		$	2,565,224

(1) Reconciling item represents income or expenses of the Company, arising from General Steel Investment Co., Ltd, Yangpu Shengtong Investment Co., Ltd and Qiu Steel for the three months ended March 31, 2015 and 2014, which are non-operating entities.

(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 March 31, 2015 and December 31, 2014, which are non-operating entities.

Note 24 – Subsequent event

On April 14, 2015, the Company granted 500,000 shares of common stock for investor relations consulting services under a service agreements dated April 14, 2015. The shares were valued at $0.98 per share, the quoted market price at the time the services were provided.

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

Forward-Looking Statements

The following discussion of the financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and related notes thereto. The following discussion contains forward-looking statements. General Steel Holdings, Inc. is referred to herein as “we,” “our,” “us” and “the Company.” The words or phrases “would be,” “will allow,” “expect to,” “intends to,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” or similar expressions are intended to identify forward-looking statements. Such statements include those concerning our expected financial performance, our corporate strategy and operational plans. Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties, including: (a) those risks and uncertainties related to general economic conditions in the People’s Republic of China, including regulatory factors that may affect such economic conditions; (b) whether we are able to manage our planned growth efficiently and operate profitable operations, including whether our management will be able to identify, hire, train, retain, motivate and manage required personnel or that management will be able to successfully manage and exploit existing and potential market opportunities; (c) whether we are able to generate sufficient revenues or obtain financing to sustain and grow our operations; and (d) whether we are able to successfully fulfill our primary requirements for cash which are explained below under “Liquidity and Capital Resources.” Unless otherwise required by applicable law, we do not undertake, and we specifically disclaim any obligation, to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement. Additional information regarding certain factors which could cause actual results to differ from such forward-looking statements include, but are not limited to, those described in Item 1A, “Risk Factors”, to our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 filed with the SEC on April 10, 2015.

Recent Developments and First Quarter Highlights

The first quarter of 2015 was highlighted with the following:

· Sales in the first quarter of 2015 decreased by 44.8% to $328.2 million, from $594.2 million in the first quarter of 2014, due to significant decrease in sales volume to avoid selling our rebar products at prices significantly below cost as rebar selling prices declined. For the first quarter of 2015, sales volume of rebar in Shaanxi Longmen Iron and Steel Co., Ltd. (“Longmen Joint Venture”) totaled 1.0 million metric tons, a decrease of 27.5%, compared to 1.3 million metric tons in the first quarter of 2014, with an average selling price of $343.8 per ton, as compared to $450.9 per ton in the first quarter of 2014. As a result, our finished goods inventory also increased from $12.3 million at December 31, 2014 to $43.1 million as we intended to sell the rebar when we expected the selling price will be recovered at higher selling prices in the second and third quarter of 2015.

· Gross loss in the first quarter of 2015 was $(32.1) million, or (9.8)% of total revenue, as compared to $(22.6) million, or (3.8)% of total revenue in the first quarter of 2014.

· Total finance expense in the first quarter of 2015 was $20.6 million, as compared to $28.7 million for the same period in 2014. Finance expenses mainly consisted of interest expense on capital lease, which was $5.2 million and $5.1 million in the first quarter of 2015 and 2014, respectively, and interest expense on bank borrowings and discounted notes receivable, which was $15.4 million and $23.6 million in the first quarter of 2015 and 2014, respectively.

· Loss per share was $(0.73) and $(0.78) in the first quarter of 2015 and 2014, respectively. The decrease in the loss in the first quarter was mainly due to the decrease in the average selling price of rebar decreasing more than the average cost, leading to an increase in gross loss and our increased net loss was split into more weighted outstanding shares during the first quarter of 2015 as compared to the first quarter of 2014.

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 sheets and high-speed wire. Our current aggregate annual production capacity of crude steel products under management, consisting mainly of steel rebar, is 7 million metric tons. Our products have a variety of demand drivers, such as infrastructure construction and rural income. Domestic economic conditions are also an overall demand driver for all our products.

In June 2014, the Board approved our plan to transform from an integrated steel producer into a multi-faceted, synergistic platform that will comprise not only steel-related businesses but also high-growth, high-margin non-steel businesses. In February 2015, we established a radio-frequency identification “RFID” joint venture to pursue Internet-of-Things (“IoT”) opportunities.

Our growth strategy is a combination of optimizing operating efficiencies in our steel business and expanding into other high-growth and high-margin non-steel industries:

· We aim to drive profitability through improved operational efficiencies and optimization of our cost structure and continual cooperation and partnerships with leading state-owned enterprises (SOEs).

· We aim to expand into other high-growth and high-margin non-steel industries, such as logistics and Internet-of-Things.

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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. 

Steel Related Subsidiaries and IoT Technology Company

We presently have controlling interests in three steel-related subsidiaries and one IoT Technology company:

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

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

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

· Tianjin General Shengyuan IoT Technology Co., Ltd. (“General Shengyuan IoT”).

Our Company, together with our subsidiaries, majority owned subsidiaries and variable interest entity are referred to as the “Group.” Longmen Joint Venture, which is currently consolidated into our Company, represents the majority of our revenue and assets. It was determined to be a variable interest entity in which we are considered the primary beneficiary, as fully explained below.

In view of the near-term challenges for the steel sector, we are strategically accelerating our business transformation. Our transformation strategy is to pursue opportunities that offer compelling benefits to our organization and shareholders, including:

· First, strengthen our financials while providing the financial flexibility to pursue higher return, higher growth opportunities;

· Second, reduce the complexity of our business structure, which is consistent with our objectives for internal simplification and operating efficiency;

· Third, diversify operating risk in order to lower our high reliance on steel business, while at the same time leverage on our vast vertical resources in the steel industry; and

· Fourth, pursue opportunities for additional value creation.

We formed a joint venture in February of 2015 with an RFID Expert team to develop and commercialize RFID technologies and data solutions. The formation of this joint venture represents a unique opportunity to accelerate our expansion into the vibrant logistics and Internet-of-Things sectors.

General Steel (China) Co., Ltd

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

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

On January 1, 2010, General Steel (China) entered into a lease agreement with Tianjin Shuangjie Liansheng Rolled Steel Co., Ltd. (the “Lessee”), an unrelated third party, whereby General Steel (China) leased parts of 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.

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 as a Variable Interest Entity (“VIE”) and we are the primary beneficiary.

Currently, Longmen Joint Venture has five branch offices, four consolidated subsidiaries/VIE and one entities in which it has a noncontrolling interest. It employs approximately 8,400 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.

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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.

An established regional network of approximately 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 of 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 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 m ² sintering machine, two 1,280 m ³ blast furnaces, two 120 ton converters and some auxiliary systems, are managed collectively as a single virtual asset pool (“Asset Pool”). Longmen Joint Venture manages the Asset Pool as the principal operating entity and is responsible for the daily operations of the new and existing facilities. The Agreement leverages each of the parties’ operating strengths, allowing 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).

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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 that targeted customers in Guangxi Province and the western region of Guangdong. To take advantage of a stronger market demand in Shaanxi Province, between 2009 and 2010, we relocated the 1.8 million metric ton capacity rebar production line and high-speed wire production line from Maoming Hengda's facility to Longmen Joint Venture.

In December 2010, we brought online a new 400,000 ton capacity rebar production line. 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.

Tianjin General Shengyuan IoT Technology Co., Ltd

On February 10, 2015, we reached a definitive agreement (“the Agreement”) to form a joint venture with a team of RFID experts (the “Expert Team”), to develop and commercialize RFID technology data solutions. The joint venture entity named Tianjin General Shengyuan IoT Technology Co., Ltd. (“General Shengyuan IoT”) obtained its business license on February 13, 2015.

The Expert Team includes several forerunners in the data integration and logistics industries, led by Mr. Michael Au, a veteran with over 17 years experience and more than a dozen patents in RFID technology. In 1997, Mr. Au developed and patented the first non-contact RFID device for moving vehicles that is still being used today for highway toll collections in the Guangdong Province. In 2005, Mr. Au co-founded Xindeco IoT (formerly Xinda Huicong Technology Company), the first China-based company specializing in the development and production of UHF RFID tags. Supporting Mr. Au and acting as the Expert Team’s chief technical adviser will be Dr. Changyu Wu, a member of the US Institute of Electrical and Electronics Engineers with over 20 years of experience in the development of data-integration devices. Michael Au was appointed as CEO of General Shengyuan IoT.

The joint venture brings together the strength and expertise of each partner in developing and commercializing RFID technologies and a cloud-based, Internet-of-Things platform. We own 70% of General Shengyuan IoT by contributing $1.6 million (RMB 10.0 million), while the Expert Team contributes intellectual property, including proprietary RFID technologies, licensed patents and domain expertise. The venture’s proprietary RFID tags and related applications can effectively track supplies, inventories, and goods throughout the manufacturing process, as well as, finished goods and merchandises in transit. Meanwhile, the venture’s cloud-based Internet-of-Things platform for bulk commodity logistics provides real-time data on supplies, inventory, and goods, thereby greatly enhancing its customers’ administration and planning processes, as well as, asset tracking and supply chain management. General Shengyuan IoT is still in the development stage and no revenues and significant operating expenses during the period.

Production Capacity Information Summary by Subsidiary

Annual Production Capacity (metric tons)	General Steel (China) (1)		Longmen Joint Venture	Maoming Hengda (1)
Crude Steel		-	7 million		-
Processing		400,000	5 million		400,000
Main Products		Hot-rolled sheet	Rebar/High-speed wire		Rebar
Main Application		Light Agricultural vehicles	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 related parties, 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 months ended March 31, 2015, approximately 39.2% of our sales were to five customers. 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.

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Demand for our Products

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 7.4% for the national GDP, a GDP increase of 9.7% was reported by Shaanxi Province in 2014. Additionally, according to Accounting and Corporate Finance Production Statistics in China, Sichuan Province also reported a healthy GDP increase of 8.5% in 2014. 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 approximately $299 billion (RMB 1.84 trillion) for the year ended December 31, 2014, an increase of 17.8% over the same period in 2013.

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

In addition, the Guanzhong-Tianshui Economic Zone will concentrate on the development of the Xi’an area. The metropolitan area construction program focuses on the cities of Xi’an, 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 $40.2 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 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 the 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, National Development and Reform Commission (“NDRC”) announced nine focal points of the western development, which will speed up the major infrastructure construction in the western areas, including the construction of railway, highway and hydro-projects.

China’s central government also introduced the One Belt and One Road (“OBAOR”) strategy, with an aim to create new markets for China’s products by promoting China’s infrastructure investments in less-developed countries. “One Road” refers to the 21st century Maritime Silk Road initiative, which seeks to extend China’s trading and infrastructure investments into Southeast Asian nations and further afield to south Asia and Africa. “One Belt” refers to the Silk Road Economic Belt, which extends into central Asian nations.

According to figures released by China’s National Development and Reform Commission, 33 infrastructure projects kicked off in 2014 in Western China, worth a total investment of RMB 835.3 billion ($134.7 billion), more than doubled from a total investment of RMB 326.5 billion on 20 projects in 2013.

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.

Supply of Raw Materials

The primary raw materials we use for steel production are iron ore, coke, hot-rolled steel coil and steel billets.  Longmen Joint Venture uses iron ore and coke as its main raw materials.  Maoming Hengda uses steel billets as its main raw material. Iron ore 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 71% of production costs are associated with raw materials, with iron ore being the largest component.

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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.

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.

Industry Environment

Despite demand growth experienced throughout the past years, 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 and has become the most significant challenge in the steel manufacturing business. Chinese crude steel production reached a record high of 823 million tons in 2014, an increase of 0.89% over 2013, while the total consumption of crude steel was only 738 million tons in 2014, a decrease of 3.4% 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.

China’s steel industry is highly fragmented, and the Chinese government continues to encourage industry consolidation. The Chinese central government has had a long-stated goal to consolidate 60% of domestic steel production among the top ten producers by 2015, and expanding to 70% by 2020. The top ten producers’ output fell to 39% of the national output in 2013 from 49% in 2010, which is still below the 60% target for 2015 set in the 12^th year plan.

Meanwhile, the Ministry of Industry and Information Technology of the People's Republic of China is targeting to cut up to 80 million metric tons of capacity by the end of 2018. 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 May 2014, the government reaffirmed its determination of industry consolidation, and announced that it plans to eliminate 28.7 million tons of obsolete iron and steel capacity in 2014 and successfully eliminated 31.1 million tons, which was more than the original target amount. Such industry consolidation through the reduction of obsolete iron and steel capacities are not expected to directly impact our Company because we continue to see a strong demand for our products, especially in Western China, and believe there are significant growth opportunities in the industry and market we serve.

Despite the government’s initiatives to encourage industry consolidation and cut over-capacity, it is estimated that new capacity of approximately 20~25 million metric tons was added in 2014. Excess supply, weakening economic growth, and sagging prices have resulted in depressed margins and operating losses. According to statistics by China Iron and Steel Association, the blended net margin of China steel enterprises in 2014 was only 0.85%, with approximately 15% of major steel companies monitored by China Iron and Steel Association still incurring operating losses.

 On July 12, 2010, the Ministry of Industry & Information Technology 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.  

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 one of the key steel enterprises in China’s Shaanxi Province.

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Results of Operations for the Three Months Ended March 31, 2015

Sales

Three months ended March 31, 2015 compared with three months ended March 31, 2014

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

	Three months ended
	March 31, 2015							March 31, 2014							Change			Change
in thousands, except metric tons	Volume		Sales		%			Volume		Sales		%			Volume %			Sales %
Longmen Joint Venture		954,566	$	328,158		100.0	%		1,317,540	$	594,014		100.0	%		(27.5	)%		(44.8	)%
Others		29		6		0.0	%		723		197		0.0	%		(96.0	)%		(97.0	)%
Total Sales		954,595	$	328,164		100.0	%		1,318,263	$	594,211		100.0	%		(27.6	)%		(44.8	)%

Total sales for the three months ended March 31, 2015 decreased by 44.8% to $328.2 million from $594.2 million for the same period in 2014. The decrease in sales compared to the same period in 2014 was predominantly due to the decreased average selling price. Longmen Joint Venture comprised approximately 100.0% and 100.0% of total sales for the first quarter of 2015 and 2014, respectively. Sales volume of rebar decreased by 27.6% to 1.0 million metric tons as compared to 1.3 million metric tons in the same period in 2014.  The average selling price of rebar decreased by 23.7% to approximately $343.8 per ton in the first quarter of 2015 compared to approximately $450.9 per ton in the same period of 2014.

As a result of the China and global steel industry over-capacity, Chinese economic control polices and weakened global economy, commodity prices dropped, and the price of steel had been on a declining trend from the third quarter of 2012 to 2015. The over-capacity issue impacted our results since the third quarter of 2012 and continued to do so in 2014 and 2015. At the same time, we strategically decreased our sales volume in the first quarter of 2015 to avoid selling our rebar products at prices significantly below cost as rebar selling prices declined. As a result, our finished goods inventory also increased from $12.3 million at December 31, 2014 to $43.1 million as we intended to sell the rebar when we expected the selling price will be recovered at higher selling prices in the second and third quarter of 2015 as the two quarters normally were our best quarters in term of financial performance.

Our five major customers were distributors and collectively represented approximately 39.2% of our total sales for the three months ended March 31, 2015 as compared to 20.4% of our total sales for the three months ended March 31, 2014. 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 March 31, 2015 compared with three months ended March 31, 2014

	Three months ended
	March 31, 2015							March 31, 2014							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		954,566	$	360,305		100.0	%		1,317,540	$	616,234		99.9	%		(27.5	)%		(41.5	)%
Others		29		6		0.0	%		723		538		0.1	%		(96.0	)%		(98.9	)%
Total Cost of Goods Sold		954,595	$	360,311		100.0	%		1,318,263	$	616,772		100.0	%		(27.6	)%		(41.6	)%

Our primary cost of goods sold is the cost of raw materials such as iron ore, coke, alloy and scrap steel. The costs of iron ore and coke account for approximately 66.6% of our total cost of sales. The cost of goods sold decreased by 41.6% to $360.3 million in the first quarter of 2015 from $616.8 million in the same period of 2014. The decrease was mainly driven by the decreased unit costs of raw materials as a result of the decline in iron ore and coke purchase prices of approximately 39.2% and 19.0%, respectively, for the three months ended March 31, 2015 as compared to the same period in 2014. As such, the average costs of rebar manufactured decreased 19.3% to approximately $377.5 per ton in the first quarter of 2015 from approximately $467.7 per ton in the same period of 2014.

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Gross Loss

Three months ended March 31, 2015 compared with three months ended March 31, 2014

	Three months ended
	March 31, 2015								March 31, 2014								Change
in thousands, except metric tons	Volume		Gross Loss			Margin %			Volume		Gross Loss			Margin %			Gross Loss
Longmen Joint Venture		954,566	$	(32,147	)		(9.8	)%		1,317,540	$	(22,220	)		(3.7	)%		44.7	%
Others		29		-			0.0	%		723		(341	)		(173.1	)%		(100.0	)%
Total Gross Loss		954,595	$	(32,147	)		(9.8	)%		1,318,263	$	(22,561	)		(3.8	)%		42.5	%

Gross loss for the first quarter of 2015 was $(32.1) million, or (9.8)% of total sales, as compared to $(22.6) million, or (3.8)% of total sales for the same period in 2014. The decrease in gross margin percentage was mainly attributable to the percentage decrease of average rebar selling price of 23.7% being higher than the percentage decrease of costs of rebar manufactured of 19.3% for the first quarter of 2015 as compared to the same period of 2014.

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

Three months ended March 31, 2015 compared with three months ended March 31, 2014

(in thousands)	Three months ended
	March 31, 2015			March 31, 2014			Change %
Selling, general and administrative expenses	$	(17,355	)	$	(21,053	)		(17.6	)%
Unallocated overheads expenses	$	(19,134	)		-			100.0	%
SG&A expenses and Unallocated overheads expenses as a percentage of total revenue		(11.1	)%		(3.5	)%

SG&A expenses, such as travel expenses and transportation fees, entertainment, employee benefit, training, and travel expenses decreased by 17.6% to $17.4 million for the three months ended March 31, 2015, compared to $21.1 million for the same period in 2014.

Selling expenses decreased by 23.5% to $6.4 million for three months ended March 31, 2015 as compared to $8.3 million in the same period of 2014. The decrease was mainly due to the $1.9 million or 27.2% decrease in freight expenses along with the 27.6% decrease in the sales volume of our rebar products.

General and administrative (“G&A”) expenses were approximately $11.0 million and $12.7 million for three months ended March 31, 2015 and 2014, respectively. The decrease was mainly due to Longmen Joint Venture decreased employee base salaries and employee benefit expense starting in the third quarter of 2014 and the decrease in utilities expenses, consulting expenses, and legal expenses.

In March of 2015, we had abnormally low production in the first quarter of 2015 due to our annual plant and machinery maintenance in an effort to prevent substantial loss from the significant decrease in rebar selling prices during the quarter. As a result, we reallocated fixed overheads expenses from cost of goods sold to G&A expense in accordance with ASC 330-10-30-6 as the amount of fixed overhead allocated to each unit of production shall not be increased as a consequent of abnormally low production or idle plant due to our annual plant and machinery maintenance.

Change in Fair Value of Profit Sharing Liability

Three months ended March 31, 2015 compared with three months ended March 31, 2014

(in thousands)	Three months ended
	March 31, 2015		March 31, 2014			Change %
Change in fair value of profit sharing liability	$	12,924	$	(49	)		(26,475.5	)%

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For the three months ended March 31, 2014, we recognized a loss on change in fair value of profit sharing liability of $0.05 million in our loss from operations primarily due to the amortization of the present value discount. The fair value of the profit sharing liability at March 31, 2014 was not materially different from the previous reporting period.

For the three months ended March 31, 2015, we recognized a gain on change in fair value of profit sharing liability of $12.9 million in our loss from operations. The $12.9 million gain comprised of $16.6 million gain associated with the change in present value of estimate of future operating profits as a result of the re-evaluation of our projected operating profit (loss) based on our April actual operating result and the latest Chinese steel industry information in April 2015 which we had lowered our 2015 and 2016 unit selling price and our 2015 sales volume projection as compared to our evaluation at December 31, 2014, which we were expected a higher selling during the second quarter of 2015 as compared to the actual result in April 2015 and through the date of this report, $1.2 million loss from present value discount amortization for the three months ended March 31, 2015, and $2.5 million loss as we lowered 0.25% in the discount rate as the Chinese central bank has lower the borrowing rate of 0.25% on May 11, 2015.

Through the quarterly ended March 31, 2015, we have incurred recurring losses from our operations from the last several years as our steel business has faced very tough market conditions and challenging profitability. Management has continued our effort to implementing cost savings on our manufacturing overhead costs and to reduce our unit production cost. We have forecasted our loss will be continued until year 2017 and expected to make a turning point and become profitable in year 2018 and beyond. Our forecast is based on current market condition, if the future market condition is different from our forecast, we might continue to incur additional loss in 2018 and beyond and our assets pool of our long-lived assets may become impaired.

Loss from Operations

Three months ended March 31, 2015 compared with three months ended March 31, 2014

(in thousands)	Three months ended
	March 31, 2015			March 31, 2014			Change %
Loss from operations	$	(55,712	)	$	(43,663	)		27.6	%

Loss from operations for the three months ended March 31, 2015 was $(55.7) million as compared to $(43.7) million for the same period in 2014. The increase in loss from operations was predominantly due to the increase in gross loss and unallocated overhead expenses.

Other Income (Expense)

Three months ended March 31, 2015 compared with three months ended March 31, 2014

(in thousands)	Three months ended
	March 31, 2015			March 31, 2014			Change %
Interest income	$	2,331		$	3,192			(27.0	)%
Finance/interest expense		(15,377	)		(23,609	)		(34.9	)%
Financing cost on capital lease		(5,193	)		(5,086	)		2.1	%
Gain on disposal of equipment		16			46			(65.2	)%
(Loss) income from equity investment		(37	)		13			(384.6	)%
Foreign currency transaction loss		(873	)		(854	)		2.2	%
Lease income		543			546			(0.5	)%
Other non-operating income (expense), net		223			(176	)		(226.7	)%
Total other expense, net	$	(18,367	)	$	(25,928	)		(29.2	)%

Total other expense, net, for the three months ended March 31, 2015 was $18.4 million, a 29.2% decrease compared to $25.9 million for the same period in 2014. The decrease was mainly a result of the $8.2 million decrease in finance/interest expenses, which was offset by the $0.9 million decrease in interest income along with the decrease in notes receivable. The decrease in finance/interest expenses was mainly a result of the decrease in the amount of bank notes receivable redeemed early and the amount borrowed from banks in the first quarter of 2015 as compared to the same period in 2014. As a result, notes receivable early redemption expenses for the three months ended March 31, 2015 amounted to $8.0 million, a $6.1 million or 43.3% decrease from $14.1 million for the same period in 2014, and interest expense on loan borrowings for the three months ended March 31, 2015 amounted to $7.4 million, a $2.1 million or 22.3% decrease from $9.5 million for the same period in 2014.

Income Taxes

For the three months ended March 31, 2015 and 2014, we had a total tax provision from our profitable subsidiaries of $30 thousand and $5 thousand, respectively. For the three months ended March 31, 2015, we evaluated the deferred tax assets and concluded the net operating loss may not be fully realizable and to provide 100% valuation allowance for the deferred tax assets. No deferred income tax benefit was recorded for the three months ended March 31, 2015 as the resulting deferral of tax assets being fully reserved because the benefit was not considered to be realizable due to recent historical experience.

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For the three months ended March 31, 2015 and 2014, we had effective tax rates of 0.0% and 0.0%, respectively.

Net Loss

Three months ended March 31, 2015 compared with three months ended March 31, 2014

(in thousands)	Three months ended
	March 31, 2015			March 31, 2014			Change %
Net loss	$	(74,109	)	$	(69,596	)		6.5	%

Net Loss attributable to General Steel Holdings, Inc.

Three months ended March 31, 2015 compared with three months ended March 31, 2014

(in thousands)	Three months ended
	March 31, 2015			March 31, 2014			Change %
Net loss	$	(74,109	)	$	(69,596	)		6.5	%
Less: Net loss attributable to the noncontrolling interest		(28,956	)		(26,032	)		11.2	%
Net loss attributable to General Steel Holdings, Inc.	$	(45,153	)	$	(43,564	)		3.6	%

Net loss attributable to us for the three months ended March 31, 2015 was $(45.2) million as compared to $(43.6) million for the same period in 2014. The increase in net loss attributable to us for the three months ended March 31, 2015 was mainly a result of the $9.6 million increase in gross loss and $19.1 million increase in unallocated overheads expenses being offset by the $12.9 million increase in gain from change in fair value of profit sharing liability, the $3.7 million decrease in SG&A expenses and the $8.2 million decrease in finance/interest expenses.

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 March 31, 2015, our current liabilities exceeded the current assets by approximately $1,363.7 million. Given our expected capital expenditure in the foreseeable future, we have comprehensively considered our available sources of funds as follows:

· Financial support and credit guarantee from related parties; and

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

Based on the above considerations, our Board of Directors is of the opinion that we have sufficient funds to meet our working capital requirements and debt obligations as they become due. However, this opinion is based on the demand of our products, economic conditions, the overcapacity issue in the steel industry and our operating results not continuing to deteriorate and on our vendors and related parties being able to provide continued liquidity.  Therefore, as noted in the Liquidity and Going Concern section below, this raises substantial doubt about our ability to continue as a going concern.

As of March 31, 2015, we had cash and restricted cash aggregating $259.6 million, of which $249.8 million was restricted.

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, customer deposits and from other sources. This blended form of financing reduces our reliance on any single source.

Substantially all our operations are conducted in China and all of our revenues are denominated in Renminbi (RMB). RMB is subject to the exchange control regulation in China, and, as a result, we may have difficulty distributing any dividends outside of China due to PRC exchange control regulations that restrict its 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 10.0% of its after-tax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reaches 50.0% of its registered capital. These reserves are not distributable as cash dividends. The board of directors of a foreign-invested enterprise has the discretion to allocate a portion of its after-tax profits to staff welfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation. Under PRC law, RMB is currently convertible into U.S. Dollars under a company’s “current account,” which includes dividends, trade and service-related foreign exchange transactions, without prior approval of the State Administration of Foreign Exchange (SAFE), but is not from a company’s “capital account,” which includes foreign direct investments and loans, without the prior approval of the SAFE.

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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 the dividends distribution 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 on our production lines. In addition to the 1,200,000 metric ton capacity rebar production renovation of an existing 800,000 metric ton capacity rebar production line that we brought online in November 2010, in July 2011, we also brought online a 1,000,000 metric ton capacity high speed wire production line. These two newly installed production lines were both relocated from the Maoming Hengda (as defined below) facility and are expected to consume less energy when running at maximum efficiencies compared to our previous production line. In September 2012 we began the construction of a 900,000 metric ton capacity rebar production line, which was completed and put into 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 lines was completed and put into test production in November 2013. Any future facility expansion will require additional financing and/or equity capital and will be dependent upon the availability of financing arrangements and capital at the time.

Short-term Notes Payable

As of March 31, 2015, we had $448.4 million in short-term notes payable liabilities, which were secured by restricted cash of $222.2 million and restricted notes receivable of $1.6 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 subject 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 March 31, 2015, we had $232.1 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 10 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.

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 12.0% 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 12.0% 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 March 31, 2015 and 2014 amounted to $118.4 million and $230.5 million, respectively, which were eliminated in our consolidated financial statements. The financial cost related to financing sales for the three months ended March 31, 2015 and 2014 amounted to $0.7 million and $0.9 million, respectively.

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 Liquidity and Going Concern

Our accounts have been prepared assuming that we will continue as 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 become due. The steel business is capital intensive and as a normal industry practice in PRC, our 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 our Company. As a result, our debt to equity ratio as of March 31, 2015 and December 31, 2014 were (4.9) and (5.6), respectively. As of March 31, 2015, our current liabilities exceed current assets (excluding deferred lease income) by $1.4 billion, which raises substantial doubt about our ability to continue as a going concern.

Our steel business has faced very tough market conditions and challenging profitability over the last several years, and based on current trends, we think the near-term challenges for the steel sector will likely linger. In reaction to this challenging market, we are proactively reviewing our strategy and asset portfolio and seeking to restructure low-efficient, non-core assets, as well as idle land resources to unlock hidden fair value.

We aim to transform into a leaner and fitter organization with better profitability. As such, we are strategically accelerating our business transformation to pursue opportunities that offer compelling benefits to our organization and shareholders, including:

· First, strengthen our financials while providing the financial flexibility to pursue higher return, higher growth opportunities;

· Second, reduce the complexity of our business structure, which is consistent with our objectives for internal simplification and operating efficiency;

· Third, diversify operating risk in order to lower our high reliance on steel business, while at the same time leverage on our vast vertical resources in the steel industry; and

· Fourth, pursue opportunities for additional value creation.

Management has implemented the following plans that are intended to mitigate the conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern.

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 to come from Longmen Joint Venture. Our ability to continue as a going concern depends heavily on Longmen Joint Venture’s operations. Longmen Joint Venture has obtained different types of financial supports, which include line of credit from banks, vendor financing, financing sales, other financing and sales representative financing.

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

With the financial support from the banks and the companies, 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 March 31, 2016. However, this opinion is based on the demand of our products, economic conditions, the overcapacity issue in the steel industry and our operating results not continuing to deteriorate and on our vendors and related parties being able to provide continued liquidity, as summarized below. The detailed breakdown of Longmen Joint Venture’s estimated cash flows items are listed below.

	Cash inflow (outflow) (in millions)
	For the twelve months  ended March 31, 2016
Current liabilities over current assets (excluding deferred lease income) as of March 31, 2015 (unaudited)	$	(1,361.5	)
Projected cash financing and outflows:
Cash provided by line of credit from banks		142.0
Cash provided by vendor financing		897.1
Cash provided by other financing		412.8
Cash provided by sales representatives		21.9
Cash projected to be used in operations in the twelve months ended March 31, 2016		(39.3	)
Cash projected to be used for financing cost in the twelve months ended March 31, 2016		(46.2	)
Net projected change in cash for the twelve months ended March 31, 2016	$	26.8

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Cash-flow

Operating Activities

Net cash used in operating activities for the three months ended March 31, 2015 and 2014 was $(41.0) million compared to $65.5 million net cash provided by operating activities, respectively. This change was mainly due to the combination of the following factors:

· The impact of some non-cash items included in net loss of $19.0 million for the three months ended March 31, 2015, compared to $29.9 million in the same period in 2014. The non-cash items include the following:

- Depreciation, amortization and depletion;

- Gain on disposal of equipment and intangible assets;

- Provision (recovery) for doubtful accounts;

- Reservation of mine maintenance fee;

- Stock issued for service and compensation;

- Amortization of deferred financing cost on capital lease;

- (Loss) income from equity investments;

- Foreign currency transaction loss;

- Deferred lease income; and

- Change in fair value of profit sharing liability.

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

- Notes receivable: The decrease of notes receivable was mainly due to our acceptance of fewer notes receivables as a substitute for cash receipts during three months ended March 31, 2015;

- Other receivables - related parties: The decrease in other receivables – related parties was mainly due to the increase in business related expenses imbursement and advances returned to the Company with related parties during the three months ended March 31, 2015;

- Inventories: The decrease in inventories during the three months ended March 31, 2015 was mainly due to the decrease in the price of raw materials during the year, which also decreased finished goods cost; However, our finished goods inventory increased by $30.8 million as we intended to hold the finished goods at March 31, 2015 and sell the rebar when we expected the selling price will be recovered at higher selling prices in the second and third quarter of 2015.

- Advance on inventory purchases: The decrease in advance on inventory purchases, mainly due to the decrease in raw material prices leading to less payments being made to suppliers for raw material purchases to meet future production capacity. Advance payment is a prevailing requirement on iron ore purchases in the steel production industry;.

- Accounts payable – related parties: The increase in accounts payable – related parties was mainly due to Longmen Joint Venture paying less to its related party suppliers as compared to the same period in 2014. Pursuant to the supplier financing agreements signed between Longmen Joint Venture and its suppliers, those suppliers agreed not to demand certain cash payment for a period of time under the agreements;

- Other payables – related parties: The increase in other payables – related parties was mainly due to Longmen Joint Venture incurring more miscellaneous payables to related parties during the three months ended March 31, 2015;

- Customer deposits, including related parties: The increase in customer deposits, including related parties was mainly due to more of our customers making prepayment to us prior to March 31, 2015. These deposits were subsequently recognized as sales or net against the corresponding cost goods sold in our trading transactions after March 31, 2015 in accordance with our sales recognition policy; and

- Taxes payable: The increase in taxes payable was mainly due to the VAT taxes payable as less VAT purchase tax was incurred during the three months ended March 31, 2015 to offset the VAT sales tax payable.

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

- Accounts receivable, including related parties: The increase was mainly due to more credit sales to both third parties and related parties were incurred that have not yet been collected for the year ended March 31, 2015 compared with the same period in 2014;

- Other receivables, including related parties: The increase was mainly due to an increase in receivables incurred with third parties and related parties for cash flow purpose for doing business on our behalf;

- Advance on inventory purchases - related parties: The increase was mainly due to more advance payments were made to related parties for raw material purchases for our trading transactions.

- Accounts payable: The decrease in accounts payable was mainly due to Longmen Joint Venture making fewer purchases from third parties during the three months ended March 31, 2015 compared with the same period in 2014. 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; and

- Other payables and accrued liabilities: The decrease in other payables and accrued liabilities was mainly due to an increase in payments for the three months ended March 31, 2015 compared to the same period in 2014.

Investing activities

Net cash provided by investing activities was $96.8 million for the three months ended March 31, 2015 compared to net cash used in investing activities of $(89.6) million for the three months ended March 31, 2014. Fluctuation in cash inflow between the two periods was mainly due to the decrease of restricted cash. Restricted cash was used as a pledge for our notes payable as required by the bank. In the first three months of 2015, such balance decreased because we needed less notes payable to settle with suppliers. The increase in cash inflow was also due to $33.8 million loan repayment from related parties during the three months ended March 31, 2015 and the decrease in spending on equipment and intangible asset purchases during the three months ended March 31, 2015. The increase in cash provided was partially offset by the increase in loan to unrelated parties and short-term investments.

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Financing activities

Net cash used in financing activities was $(57.8) million for the three months ended March 31, 2015 compared to net cash provided by financing activities of $28.9 million for the three months ended March 31, 2014. Compared to the same period in 2014, the decrease of cash inflow from financing activities was mainly driven by the following:

· Notes receivable - restricted: The decrease in notes receivable – restricted was mainly due to less notes receivable was used as guarantee for notes payable and bank loans during the three months ended March 31, 2015; and

· Short term loans – others: We borrowed more from unrelated parties for the three months ended March 31, 2015 compared to the same period in 2014;

· Short term loans – related parties: We borrowed more and repaid fewer loans from related parties for the three months ended March 31, 2015 as compared to the same period in 2014;

· Deposits due to sales representatives: we received more deposits from sales representatives for the three months ended March 31, 2015 compared to the same period in 2014;

· Long-term loans – related party: we borrowed more long-term loans from related party during the three months ended March 31, 2015.

The cash inflow was offset by the following cash outflow:

· Short term notes payable: We repaid more short term notes payable during the three months ended March 31, 2015 compared to the same period in 2014; and

· Short term loans - bank: We repaid more loans from banks for the three months ended March 31, 2015 as they became due compared to the same period in 2014 and borrowed less short term loans from the bank during the quarter.

Impact of Inflation

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

Compliance with Environmental Laws and Regulations

Longmen Joint Venture:

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 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, 0.9 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 $35.6 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 2011, more than $9.6 million (RMB 60 million) was used 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.

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Off-balance Sheet Arrangements

There were no off-balance sheet arrangements for the period ended March 31, 2015 that have or that, in the opinion of management, are likely to have a current or future material effect on our financial condition or results of operations.

Contractual Obligations and Commercial Commitments

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

The following tables summarize our contractual obligations as of March 31, 2015 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	$	448,362	$	448,362	$	-	$	-	$	-
Bank loans		232,148		232,148		-		-		-
Other loans, including related parties		269,392		269,392		-		-		-
Deposits due to sales representatives, including related parties		21,914		21,914		-		-		-
Operating lease commitments		48,521		2,126		3,831		2,412		40,152
Construction obligations - Longmen Joint Venture		9,927		9,927		-		-		-
Long term loan – Shaanxi Steel		352,850				352,850		-		-
Capital lease obligation		406,094		8,678		152,336		26,979		218,101
Profit sharing liability		57,538		-		-		-		57,538
Total	$	1,846,746	$	992,547	$	509,017	$	29,391	$	315,791

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

As of March 31, 2015, Longmen Joint Venture guaranteed bank loans for related parties and third parties, including lines of credit, amounting to $55.4 million, as follows:

Nature of guarantee	Guarantee amount		Guaranty Due Date
	(In thousands)
Line of credit	$	52,274		Various from April 2015 to August 2017
Financing by the rights of goods delivery in future		3,099		June 2015
Total	$	55,373

As of March 31, 2015, we did not accrue any liability for the amount the Group has guaranteed for third and related parties because those parties are current in their payment obligations and we have not experienced any 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.

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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 the accounting principles generally accepted in the United States of America (“U.S. GAAP”).

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

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

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

Consolidation of VIE

Prior to entering into the Unified Management Agreement on April 29, 2011, Longmen Joint Venture had been consolidated as our 60% 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, which we hold 2 out of 4 seats, requires a ¾ majority vote, while the board of directors, which we hold 4 out of 7 seats, requires a simple majority vote. As the Supervisory Committee’s role is limited to supervising and monitoring management of Longmen Joint Venture and in the event there is any disagreement between the board of directors and the Supervisory Committee, the board of directors prevails. In other words, the Supervisory Committee is considered to be subordinate to the board of directors. Thus, the board of directors of Longmen Joint Venture continues to be the controlling decision-making body with respect to Longmen Joint Venture. We control 60% of the voting rights of the board of directors, have control 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.

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.

We believe that the Unified Management Agreement between Longmen Joint Venture and Shaanxi Coal is in compliance with PRC law and is legally enforceable. The board of directors of Longmen Joint Venture continues to be the controlling decision-making body with respect to Longmen Joint Venture. We control 60% of the voting rights of the board of directors and have control over the operations of Longmen Joint Venture. As such, we have the 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.

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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. The assets, liabilities and the operating results of Hualong are immaterial to our consolidated financial statements as for and during the three months ended March 31, 2015 and 2014.

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 our consolidated financial statements as for and during the three months ended March 31, 2015 and 2014.

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 a 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 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 acts as an agent between the suppliers and the customers. The trading arrangements are such that the suppliers are the primary obligators, we do not have any general inventory risk, physical inventory loss risk or credit risk, and we do 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. 

Accounts receivable, other receivables and allowance for doubtful accounts

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

Inventories

Inventories are comprised of raw materials, work in progress and finished goods and are stated at the lower of cost or market using the weighted average cost method. Management reviews inventories for obsolescence and cost in excess of net realizable value at least annually and records a reserve against the inventory and additional cost of goods sold when the carrying value exceeds net realizable value. If our rebar selling price decreased by 10% at March 31, 2015, our finished goods inventories would have been decreased by approximately $3.5 million.

 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.

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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

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

Impairment of long-lived assets

The carrying values of long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Based on the existence of one or more indicators of impairment, we measure any impairment of long-lived assets using the projected 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 March 31, 2015, the fair value of our plant and equipment exceeded our carrying value of these assets by approximately 13.3%. We used the discounted cash flows model to determine the fair value of these assets. 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 believed these assumptions provided us the best estimates of projecting our future cash flows on these assets, net of any related cash outflow of our cost, expenses and taxes in related to these revenues. The estimated fair value of these assets may be lower than their current fair value, thus could result in future impairment charge if potential events occur to further reduce the current selling price or product demand in the steel market or increase our cost 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.

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 lease, the present value of the net minimum lease payments of the capital lease and the fair value of the profit share liability. Actual results could differ from these estimates.

One of our most significant estimates is the determination of fair value of the profit sharing liability. Since the liability is calculated and largely based on management’s expectations of product demand, pricing, raw materials cost and projected manufacturing efficiencies, it is susceptible to material changes when actual results deviate from those expectations. While we believe our current assumptions are reasonable and achievable, there is no assurance that those future expectations will be met or that significant adjustments won’t be required in the future.

Financial instruments

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

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

Fair value measurements

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

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

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

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

We determined that the carrying value of the profit sharing liability using Level 3 inputs by taking consideration of the present value of our projected profits/losses with the discount interest rate of 6.9% based on our average borrowing rate. The projected profits/losses in Longmen Joint Venture were based upon, but not limited to, the following assumptions until April 30, 2031:

· projected selling units and growth in the steel market;

· projected unit selling price in the steel market;

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

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

· projected bank borrowing;

· interest rate index;

· gross nation 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 three months ended March 31, 2015 and 2014. Therefore, no provision for withholding of U.S. federal or state income taxes has been made. The tax impact from undistributed earnings from overseas subsidiaries is not recognized as there is no intention for future repatriation of these earnings.

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

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

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

Energy-saving equipment

During 2013 and 2014, our 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.

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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 pay the additional lease payment based on the additional energy cost saved during the lease period and recognize the additional lease payments as contingent rent expense. For the three months ended March 31, 2015 and 2014, no contingent rent expense has incurred under these lease agreements.

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” in the Notes to Condensed Consolidated Financial Statements for details.

Based on the performance of the Asset Pool, no profit sharing payment, which is not required until net cumulative profits are achieved, was made for three months ended March 31, 2015 and 2014. Payments to Shaanxi Steel for the profit sharing are made based on net cumulative profits.

Recently issued accounting pronouncements

In February 2015, the FASB issued ASU No. 2015-02, Amendments to the Consolidation Analysis. Under both current GAAP requirements and the amendments in this update, a decision maker is determined to be the primary beneficiary of a VIE if it satisfies both the power and the economics criteria. The primary beneficiary consolidates a VIE because it has a controlling financial interest. Under the requirements in current GAAP, if a fee arrangement paid to a decision maker, such as an asset management fee, is determined to be a variable interest in a VIE, the decision maker must include the fee arrangement in its primary beneficiary determination and could consolidate the VIE on the basis of power (decision-making authority) and economics (the fee arrangement). However, the amendments in this Update specify that some fees paid to a decision maker are excluded from the evaluation of the economics criterion if the fees are both customary and commensurate with the level of effort required for the services provided. Those amendments make it less likely for a decision maker to meet the economics criterion solely on the basis of a fee arrangement. The amendments in this update are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. Management is evaluating the impact that will arise from these Amendments.

In April 2015, the FASB issued authoritative guidance on accounting for Interest-Imputation of Interest (Subtopic 835-30); Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). This update requires that debt issuance cost related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts, without changing existing recognition and measurement guidance for debt issuance costs. The new guidance is required to be applied on a retrospective basis and to be accounted for as a change in an accounting principle. The amendments in this update are effective for financial statements issued for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years and early adoption of the amendments in this update is permitted. We will apply early adoption of this standard in the second quarter of 2015. The implementation of this standard will result in the reclassification of certain debt issuance costs from deferred financing cost to a reduction in the carrying amount of the related debt liability within our consolidated balance sheets.

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 March 31, 2015. 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 submits 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 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. During the course of our audit for the year ended December 31, 2014, our auditors proposed numerous audit adjustments related to the control process for our year-end closing. Management concluded that these proposed adjustments (both recorded and waived) are a result of our control deficiencies that represent a material weakness in our financial reporting.

Based on the above material weakness, our Chief Executive Officer and Chief Financial Officer concluded that our Company’s disclosure controls and procedures were not effective as of March 31, 2015.

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 will take and 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.

· We have transitioned from the 1992 COSO framework for internal controls to the 2013 framework, which formalized the principles embedded in the original framework more explicitly, incorporated business and operating environment changes over the past two decades, and improved the framework’s ease of use and application.

· We will implement a number of control procedures related to the control process for our year-end closing for each location to ensure the internal control over financial reporting is proper.

58

Management believes the foregoing efforts should effectively remediate the material weakness described above. However, there is no assurance that even we have taken the remediation actions that our Company’s disclosure controls and procedures will be effective or that other internal control deficiencies will not be identified in future reporting periods.

Despite the existence of the material weaknesses discussed above, our management, including our Chief Executive Officer and Chief Financial Officer, have concluded that the consolidated financials included in this Quarterly Report on Form 10-Q present, in all material aspects, our financial position, results of operations, comprehensive loss and cash flows for the periods presented, in conformity with U.S. GAAP.

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 for the year ended December 31, 2014, which was filed with the SEC on April 10, 2015.

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

None.

59

ITEM 6. EXHIBITS

31.1*	Certification of the CEO (Principal Executive Officer) pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as filed herewith.
31.2*	Certification of the CFO (Principal Financial Officer) pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as filed herewith.
32.1*	Certification of the CEO (Principal Executive Officer) pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as filed herewith.
32.2*	Certification of the CFO (Principal Financial Officer) pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as filed herewith.

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

*Filed herewith.  

60

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: May 20, 2015	By: /s/ Zuosheng Yu
	Zuosheng Yu
	Chief Executive Officer and Chairman
Date: May 20, 2015	By: /s/ John Chen
	John Chen
	Director and Chief Financial Officer

61

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: May 20, 2015	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: May 20, 2015	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 March 31, 2015 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: May 20, 2015	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 March 31, 2015 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: May 20, 2015	By:	/s/ John Chen
		John Chen
		Chief Financial Officer

XML

Debt (Tables)

3 Months Ended

Mar. 31, 2015

Short Term Notes Payable [Member]

Schedule of Short-term Debt [Table Text Block]

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

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
General Steel (China): Notes payable to various banks in China, due June 2015. Restricted cash required of $8.2 million and $14.7 million as of March 31, 2015 and December 31, 2014, respectively; guaranteed by third parties. These notes payable were either repaid or renewed subsequently on the due dates.	$	16,310	$	22,806
Longmen Joint Venture: Notes payable to various banks in China, due various dates from May to October 2015. $214.0 million restricted cash and $1.6 million notes receivable are secured for notes payable as of March 31, 2015, and comparatively $324.7 million restricted cash and $0 notes receivable are secured for notes payable as of December 31, 2014, respectively; some notes are further guaranteed by third parties. These notes payable were either repaid or renewed subsequently on the due dates.		432,052		638,829
Total short-term notes payable	$	448,362	$	661,635

Due To Banks [Member]

Schedule of Short-term Debt [Table Text Block]

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
General Steel (China): Loans from various banks in China, due various dates from June 2015 to January 2016. Weighted average interest rate was 7.3% per annum and 7.2% per annum as of March 31, 2015 and December 31, 2014, respectively; some are guaranteed by third parties. These loans were either repaid or renewed subsequently on the due dates.	$	40,612	$	40,562
Longmen Joint Venture: Loans from various banks in China, due various dates from May to November 2015. Weighted average interest rate was 7.8% per annum and 7.1% per annum as of March 31, 2015 and December 31, 2014, respectively; some are guaranteed by third parties, $27.3 million restricted cash and $66.2 notes receivable and comparatively $16.3 million restricted cash and $111.8 notes receivable were secured for the loans as of March 31, 2015 and December 31, 2014, respectively; These loans were either repaid or renewed subsequently on the due dates.		191,536		216,940
Total short-term loans - bank	$	232,148	$	257,502

Due To Unrelated Parties [Member]

Schedule of Short-term Debt [Table Text Block]

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Longmen Joint Venture: Loans from various unrelated companies and individuals, due various dates from May to September 2015, and weighted average interest rate was 10.2% per annum and 5.7% per annum as of March 31, 2015 and December 31, 2014, respectively. These loans were either repaid or renewed subsequently on the due dates.	$	37,337	$	16,999
Longmen Joint Venture: Loans from financing sales.		8,458		37,525
Maoming Hengda: Loans from one unrelated parties and one related party, due on demand, none interest bearing.		6,200		6,193
Total short-term loans – others	$	51,995	$	60,717

Due To Related Parties [Member]

Schedule of Short-term Debt [Table Text Block]

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
General Steel China: Loans from Yangpu Capital Automobile, due on demand, and interest rates is 10% per annum.	$	670	$	670
General Steel China: Loans from Tianjin Dazhan Industry Co., Ltd, due on demand, and interest rates is 10% per annum.		7,174		-
Longmen Joint Venture: Loan from Shaanxi Coal and Chemical Industry Group Co., Ltd., due on demand, and interest rate is 7.0% per annum.		128		128
Longmen Joint Venture: Loan from Shaanxi Steel Group due on December 2015, and interest rate is 6.9% and 8.0% per annum. The Company repaid $9,489 subsequent to March 31, 2015.		91,173		-
Longmen Joint Venture: Loan from Shaanxi Steel Group Hanzhong Steel Co., Ltd. due on April 2015, and interest rate is 8.0% per annum. Full balance becomes due on demand in April 2015.		8,155		-
Longmen Joint Venture: Loan from Long Steel Group due on April 2015, and interest rate is 12.0% per annum. The Company repaid $4,924 subsequent to March 31, 2015. Remaining balance becomes due on demand.		8,155		-
Longmen Joint Venture: Loan from Tianjin General Qiugang Pipe Co., Ltd due on September 2015, and interest rate is 5.4% per annum.		3,262		-
Longmen Joint Venture: Loans from financing sales.		98,680		45,582
Total short-term loans - related parties	$	217,397	$	46,380

Longmen Joint Venture Loans From Shaanxi Steel Group [Member]

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

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Longmen Joint Venture: Loans from Shaanxi Steel Group, due on various dates through March 2018 and interest rate are 5.6% - 8.0% per annum.	$	352,850	$	339,549

XML

Commitment and contingencies (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015
Operating Leased Assets [Line Items]
Minimum lease payment, 2016	$ 2,126
Minimum lease payment, 2017	1,946
Minimum lease payment, 2018	1,885
Minimum lease payment, 2019	1,206
Minimum lease payment, 2020	1,206
Minimum lease payment, Years after	40,152
Total minimum payments required	$ 48,521

XML

Summary of significant accounting policies (Details 8) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Summary Of Significant Accounting Policies [Line Items]
Profit sharing liability	$ 57,538	$ 70,422
Total	57,538	70,422	162,295
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	57,538	70,422
Total	$ 57,538	$ 70,422

XML

Summary of significant accounting policies (Details 2) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Current liabilities:
Short term notes payable	$ 448,362	$ 661,635
Accounts payable	608,678	612,801
Accounts payable - related parties	226,964	207,783
Short term loans - bank	232,148	257,502
Short term loans - others	51,995	60,717
Short term loans - related parties	217,397	46,380
Other payables and accrued liabilities	51,985	55,488
Other payables - related parties	96,277	87,252
Customer deposits	139,106	92,974
Customer deposits - related parties	148,176	132,616
Deposit due to sales representatives	19,361	17,871
Taxes payable	9,393	5,201
Deferred lease income	2,179	2,176
Capital lease obligations, current	8,678	8,508
Total current liabilities	2,263,252	2,251,413
Non-current liabilities:
Long term loans - related parties	352,850	339,549
Deferred lease income - noncurrent	72,258	72,713
Capital lease obligations, noncurrent	397,416	393,252
Profit sharing liability	57,538	70,422
Total non-current liabilities	880,062	875,936
Total liabilities of consolidated VIE	3,143,314	3,127,349
Variable Interest Entities and Subsidiary [Member]
Current liabilities:
Short term notes payable	432,052	638,829
Accounts payable	596,221	605,025
Accounts payable - related parties	222,595	205,914
Short term loans - bank	191,536	216,940
Short term loans - others	45,795	54,524
Short term loans - related parties	209,553	45,710
Other payables and accrued liabilities	44,286	47,121
Other payables - related parties	69,890	78,615
Customer deposits	129,896	87,372
Customer deposits - related parties	43,654	34,895
Deposit due to sales representatives	19,361	17,871
Deposit due to sales representatives - related parties	2,553	2,509
Taxes payable	8,192	4,026
Deferred lease income	2,179	2,176
Capital lease obligations, current	8,678	8,508
Intercompany payable to be eliminated	13,778	20,155
Total current liabilities	2,040,219	2,070,190
Non-current liabilities:
Long term loans - related parties	352,850	339,549
Deferred lease income - noncurrent	72,258	72,713
Capital lease obligations, noncurrent	397,416	393,252
Profit sharing liability	57,538	70,422
Total non-current liabilities	880,062	875,936
Total liabilities of consolidated VIE	$ 2,920,281	$ 2,946,126

XML

Advances on inventory purchases (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Advances on inventory purchases [Line Items]
Ending balance	$ 2,504	$ 2,501
Advances On Inventory Purchases [Member]
Advances on inventory purchases [Line Items]
Beginning balance	2,501	105
Charge to expense	0	2,395
Exchange rate effect	3	1
Ending balance	$ 2,504	$ 2,501

XML

Summary of significant accounting policies (Details 9) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Summary Of Significant Accounting Policies [Line Items]
Beginning balance	$ 70,422	$ 162,295
Change in fair value of profit sharing liability:
Change in preset value of estimate of future operating profits	(16,569)	(110,589)
Change in discount rate	2,454	8,106
Interest expense - present value discount amortization	1,220	11,544
Difference between the previously estimated operating results for the current period and actual results	0	(79)
Exchange rate effect	11	(855)
Ending balance	$ 57,538	$ 70,422

XML

Debt (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Short term notes payable	$ 448,362	$ 661,635
General Steel China Notes Payable To China Agricultural Bank [Member]
Debt Instrument [Line Items]
Short term notes payable	16,310	22,806
Longmen Joint Venture Notes Payable To Various Banks In China [Member]
Debt Instrument [Line Items]
Short term notes payable	$ 432,052	$ 638,829

XML

Related party transactions and balances (Details 9) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015		Dec. 31, 2014
Related Party Transaction [Line Items]
Other payables - related parties	$ 96,277		$ 87,252
Tianjin Hengying Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Partially owned by CEO through indirect shareholding	[1]
Other payables - related parties	378		378
Long Steel Group [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture
Other payables - related parties	28,277		33,968
Shaanxi Steel [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Majority shareholder of Long Steel Group
Other payables - related parties	27,745		44,146
Wendlar Investment Management Group Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Common control under CEO
Other payables - related parties	1,180		1,196
Yangpu Capital Automobile [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Partially owned by CEO through indirect shareholding
Other payables - related parties	416		399
Tianjin Dazhan Industry Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Partially owned by CEO through indirect shareholding	[1]
Other payables - related parties	3,750		3,883
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	157		2,775
Shaanxi Shenganda Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Significant influence by Long Steel Group
Other payables - related parties	13,350		0
Teamlink Investment Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Partially owned by CEO through indirect shareholding
Other payables - related parties	20,500		0
Others [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Entities either owned or have significant influence by our affiliates or management
Other payables - related parties	$ 524		$ 507

[1] The Company reclassified advances for inventory purchase - related parties related to trading transactions, as noted in note 2(g), to loans receivable - related parties due to their interest-bearing nature.

XML

Summary of significant accounting policies (Details)	3 Months Ended
	Mar. 31, 2015	Apr. 29, 2011
Summary Of Significant Accounting Policies [Line Items]
Equity Method Investment, Ownership Percentage	20.00%
General Steel Investment Co., Ltd. [Member]
Summary Of Significant Accounting Policies [Line Items]
Entity Incorporation, State Country Name	British Virgin Islands
Equity Method Investment, Ownership Percentage	100.00%
General Steel (China) Co., Ltd. ("General Steel (China)") [Member]
Summary Of Significant Accounting Policies [Line Items]
Entity Incorporation, State Country Name	PRC
Equity Method Investment, Ownership Percentage	100.00%
Tianjin General Shengyuan IoT Technology Co., Ltd. (“General Shengyuan”) [Member]
Summary Of Significant Accounting Policies [Line Items]
Entity Incorporation, State Country Name	PRC
Equity Method Investment, Ownership Percentage	70.00%
Yangpu Shengtong Investment Co., Ltd. ("Yangpu Shengtong") [Member]
Summary Of Significant Accounting Policies [Line Items]
Entity Incorporation, State Country Name	PRC
Equity Method Investment, Ownership Percentage	99.10%
Tianjin Qiu Steel Investment Co., Ltd. ("Qiu Steel") [Member]
Summary Of Significant Accounting Policies [Line Items]
Entity Incorporation, State Country Name	PRC
Equity Method Investment, Ownership Percentage	98.70%
Longmen Joint Venture [Member]
Summary Of Significant Accounting Policies [Line Items]
Entity Incorporation, State Country Name	PRC
Equity Method Investment, Ownership Percentage	60.00%	60.00%
Maoming Hengda Steel Company, Ltd. ("Maoming Hengda") [Member]
Summary Of Significant Accounting Policies [Line Items]
Entity Incorporation, State Country Name	PRC
Equity Method Investment, Ownership Percentage	99.00%

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

3 Months Ended

Mar. 31, 2015

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:  

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Accounts receivable	$	11,194	$	9,804
Less: allowance for doubtful accounts		(508)		(483)
Accounts receivable – related parties		59,183		8,624
Less: allowance for doubtful accounts – related parties		(126)		(126)
Net accounts receivable	$	69,743	$	17,819

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

Movement of allowance for doubtful accounts is as follows:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Beginning balance	$	609	$	1,053
Charge to expense		25		368
Less: recovery		-		(8)
Deconsolidation of Baotou Steel		-		(798)
Exchange rate effect		-		(6)
Ending balance	$	634	$	609

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Debt (Details 1) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Short term loans - bank	$ 232,148	$ 257,502
General Steel China Loans From Various Banks In China [Member]
Debt Instrument [Line Items]
Short term loans - bank	40,612	40,562
Longmen Joint Venture Loans from various banks in China [Member]
Debt Instrument [Line Items]
Short term loans - bank	$ 191,536	$ 216,940

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Plant and equipment, net (Details 2) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Property, Plant and Equipment [Line Items]
Machinery	$ 627,505	$ 626,735
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Machinery	627,505	626,735
Less: accumulated depreciation	(116,075)	(107,782)
Carrying value of leased assets	$ 511,430	$ 518,953

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Capital lease obligations (Details Textual) In Millions, unless otherwise specified	3 Months Ended		1 Months Ended	3 Months Ended
	Mar. 31, 2015 USD ($)	Mar. 31, 2014 USD ($)	Apr. 29, 2011 Shaanxi Iron and Steel Group [Member]	Mar. 31, 2015 Shaanxi Iron and Steel Group [Member] USD ($)	Mar. 31, 2015 Shaanxi Iron and Steel Group [Member] CNY	Mar. 31, 2015 Energy Saving Equipment [Member] USD ($)	Mar. 31, 2015 Energy Saving Equipment [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%
Unified Management Agreement, Cost Of Asset				$ 2.3	14.6
Interest Expense On Minimum Lease Payments	5.2	5.4
Capital Lease Obligations Incurred						$ 23.9	146.5

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Summary of significant accounting policies (Details 11) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
General Steel (China) [Member]
Summary Of Significant Accounting Policies [Line Items]
Original Cost	$ 3,870
Expires on	2050 & 2053
Longmen Joint Venture [Member]
Summary Of Significant Accounting Policies [Line Items]
Original Cost	24,187
Expires on	2048 & 2052
Maoming Hengda [Member]
Summary Of Significant Accounting Policies [Line Items]
Original Cost	$ 2,706
Expires on	2054

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Related party transactions and balances (Details Textual) In Millions, unless otherwise specified	3 Months Ended		12 Months Ended		3 Months Ended
	Mar. 31, 2015 USD ($)	Mar. 31, 2014 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY	Mar. 31, 2015 Shaanxi Steel [Member] USD ($)	Mar. 31, 2014 Shaanxi Steel [Member] USD ($)	Mar. 31, 2015 Tianwu General Steel Material Trading Co Ltd [Member] USD ($)	Mar. 31, 2014 Tianwu General Steel Material Trading Co Ltd [Member] USD ($)
Related Party Transaction [Line Items]
Related Party Loans Secured	$ 49.0		$ 82.3
Capital Leases, Income Statement, Lease Revenue	0.5	0.5			0.5	0.5
Cost Of Goods Sold From Related Parties	91.0	33.3
Payment For Purchase Advances							61.9	29.5
Inventory Sold Under Purchase Agreement							16.0	1.4
Proceeds From Related Party Deposits	6.7	71.8	104.0	600.0
Purchase Obligation							$ 3.3	$ 4.3

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Intangible assets, net (Details 1) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Estimated amortization and depletion expenses, March 31, 2016	$ 946
Estimated amortization and depletion expenses, March 31, 2017	946
Estimated amortization and depletion expenses, March 31, 2018	946
Estimated amortization and depletion expenses, March 31, 2019	946
Estimated amortization and depletion expenses, March 31, 2020	946
Estimated amortization and depletion expenses, Thereafter	18,155
Estimated amortization and depletion expenses, Total	22,885	22,960
Gross carrying amount, March 31, 2016	21,939
Gross carrying amount, March 31, 2017	20,993
Gross carrying amount, March 31, 2018	20,047
Gross carrying amount, March 31, 2019	19,101
Gross carrying amount, March 31, 2020	18,155
Gross carrying amount, Thereafter	$ 0

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Supplemental disclosure of cash flow information (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Supplemental Disclosure Of Cash Flow Information [Line Items]
Interest Paid, Net	$ 2.6	$ 5.7
Income Taxes Paid	0.10	0.01
Dividend Receivables Value		0.2
Disposal Of Equipment Value		0.01
Inventory Productions, Equipment Conversion	0.03	0.05
Inventory Utilized In Plant and Equipment Construction	0.9	1.0
Repayment Of Accounts Payable Related Party	5.9
Construction in Progress Expenditures Incurred but Not yet Paid	2.8	23.4
Notes Receivable Converted To Cash	$ 23.8	$ 47.7

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Debt (Details 3) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Short term loans - related parties	$ 217,397	$ 46,380
General Steel China Loans From Yangpu Capital Automobile [Member]
Debt Instrument [Line Items]
Short term loans - related parties	670	670
General Steel China Loans From Tianjin Dazhan Industry Co Ltd [Member]
Debt Instrument [Line Items]
Short term loans - related parties	7,174	0
Longmen Joint Venture Loan from Shaanxi Coal and Chemical Industry Group Co Ltd [Member]
Debt Instrument [Line Items]
Short term loans - related parties	128	128
Longmen Joint Venture Loan From Shaanxi Steel Group [Member]
Debt Instrument [Line Items]
Short term loans - related parties	91,173	0
Longmen Joint Venture Loan from Shaanxi Steel Group Hanzhong Steel Co., Ltd. [Member]
Debt Instrument [Line Items]
Short term loans - related parties	8,155	0
Longmen Joint Venture Loan from Long Steel Group [Member]
Debt Instrument [Line Items]
Short term loans - related parties	8,155	0
Longmen Joint Venture Loan from Tianjin General Qiugang Pipe Co., Ltd [Member]
Debt Instrument [Line Items]
Short term loans - related parties	3,262	0
Longmen Joint Venture Loans From Financing Sales [Member]
Debt Instrument [Line Items]
Short term loans - related parties	$ 98,680	$ 45,582

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Deferred lease income (Details Textual)	3 Months Ended		12 Months Ended		3 Months Ended		10 Months Ended		12 Months Ended
	Mar. 31, 2015 USD ($)	Mar. 31, 2014 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2010 Longmen Joint Venture [Member] USD ($)	Dec. 31, 2010 Longmen Joint Venture [Member] CNY	Mar. 31, 2011 Longmen Joint Venture [Member] USD ($)	Mar. 31, 2011 Longmen Joint Venture [Member] CNY	Dec. 31, 2011 Longmen Joint Venture [Member] USD ($)	Dec. 31, 2011 Longmen Joint Venture [Member] CNY	Dec. 31, 2010 Longmen Joint Venture [Member] USD ($)	Dec. 31, 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					29,900,000	183,100,000
Deferred Revenue Leases Reimbursement For Trial Production Costs									14,600,000	89,300,000	14,600,000	89,500,000
Deferred Revenue Leases Deferred Depreciation Cost Free Use Period							7,200,000	43,900,000
Deferred Revenue Leases Lease Income Realized	543,000	546,000	2,176,000
Deferred Revenue, Leases, Net, Total	74,437,000		74,889,000	77,444,000
Deferred Revenue, Leases, Current	$ 2,179,000		$ 2,176,000

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Intangible assets, net (Details Textual) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	32 years 6 months
Amortization of Intangible Assets	$ 200,000	$ 200,000
Depletion	40,000	10,000
Finite-Lived Intangible Assets, Gross	$ 34,272,000		$ 34,231,000

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Plant and equipment, net (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Property, Plant and Equipment [Line Items]
Buildings and improvements	$ 437,477	$ 279,776
Machinery	887,292	669,427
Machinery under capital lease	627,505	626,735
Transportation and other equipment	23,101	22,765
Construction in progress	9,835	342,660
Subtotal	1,985,210	1,941,363
Less: accumulated depreciation	(423,699)	(398,227)
Total	$ 1,561,511	$ 1,543,136

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Retirement plan

3 Months Ended

Mar. 31, 2015

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 March 31, 2015 and 2014 amounted to $2.8 million and $2.8 million, respectively.

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Summary of significant accounting policies (Details 4) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Summary Of Significant Accounting Policies [Line Items]
Amount of Line of Credit	$ 142.0
China Everbright Bank [Member]
Summary Of Significant Accounting Policies [Line Items]
Amount of Line of Credit	19.6
Repayment Date	Jan. 21, 2016	[1]
Huaxia Bank [Member]
Summary Of Significant Accounting Policies [Line Items]
Amount of Line of Credit	24.5
Repayment Date	Jan. 30, 2016	[1]
Bank Of Xian [Member]
Summary Of Significant Accounting Policies [Line Items]
Amount of Line of Credit	16.3
Repayment Date	Feb. 04, 2016	[1]
Bank Of Beijing [Member]
Summary Of Significant Accounting Policies [Line Items]
Amount of Line of Credit	$ 81.6
Repayment Date	Oct. 14, 2016

[1] Management expects the lines of credit will be extended after the repayment dates.

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Related party transactions and balances (Tables)

3 Months Ended

Mar. 31, 2015

Schedule of Capital Leased Assets [Table Text Block]

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

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Machinery	$	627,505	$	626,735
Less: accumulated depreciation		(116,075)		(107,782)
Carrying value of leased assets	$	511,430	$	518,953

Schedule Of Related Party Sales [Table Text Block]

The following chart summarized sales to related parties for the three months ended March 31, 2015 and 2014. 

Name of related parties	Relationship	Three months ended March 31, 2015		Three months ended March 31, 2014
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	11,270	$	44,800
Shaanxi Haiyan Trade Co., Ltd	Significant influence by Long Steel Group*		9,578		15
Shaanxi Shenganda Trading Co., Ltd	Significant influence by Long Steel Group		15,998		20,736
Shaanxi Steel	Majority shareholder of Long Steel Group		481		471
Shaanxi Coal and Chemical Industry Group Co., Ltd.	Shareholder of Shaanxi Steel		20,068		4,969
Shaanxi Long Steel Group Baoji Steel Rolling Co., Ltd	Subsidiary of Long Steel Group		-		6,618
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		-		4,597
Total		$	57,395	$	82,206

*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.

Schedule Of Related Party Purchases [Table Text Block]

The following charts summarize purchases from related parties for the three months ended March 31, 2015 and 2014.

Name of related parties	Relationship	Three months ended March 31, 2015		Three months ended March 31, 2014
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	5,993	$	151,772
Hancheng Haiyan Coking Co., Ltd	Noncontrolling shareholder of Long Steel Group		48,147		44,088
Xi’an Pinghe Metallurgical Raw Material Co., Ltd	Noncontrolling shareholder of Long Steel Group		1,072		904
Shaanxi Coal and Chemical Industry Group Co., Ltd	Shareholder of Shaanxi Steel		1,505		-
Shaanxi Huafu New Energy Co., Ltd	Significant influence by the Long Steel Group		5,960		6,660
Tianwu General Steel Material Trading Co., Ltd.	Investee of General Steel (China)		36,174		23,339
Tianjin General Quigang Pipe Co., Ltd	Partially owned by CEO through indirect shareholding**		3,287		4,275
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		-		27,919
Others	Entities either owned or have significant influence by our affiliates or management		331		47
Total		$	102,469	$	259,004

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

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

Loans receivable – related parties:

Name of related parties	Relationship	March 31, 2015		December 31, 2014
		(in thousands)		(in thousands)
Tianjin Hengying Trading Co., Ltd.*	Partially owned by CEO through indirect shareholding	$	622	$	13,997
Tianjin Dazhan Industry Co., Ltd.*	Partially owned by CEO through indirect shareholding		-		14,617
Beijing Shenghua Xinyuan Metal Materials Co., Ltd.	Partially owned by CEO through indirect shareholding		6,106		6,099
Total		$	6,728	$	34,713

*The Company reclassified advances for inventory purchase - related parties related to trading transactions, as noted in note 2(g), to loans receivable - related parties due to their interest-bearing nature.

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

Accounts receivables – related parties:

Name of related parties	Relationship	March 31, 2015		December 31, 2014
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	151	$	148
Shaanxi Coal and Chemical Industry Group Co., Ltd.	Shareholder of Shaanxi Steel		56,982		-
Shaanxi Shenganda Trading Co., Ltd.	Significant influence by Long Steel Group		-		5,715
Tianjin Daqiuzhuang Steel Plates	Partially owned by CEO through indirect shareholding		19		19
Shaanxi Steel	Majority shareholder of Long Steel Group		2,031		2,101
Others			-		641
Total		$	59,183	$	8,624

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	March 31, 2015		December 31, 2014
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	1,219	$	165
Shaanxi Steel	Majority shareholder of Long Steel Group		1,141		35,669
Tianjin General Quigang Pipe Co., Ltd*	Partially owned by CEO through indirect shareholding		17,939		1,237
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		927		721
Beijing Shenghua Xinyuan Metal Materials Co., Ltd.	Partially owned by CEO through indirect shareholding		466		313
Victory Energy Resource Co., Ltd.	Partially owned by CEO through indirect shareholding		1,101		1,101
Others	Entities either owned or have significant influence by our affiliates or management		350		528
Total		$	23,143	$	39,734

^* Full balance has been repaid subsequently to March 31, 2015 by this entity.

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	March 31, 2015		December 31, 2014
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	7,269	$	7,139
Shaanxi Shenganda Trading Co., Ltd.	Significant influence by Long Steel Group		-		27,549
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		3,873		3,807
Tianjin General Qiugang Pipe Co., Ltd*	Partially owned by CEO through indirect shareholding		84,547		7,091
Others	Entities either owned or have significant influence by our affiliates or management		68		31
Total		$	95,757	$	45,617

^*During the three months ended March 31, 2015, the Company entered into a purchase agreement with this entity to purchase steel related products to resell to Tianwu General Steel Material Trading Co., Ltd. (see Note 19 (h) Customer deposit – related parties). The term of the agreement is expected to be fulfilled within three months after deposits were made. The purchase advances are refundable. For the three months ended March 31, 2015, the Company made $61.9 million of purchase advances of which $3.3 million were utilized. The entity also acts as a customer in the Company’s trading transactions. During the three months ended March 31, 2015, the Company sold approximately $16.0 million to this entity. For the three months ended March 31, 2014, the Company made $29.5 million of purchase advances of which $4.3 million was utilized. The entity also acts as a customer in the Company’s trading transactions. During the three months ended March 31, 2014, the Company sold $1.4 million to this entity.

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

Accounts payable - related parties:

Name of related parties	Relationship	March 31, 2015		December 31, 2014
		(in thousands)		(in thousands)
Hancheng Haiyan Coking Co., Ltd	Noncontrolling shareholder of Longmen Joint Venture	$	77,617	$	64,276
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		94,006		79,886
Shaanxi Coal and Chemical Industry Group Co., Ltd.	Shareholder of Shaanxi Steel		14,828		23,726
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		870		869
Xi’an Pinghe Metallurgical Raw Material Co., Ltd	Noncontrolling shareholder of Long Steel Group		10,829		11,035
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		-		1
Henan Xinmi Kanghua Fire Refractory Co., Ltd	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		1,002		746
Beijing Daishang Trading Co., Ltd	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		28		36
Tianjin General Qiugang Pipe Co., Ltd	Partially owned by CEO through indirect shareholding		-		2,462
Tianwu General Steel Material Trading Co., Ltd.	Investee of General Steel (China)		7,986		22,916
Maoming Shengze Trading Co., Ltd	Partially owned by CEO through indirect shareholding		4,274		1,773
Shaanxi Steel	Majority shareholder of Long Steel Group		683		-
Shaanxi Shenganda Trading Co, Ltd.	Significant influence by Long Steel Group		14,834		-
Others	Entities either owned or have significant influence by our affiliates or management		7		57
Total		$	226,964	$	207,783

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

Short-term loans - related parties:

Name of related parties	Relationship	March 31, 2015		December 31, 2014
		(in thousands)		(in thousands)
Shaanxi Steel Group Hanzhong Steel Co., Ltd.	Subsidiary of Shaanxi Steel	$	8,155	$	-
Shaanxi Steel	Majority shareholder of Long Steel Group		91,173		-
Shaanxi Coal and Chemical Industry Group Co., Ltd	Shareholder of Shaanxi Steel		68,754		34,460
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		30,533		-
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		7,610		3,039
Tianjin General Quigang Pipe Co., Ltd.	Partially owned by CEO through indirect shareholding		3,262
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		7,240		8,211
Yangpu Capital Automobile	Partially owned by CEO through indirect shareholding		670		670
Total		$	217,397	$	46,380

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

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	March 31, 2015		December 31, 2014
		(in thousands)		(in thousands)
Tianjin Hengying Trading Co, Ltd	Partially owned by CEO through indirect shareholding	$	378	$	378
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		28,277		33,968
Shaanxi Steel	Majority shareholder of Long Steel Group		27,745		44,146
Wendlar Investment & Management Group Co., Ltd	Common control under CEO		1,180		1,196
Yangpu Capital Automobile	Partially owned by CEO through indirect shareholding		416		399
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		3,750		3,883
Maoming Shengze Trading Co., Ltd	Partially owned by CEO through indirect shareholding		157		2,775
Shaanxi Shenganda Trading Co., Ltd.	Significant influence by Long Steel Group		13,350		-
Teamlink Investment Co., Ltd	Partially owned by CEO through indirect shareholding		20,500		-
Others	Entities either owned or have significant influence by our affiliates or management		524		507
Total		$	96,277	$	87,252

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

Customer deposits – related parties:

Name of related parties	Relationship	March 31, 2015		December 31, 2014
		(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		7,414		4,467
Shaanxi Haiyan Trade Co, Ltd	Significant influence by Long Steel Group		5,391		6,844
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		28,863		23,517
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		16		57
Shaanxi Shenganda Trading Co., Ltd	Significant influence by Long Steel Group		1,960		-
Tianwu General Steel Material Trading Co., Ltd.*	Investee of General Steel (China)		104,522		97,721
Total		$	148,176	$	132,616

^*This entity is one of the Company’s trading partners and sells or purchases the steel related products to or from the Company.  During three months ended March 31, 2015 and 2014, the Company received   $6.7 million and $71.8 million of deposits from this entity, of which, no trading sales transactions were utilized. During the year ended December, 31 2014 and the first quarter of 2015, the Company received a total deposits of RMB 600 million (approximately $104.0 million) from this entity. The deposits are refundable.

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	March 31, 2015		December 31, 2014
		(in thousands)		(in thousands)
Hancheng Haiyan Trade Co., Ltd	Significant influence by Long Steel Group	$	652	$	652
Gansu Yulong Trading Co., Ltd.	Significant influence by Long Steel Group		1,076		1,075
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		196		196
Shaanxi Yuchang Trading Co., Ltd	Significant influence by Long Steel Group		587		586
Shaanxi Junlong Rolling Co., Ltd.	Investee of Long Steel Group		42		-
Total		$	2,553	$	2,509

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

Long-term loans – related party:

Name of related party	Relationship	March 31, 2015		December 31, 2014
		(in thousands)		(in thousands)
Shaanxi Steel	Majority shareholder of Long Steel Group	$	352,850	$	339,549
Total		$	352,850	$	339,549

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

Deferred lease income

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Beginning balance	$	74,889	$	77,444
Less: Lease income realized		(544)		(2,176)
Exchange rate effect		92		(379)
Ending balance		74,437		74,889
Current portion		(2,179)		(2,176)
Noncurrent portion	$	72,258	$	72,713

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:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Machinery	$	603,618	$	602,878
Less: accumulated depreciation		(112,298)		(105,001)
Carrying value of leased assets	$	491,320	$	497,877

XML

Intangible assets, net (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	$ 34,272	$ 34,231
Less: Accumulated amortization	(11,387)	(11,271)
Intangible assets, net	22,885	22,960
Land use rights [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	30,763	30,726
Less: Accumulated amortization	(9,308)	(9,127)
Mining right [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	2,450	2,447
Less: Accumulated amortization	(1,339)	(1,431)
Software [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	1,059	1,058
Less: Accumulated amortization	$ (740)	$ (713)

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Related party transactions and balances (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015		Mar. 31, 2014
Related Party Transaction [Line Items]
Related Party Transaction, Purchases from Related Party	$ 102,469		$ 259,004
Long Steel Group [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture
Related Party Transaction, Purchases from Related Party	5,993		151,772
Hancheng Haiyan Coking Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Long Steel Group
Related Party Transaction, Purchases from Related Party	48,147		44,088
Xi'an Pinghe Metallurgical Raw Material Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Long Steel Group
Related Party Transaction, Purchases from Related Party	1,072		904
Shaanxi Coal and Chemical Industry Group Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Shareholder of Shaanxi Steel
Related Party Transaction, Purchases from Related Party	1,505		0
Shaanxi Huafu New Energy Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Significant influence by the Long Steel Group
Related Party Transaction, Purchases from Related Party	5,960		6,660
Tianwu General Steel Material Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Investee of General Steel (China)	[1]
Related Party Transaction, Purchases from Related Party	36,174		23,339
Tianjin General Qiugang Pipe Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Partially owned by CEO through indirect shareholding	[2],[3]
Related Party Transaction, Purchases from Related Party	3,287	[3]	4,275	[3]
Tianjin Hengying Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Partially owned by CEO through indirect shareholding	[4]
Related Party Transaction, Purchases from Related Party	0		27,919
Others [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Entities either owned or have significant influence by our affiliates or management
Related Party Transaction, Purchases from Related Party	$ 331		$ 47

[1] This entity is one of the Company’s trading partners and sells or purchases the steel related products to or from the Company. During three months ended March 31, 2015 and 2014, the Company received $6.7 million and $71.8 million of deposits from this entity, of which, no trading sales transactions were utilized. During the year ended December, 31 2014 and the first quarter of 2015, the Company received a total deposits of RMB 600 million (approximately $104.0 million) from this entity. The deposits are refundable.

[2] During the three months ended March 31, 2015, the Company entered into a purchase agreement with this entity to purchase steel related products to resell to Tianwu General Steel Material Trading Co., Ltd. (see Note 19 (h) Customer deposit – related parties). The term of the agreement is expected to be fulfilled within three months after deposits were made. The purchase advances are refundable. For the three months ended March 31, 2015, the Company made $61.9 million of purchase advances of which $3.3 million were utilized. The entity also acts as a customer in the Company’s trading transactions. During the three months ended March 31, 2015, the Company sold approximately $16.0 million to this entity. For the three months ended March 31, 2014, the Company made $29.5 million of purchase advances of which $4.3 million was utilized. The entity also acts as a customer in the Company’s trading transactions. During the three months ended March 31, 2014, the Company sold $1.4 million to this entity.

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

[4] The Company reclassified advances for inventory purchase - related parties related to trading transactions, as noted in note 2(g), to loans receivable - related parties due to their interest-bearing nature.

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Plant and equipment, net (Tables)

3 Months Ended

Mar. 31, 2015

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

Plant and equipment consist of the following:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Buildings and improvements	$	437,477	$	279,776
Machinery		887,292		669,427
Machinery under capital lease		627,505		626,735
Transportation and other equipment		23,101		22,765
Construction in progress		9,835		342,660
Subtotal		1,985,210		1,941,363
Less: accumulated depreciation		(423,699)		(398,227)
Total	$	1,561,511	$	1,543,136

Schedule Of Construction In Progress [Table Text Block]

Construction in progress consisted of the following as of March 31, 2015:

Construction in progress	Value		Completion	Estimated additional cost to complete
description	(In thousands)		date	(In thousands)
Restructuring of ventilation system		2	December 2015		979
Energy management system		326	April 2015		1,925
Reconstruction of miscellaneous factory buildings		6,959	December 2015		7,023
Project materials		2,145			-
Others		403			-
Total	$	9,835		$	9,927

Schedule of Capital Leased Assets [Table Text Block]

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

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Machinery	$	627,505	$	626,735
Less: accumulated depreciation		(116,075)		(107,782)
Carrying value of leased assets	$	511,430	$	518,953

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Summary of significant accounting policies (Details 6) (Other Financing [Member], USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Summary Of Significant Accounting Policies [Line Items]
Financing Amount	$ 412.8
Company D [Member]
Summary Of Significant Accounting Policies [Line Items]
Financing Amount	81.6
Financing period covered	April 22, 2014 – April 22, 2017
Company E [Member]
Summary Of Significant Accounting Policies [Line Items]
Financing Amount	86.4
Financing period covered	April 23, 2014 – April 23, 2017
Company F [Member]
Summary Of Significant Accounting Policies [Line Items]
Financing Amount	81.6
Financing period covered	April 22, 2014 – April 22, 2017
Company G [Member]
Summary Of Significant Accounting Policies [Line Items]
Financing Amount	81.6
Financing period covered	April 30, 2015 – April 30, 2018
Company H [Member]
Summary Of Significant Accounting Policies [Line Items]
Financing Amount	$ 81.6
Financing period covered	April 30, 2015 – April 30, 2018

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Inventories (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Inventory [Line Items]
Beginning balance	$ 18,375	$ 15,397
Addition	12,581	18,362
Less: write-off	(18,329)	(15,311)
Exchange rate effect	0	(73)
Ending balance	$ 12,627	$ 18,375

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Statutory reserves (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Contributions To Statutory Reserve Fund Percentage	10.00%
Maximum Percentage Of Reserve Fund Balance	50.00%
Minimum Percentage Of Reserve Fund Balance	25.00%
Contributions To Special Reserve	$ 0.2	$ 0.3
Utilization Of Special Reserve	$ 0.04	$ 0.10

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Loans receivable (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Related Party Transaction [Line Items]
Interest Income Related Party	$ 0.5	$ 0.1
Long Steel Group [Member]
Related Party Transaction [Line Items]
Loans Receivable Maturity Date	due on demand
Loans Receivable Interest Rate Stated Percentage	8.00%
Tianjin Hengying Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Loans Receivable Maturity Date	due on demand
Loans Receivable Interest Rate Stated Percentage	10.00%
Tianjin Dazhan Industry Co Ltd [Member]
Related Party Transaction [Line Items]
Loans Receivable Maturity Date	due on demand
Loans Receivable Interest Rate Stated Percentage	10.00%
Beijing Shenghua Xinyuan Metal Materials Co Ltd [Member]
Related Party Transaction [Line Items]
Loans Receivable Maturity Date	due on demand
Loans Receivable Interest Rate Stated Percentage	10.00%

XML

Summary of significant accounting policies (Details 1) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Summary Of Significant Accounting Policies [Line Items]
Current assets	$ 899,586	$ 970,409
Plant and equipment, net	1,561,511	1,543,136
Total assets	2,506,409	2,565,224
Total liabilities	(3,143,314)	(3,127,349)
Variable Interest Entities and Subsidiary [Member]
Summary Of Significant Accounting Policies [Line Items]
Current assets	726,110	837,135
Plant and equipment, net	1,557,027	1,537,687
Other noncurrent assets	27,024	33,396
Total assets	2,310,161	2,408,218
Total liabilities	(2,920,281)	(2,946,126)
Net liabilities	$ (610,120)	$ (537,908)

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Accounts receivable (including related parties), net

3 Months Ended

Mar. 31, 2015

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:  

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Accounts receivable	$	11,194	$	9,804
Less: allowance for doubtful accounts		(508)		(483)
Accounts receivable – related parties		59,183		8,624
Less: allowance for doubtful accounts – related parties		(126)		(126)
Net accounts receivable	$	69,743	$	17,819

Movement of allowance for doubtful accounts is as follows:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Beginning balance	$	609	$	1,053
Charge to expense		25		368
Less: recovery		-		(8)
Deconsolidation of Baotou Steel		-		(798)
Exchange rate effect		-		(6)
Ending balance	$	634	$	609

XML

Segments (Details) (USD $)	3 Months Ended
	Mar. 31, 2015		Mar. 31, 2014		Dec. 31, 2014
Sales:
TOTAL SALES	$ 328,164,000		$ 594,211,000
Gross profit:
GROSS PROFIT	(32,147,000)		(22,561,000)
Income (loss) from operations:
INCOME (LOSS) FROM OPERATIONS	(55,712,000)		(43,663,000)
Net income (loss) attributable to General Steel Holdings, Inc.:
NET LOSS ATTRIBUTABLE TO GENERAL STEEL HOLDINGS, INC.	(45,153,000)		(43,564,000)
Depreciation and amortization:
Depreciation, amortization and depletion	25,164,000		24,346,000
Finance/interest expenses:
FINANCE/INTEREST EXPENSES	20,570,000		28,695,000
Capital expenditures:
Equipment purchase and intangible assets	31,589,000		56,861,000
ASSETS
TOTAL ASSETS	2,506,409,000				2,565,224,000
Operating Segments [Member]
Sales:
TOTAL SALES	328,164,000		594,265,000
Gross profit:
GROSS PROFIT	(32,147,000)		(22,561,000)
Income (loss) from operations:
INCOME (LOSS) FROM OPERATIONS	(54,793,000)		(42,426,000)
Net income (loss) attributable to General Steel Holdings, Inc.:
NET LOSS ATTRIBUTABLE TO GENERAL STEEL HOLDINGS, INC.	(44,234,000)		(42,449,000)
Intersegment Eliminations [Member]
Sales:
TOTAL SALES	0		(54,000)
Gross profit:
GROSS PROFIT	0		0
ASSETS
Interdivision Assets	(79,743,000)				(30,486,000)
Segment Reconciling Items [Member]
Income (loss) from operations:
INCOME (LOSS) FROM OPERATIONS	(919,000)	[1]	(1,237,000)	[1]
Net income (loss) attributable to General Steel Holdings, Inc.:
NET LOSS ATTRIBUTABLE TO GENERAL STEEL HOLDINGS, INC.	(919,000)	[1]	(1,115,000)	[1]
Finance/interest expenses:
FINANCE/INTEREST EXPENSES	1,000	[1]	95,000	[1]
Capital expenditures:
Reconciling item	0	[1]	0	[1]
ASSETS
Reconciling item	3,281,000	[2]			2,953,000	[2]
Longmen Joint Venture [Member]
Sales:
TOTAL SALES	328,158,000		594,014,000
Gross profit:
GROSS PROFIT	(32,147,000)		(22,219,000)
Income (loss) from operations:
INCOME (LOSS) FROM OPERATIONS	(53,498,000)		(39,294,000)
Net income (loss) attributable to General Steel Holdings, Inc.:
NET LOSS ATTRIBUTABLE TO GENERAL STEEL HOLDINGS, INC.	(42,405,000)		(38,034,000)
Depreciation and amortization:
Depreciation, amortization and depletion	24,186,000		23,530,000
Finance/interest expenses:
FINANCE/INTEREST EXPENSES	19,148,000		26,990,000
Capital expenditures:
Consolidated capital expenditures	30,625,000		56,747,000
ASSETS
Segment Reporting Assets	2,310,161,000				2,408,218,000
Maoming Hengda Steel Company Ltd [Member]
Sales:
TOTAL SALES	6,000		36,000
Gross profit:
GROSS PROFIT	0		24,000
Income (loss) from operations:
INCOME (LOSS) FROM OPERATIONS	(561,000)		(522,000)
Net income (loss) attributable to General Steel Holdings, Inc.:
NET LOSS ATTRIBUTABLE TO GENERAL STEEL HOLDINGS, INC.	(666,000)		(537,000)
Depreciation and amortization:
Depreciation, amortization and depletion	310,000		304,000
Finance/interest expenses:
FINANCE/INTEREST EXPENSES	0		0
Capital expenditures:
Consolidated capital expenditures	296,000		32,000
ASSETS
Segment Reporting Assets	22,555,000				25,933,000
Baotou Steel Pipe Joint Venture [Member]
Sales:
TOTAL SALES	0		162,000
Gross profit:
GROSS PROFIT	0		(23,000)
Income (loss) from operations:
INCOME (LOSS) FROM OPERATIONS	0		(44,000)
Net income (loss) attributable to General Steel Holdings, Inc.:
NET LOSS ATTRIBUTABLE TO GENERAL STEEL HOLDINGS, INC.	0		(35,000)
Depreciation and amortization:
Depreciation, amortization and depletion	0		62,000
Finance/interest expenses:
FINANCE/INTEREST EXPENSES	0		1,000
Capital expenditures:
Consolidated capital expenditures	0		0
General Steel (China) Tianwu Joint Venture [Member]
Sales:
TOTAL SALES	0		53,000
Gross profit:
GROSS PROFIT	0		(343,000)
Income (loss) from operations:
INCOME (LOSS) FROM OPERATIONS	(734,000)		(2,566,000)
Net income (loss) attributable to General Steel Holdings, Inc.:
NET LOSS ATTRIBUTABLE TO GENERAL STEEL HOLDINGS, INC.	(1,163,000)		(3,843,000)
Depreciation and amortization:
Depreciation, amortization and depletion	668,000		450,000
Finance/interest expenses:
FINANCE/INTEREST EXPENSES	1,421,000		1,609,000
Capital expenditures:
Consolidated capital expenditures	668,000		82,000
ASSETS
Segment Reporting Assets	249,013,000				158,606,000
Tianjin General Shengyuan IoT Technology Co Ltd [Member]
Sales:
TOTAL SALES	0		0
Gross profit:
GROSS PROFIT	0		0
Income (loss) from operations:
INCOME (LOSS) FROM OPERATIONS	0		0
Net income (loss) attributable to General Steel Holdings, Inc.:
NET LOSS ATTRIBUTABLE TO GENERAL STEEL HOLDINGS, INC.	0		0
Depreciation and amortization:
Depreciation, amortization and depletion	0		0
Finance/interest expenses:
FINANCE/INTEREST EXPENSES	0		0
Capital expenditures:
Consolidated capital expenditures	0		0
ASSETS
Segment Reporting Assets	$ 1,142,000				$ 0

[1] Reconciling item represents income or expenses of the Company, arising from General Steel Investment Co., Ltd, Yangpu Shengtong Investment Co., Ltd and Qiu Steel for the three months ended March 31, 2015 and 2014, which are non-operating entities.

[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 March 31, 2015 and December 31, 2014, which are non-operating entities.

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Accounts receivable (including related parties), net (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable	$ 11,194	$ 9,804
Less: allowance for doubtful accounts	(508)	(483)
Accounts Receivable, Related Parties, Current	59,183	8,624
Less: allowance for doubtful accounts - related parties	(126)	(126)
Net accounts receivable	$ 69,743	$ 17,819

XML

Commitment and contingencies (Tables)

3 Months Ended

Mar. 31, 2015

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 March 31, 2015 is as follows:

Year ending March 31,	Minimum lease payment
	(in thousands)
2016	$	2,126
2017		1,946
2018		1,885
2019		1,206
2020		1,206
Years after		40,152
Total minimum payments required	$	48,521

Schedule of Guarantor Obligations [Table Text Block]

As of March 31, 2015, Longmen Joint Venture provided guarantees to related parties’ and third parties’ bank loans, including lines of credit and others, amounting to $55.4 million.

Nature of guarantee	Guarantee amount		Guaranty Due Date
	(In thousands)
Line of credit	$	52,274	Various from April 2015 to August 2017
Financing by the rights of goods delivery in future		3,099	June 2015
Total	$	55,373

Schedule Of Parties Being Guaranteed [Table Text Block]

Name of parties being guaranteed	Guarantee amount		Guaranty Due Date
	(In thousands)
Long Steel Group	$	19,654	Various from April to September 2015
Shaanxi Haiyan Coke Group Co., Ltd.		13,048	September 2015
Long Steel Group Fuping Rolling Steel Co., Ltd		3,099	June 2015
Xi’an Laisheng Logistics Co., Ltd		3,262	May 2015
Gansu Yulong Trading Co., Ltd		16,310	August 2017
Total	$	55,373

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Subsequent event

3 Months Ended

Mar. 31, 2015

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Note 24 – Subsequent event

On April 14, 2015, the Company granted 500,000 shares of common stock for investor relations consulting services under a service agreements dated April 14, 2015. The shares were valued at $0.98 per share, the quoted market price at the time the services were provided.

XML

Segments

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Note 23 – 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) & General Shengyuan in Tianjin City.

The Group operates in two business segments, one consisting of General Shengyuan and one consisting of three different divisions including Longmen Joint Venture, Maoming Hengda and General Steel (China). These reportable divisions are consistent with the way the Company manages its business, each division operates under separate management groups and produces discrete financial information. The accounting principles applied at the operating division level in determining income from operations is generally the same as those applied at the consolidated financial statement level.

The following represents results of division operations for three months ended March 31, 2015 and 2014:

(In thousands)
Sales:	2015		2014
Longmen Joint Venture	$	328,158	$	594,014
Maoming Hengda		6		36
Baotou Steel Pipe Joint Venture		-		162
General Shengyuan		-		-
General Steel (China)		-		53
Total sales		328,164		594,265
Interdivision sales		-		(54)
Consolidated sales	$	328,164	$	594,211

Gross profit (loss):	2015		2014
Longmen Joint Venture	$	(32,147)	$	(22,219)
Maoming Hengda		-		24
Baotou Steel		-		(23)
General Shengyuan		-		-
General Steel (China)		-		(343)
Total gross loss		(32,147)		(22,561)
Interdivision gross profit		-		-
Consolidated gross loss	$	(32,147)	$	(22,561)

Income (loss) from operations:	2015		2014
Longmen Joint Venture	$	(53,498)	$	(39,294)
Maoming Hengda		(561)		(522)
Baotou Steel		-		(44)
General Shengyuan		-		-
General Steel (China)		(734)		(2,566)
Total loss from operations		(54,793)		(42,426)
Reconciling item (1)		(919)		(1,237)
Consolidated loss from operations	$	(55,712)	$	(43,663)

Net income (loss) attributable to General Steel Holdings, Inc.:	2015		2014
Longmen Joint Venture	$	(42,405)	$	(38,034)
Maoming Hengda		(666)		(537)
Baotou Steel		-		(35)
General Shengyuan		-		-
General Steel (China)		(1,163)		(3,843)
Total net loss attributable to General Steel Holdings, Inc.		(44,234)		(42,449)
Reconciling item (1)		(919)		(1,115)
Consolidated net loss attributable to General Steel Holdings, Inc.	$	(45,153)	$	(43,564)

Depreciation, amortization and depletion:	2015		2014
Longmen Joint Venture	$	24,186	$	23,530
Maoming Hengda		310		304
Baotou Steel		-		62
General Shengyuan		-		-
General Steel (China)		668		450
Consolidated depreciation, amortization and depletion	$	25,164	$	24,346

Finance/interest expenses:	2015		2014
Longmen Joint Venture	$	19,148	$	26,990
Maoming Hengda		-		-
Baotou Steel		-		1
General Shengyuan		-		-
General Steel (China)		1,421		1,609
Reconciling item (1)		1		95
Consolidated interest expenses	$	20,570	$	28,695

Capital expenditures:	2015		2014
Longmen Joint Venture	$	30,625	$	56,747
Maoming Hengda		296		32
Baotou Steel		-		-
General Shengyuan		-		-
General Steel (China)		668		82
Reconciling item (1)		-		-
Consolidated capital expenditures	$	31,589	$	56,861

Total Assets as of:	March 31, 2015		December 31, 2014
Longmen Joint Venture	$	2,310,161	$	2,408,218
Maoming Hengda		22,555		25,933
General Shengyuan		1,142		-
General Steel (China)		249,013		158,606
Interdivision assets		(79,743)		(30,486)
Reconciling item (2)		3,281		2,953
Total Assets	$	2,506,409	$	2,565,224

(1) Reconciling item represents income or expenses of the Company, arising from General Steel Investment Co., Ltd, Yangpu Shengtong Investment Co., Ltd and Qiu Steel for the three months ended March 31, 2015 and 2014, which are non-operating entities.

(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 March 31, 2015 and December 31, 2014, which are non-operating entities.

XML

Related party transactions and balances (Details 5) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015		Dec. 31, 2014
Related Party Transaction [Line Items]
Other receivables - related parties	$ 23,143		$ 39,734
Long Steel Group [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture
Other receivables - related parties	1,219		165
Shaanxi Steel [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Majority shareholder of Long Steel Group
Other receivables - related parties	1,141		35,669
Tianjin General Quigang Pipe Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Partially owned by CEO through indirect shareholding	[1]
Other receivables - related parties	17,939	[1]	1,237	[1]
Tianjin Hengying Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Partially owned by CEO through indirect shareholding	[2]
Other receivables - related parties	927		721
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	466		313
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	1,101		1,101
Others [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Entities either owned or have significant influence by our affiliates or management
Other receivables - related parties	$ 350		$ 528

[1] Full balance has been repaid subsequently to March 31, 2015 by this entity.

[2] The Company reclassified advances for inventory purchase - related parties related to trading transactions, as noted in note 2(g), to loans receivable - related parties due to their interest-bearing nature.

XML

Summary of significant accounting policies (Details 10)	3 Months Ended
	Mar. 31, 2015
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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Segments (Tables)

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

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

The following represents results of division operations for three months ended March 31, 2015 and 2014:

(In thousands)
Sales:	2015		2014
Longmen Joint Venture	$	328,158	$	594,014
Maoming Hengda		6		36
Baotou Steel Pipe Joint Venture		-		162
General Shengyuan		-		-
General Steel (China)		-		53
Total sales		328,164		594,265
Interdivision sales		-		(54)
Consolidated sales	$	328,164	$	594,211

Gross profit (loss):	2015		2014
Longmen Joint Venture	$	(32,147)	$	(22,219)
Maoming Hengda		-		24
Baotou Steel		-		(23)
General Shengyuan		-		-
General Steel (China)		-		(343)
Total gross loss		(32,147)		(22,561)
Interdivision gross profit		-		-
Consolidated gross loss	$	(32,147)	$	(22,561)

Income (loss) from operations:	2015		2014
Longmen Joint Venture	$	(53,498)	$	(39,294)
Maoming Hengda		(561)		(522)
Baotou Steel		-		(44)
General Shengyuan		-		-
General Steel (China)		(734)		(2,566)
Total loss from operations		(54,793)		(42,426)
Reconciling item (1)		(919)		(1,237)
Consolidated loss from operations	$	(55,712)	$	(43,663)

Net income (loss) attributable to General Steel Holdings, Inc.:	2015		2014
Longmen Joint Venture	$	(42,405)	$	(38,034)
Maoming Hengda		(666)		(537)
Baotou Steel		-		(35)
General Shengyuan		-		-
General Steel (China)		(1,163)		(3,843)
Total net loss attributable to General Steel Holdings, Inc.		(44,234)		(42,449)
Reconciling item (1)		(919)		(1,115)
Consolidated net loss attributable to General Steel Holdings, Inc.	$	(45,153)	$	(43,564)

Depreciation, amortization and depletion:	2015		2014
Longmen Joint Venture	$	24,186	$	23,530
Maoming Hengda		310		304
Baotou Steel		-		62
General Shengyuan		-		-
General Steel (China)		668		450
Consolidated depreciation, amortization and depletion	$	25,164	$	24,346

Finance/interest expenses:	2015		2014
Longmen Joint Venture	$	19,148	$	26,990
Maoming Hengda		-		-
Baotou Steel		-		1
General Shengyuan		-		-
General Steel (China)		1,421		1,609
Reconciling item (1)		1		95
Consolidated interest expenses	$	20,570	$	28,695

Capital expenditures:	2015		2014
Longmen Joint Venture	$	30,625	$	56,747
Maoming Hengda		296		32
Baotou Steel		-		-
General Shengyuan		-		-
General Steel (China)		668		82
Reconciling item (1)		-		-
Consolidated capital expenditures	$	31,589	$	56,861

Total Assets as of:	March 31, 2015		December 31, 2014
Longmen Joint Venture	$	2,310,161	$	2,408,218
Maoming Hengda		22,555		25,933
General Shengyuan		1,142		-
General Steel (China)		249,013		158,606
Interdivision assets		(79,743)		(30,486)
Reconciling item (2)		3,281		2,953
Total Assets	$	2,506,409	$	2,565,224

(1) Reconciling item represents income or expenses of the Company, arising from General Steel Investment Co., Ltd, Yangpu Shengtong Investment Co., Ltd and Qiu Steel for the three months ended March 31, 2015 and 2014, which are non-operating entities.

(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 March 31, 2015 and December 31, 2014, which are non-operating entities.

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Summary of significant accounting policies (Policies)

3 Months Ended

Mar. 31, 2015

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	%
Tianjin General Shengyuan IoT Technology Co., Ltd. (“General Shengyuan”)	PRC		70.0	%
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	%

Baotou Steel

Prior to December 31, 2014, the Company held an 80.0% equity interest in Baotou Steel – General Steel Special Steel Pipe Joint Venture Co., Ltd. (“Baotou Steel”) through General Steel (China). On December 31, 2014, the Company sold its 80.0% equity interest in Baotou Steel to Tianjin Shuangjie Liansheng Rolled Steel Co., Ltd., an unrelated party for $0.7 million (RMB 4.0 million), receivable within one year of the sale. As a result of this transaction, the Company met the criteria under ASC 810-10-40-4 to deconsolidate Baotou Steel at disposal date and recognized a gain in accordance with ASC 810-10-40-5.

General Shengyuan

On February 13, 2015, the Company formed a joint venture entity, Tianjin General Shengyuan IoT Technology Co., Ltd, with a team of radio-frequency identification (“RFID”) experts (the “Expert Team”), to develop and commercialize RFID technology data solutions. Under the terms of the Agreement, the Company owned 70% of the joint venture by contributing $1.6 million (RMB 10.0 million), while the Expert Team committed to contribute intellectual property, including proprietary RFID technologies, licensed patents and domain expertise.

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(d) Liquidity and Going Concern.

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:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Current assets	$	726,110	$	837,135
Plant and equipment, net		1,557,027		1,537,687
Other noncurrent assets		27,024		33,396
Total assets		2,310,161		2,408,218
Total liabilities		(2,920,281)		(2,946,126)
Net liabilities	$	(610,120)	$	(537,908)

VIE and its subsidiaries’ liabilities consist of the following:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Current liabilities:
Short term notes payable	$	432,052	$	638,829
Accounts payable		596,221		605,025
Accounts payable - related parties		222,595		205,914
Short term loans - bank		191,536		216,940
Short term loans - others		45,795		54,524
Short term loans - related parties		209,553		45,710
Other payables and accrued liabilities		44,286		47,121
Other payables - related parties		69,890		78,615
Customer deposits		129,896		87,372
Customer deposits - related parties		43,654		34,895
Deposit due to sales representatives		19,361		17,871
Deposit due to sales representatives – related parties		2,553		2,509
Taxes payable		8,192		4,026
Deferred lease income		2,179		2,176
Capital lease obligations, current		8,678		8,508
Intercompany payable to be eliminated		13,778		20,155
Total current liabilities		2,040,219		2,070,190
Non-current liabilities:
Long term loans - related parties		352,850		339,549
Deferred lease income - noncurrent		72,258		72,713
Capital lease obligations, noncurrent		397,416		393,252
Profit sharing liability		57,538		70,422
Total non-current liabilities		880,062		875,936
Total liabilities of consolidated VIE	$	2,920,281	$	2,946,126

	Three months ended March 31, 2015		Three months ended March 31, 2014
	(in thousands)		(in thousands)
Sales	$	328,158	$	594,014
Gross loss	$	(32,147)	$	(22,219)
Loss from operations	$	(53,498)	$	(39,294)
Net loss attributable to controlling interest	$	(42,405)	$	(38,034)

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 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 March 31, 2015 and December 31, 2014 and for the three months ended March 31, 2015 and 2014, 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 March 31, 2015 and December 31, 2014 and for the three months ended March 31, 2015 and 2014, 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 a majority voting rights in each entity, and thereby, the power of control, to Longmen Joint Venture.

Liquidity Disclosure [Policy Text Block]

(d) Liquidity and going concern

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

The steel business is capital intensive and as a normal industry practice in PRC, the Company is highly leveraged. Debt financing in the form of short term bank loans, loans from related parties, financing sales, bank acceptance notes, and capital leases have been utilized to finance the working capital requirements and the capital expenditures of the Company. As a result, the Company’s debt to equity ratio as of March 31, 2015 and December 31, 2014 were (4.9) and (5.6), respectively. As of March 31, 2015, the Company’s current liabilities exceed current assets (excluding non-cash item) by $1.4 billion, which together with the gross loss from operations raises substantial doubt about its ability to continue as a going concern.

Our steel business has faced very tough market conditions and challenging profitability over the last several years, and based on current trends, we think the near-term challenges for the steel sector will likely linger. In reaction to this challenging market, we are proactively reviewing our strategy and asset portfolio and seeking to restructure low-efficient, non-core assets, as well as idle land resources to unlock hidden fair value.

The Company aims to transform into a leaner and fitter organization with better profitability. As such, the Company is strategically accelerating its business transformation to pursue opportunities that offer compelling benefits to the Company and shareholders, including:

· First, strengthen the Company’s financials while providing the financial flexibility to pursue higher return, higher growth opportunities;

· Second, reduce the complexity of the Company’s business structure, which is consistent with our objectives for internal simplification and operating efficiency;

· Third, diversify operating risk in order to lower the Company’s high reliance on steel business, while at the same time leverage on the Company’s vast vertical resources in the steel industry; and

· Fourth, pursue opportunities for additional value creation.

Management has implemented the following plans that are intended to mitigate the conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern.

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

Line of credit

The Company has lines of credit from the listed major banks totaling $142.0 million with expiration dates ranging from January 21, 2016 to October 14, 2016.

Banks	Amount of Line of Credit (in millions)		Repayment Date
China Everbright Bank		19.6	January 21, 2016*
Huaxia Bank		24.5	January 30, 2016*
Bank of Beijing		81.6	October 14, 2016
Bank of Xi’an		16.3	February 4, 2016*
Total	$	142.0

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

As of the date of this report, the Company utilized $39.5 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 $897.1 million with the following companies:

Company	Financing Period	Financing Amount (in millions)
Company A – related party	July 30, 2014 – July 30, 2019	$	244.7
Company B – third party	January 22, 2014 – January 22, 2017		163.1
Company C – third party	October 1, 2013 – March 31, 2016		489.3
Total		$	897.1

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 $244.7 million. Company B signed a three-year agreement with Longmen Joint Venture on January 22, 2014 to finance its coke purchases up to $163.1 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, the Company’s payables to Company A and Company B were approximately $77.6 million and $63.4 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 $489.3 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, the Company’s payable to Company C was approximately $16.2 million

Other financing

On April 22, 2014, April 23, 2014, and April 30, 2015, Longmen Joint Venture signed two-to-three-year payment extension agreements with Company D, E, F, G and H listed below. In total, Longmen Joint Venture can obtain $412.8 million in financial support from 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	$	81.6
Company E – related party	April 23, 2014 – April 23, 2017		86.4
Company F – related party	April 22, 2014 – April 22, 2017		81.6
Company G – related party	April 30, 2015 – April 30, 2018		81.6
Company H – related party	April 30, 2015 – April 30, 2018		81.6
Total		$	412.8

As of the date of this report, our payables to Company D, Company E, Company F, Company G, and Company H are approximately $8.3 million, $30.1 million, $42.7 million, $0, and $0.9 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 March 31, 2015, Longmen Joint Venture has collected a total amount of $21.9 million. Historically, this amount is quite stable and we do not expect a big fluctuation in this amount for the next twelve months from March 31, 2015 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 March 31, 2016. However, this opinion is based on the demand of the Company's products, economic conditions, the overcapacity issue in the steel industry and the Company's operating results not continuing to deteriorate and on our vendors and related parties being able to provide continued liquidity, as summarized below. The detailed breakdown of Longmen Joint Venture’s estimated cash flows items are listed below.

	Cash inflow (outflow) (in millions)
	For the twelve months ended March 31, 2016
Current liabilities over current assets (excluding deferred lease income) as of March 31, 2015 (unaudited)	$	(1,361.5)
Projected cash financing and outflows:
Cash provided by line of credit from banks		142.0
Cash provided by vendor financing		897.1
Cash provided by other financing		412.8
Cash provided by sales representatives		21.9
Cash projected to be used in operations in the twelve months ended March 31, 2016		(39.3)
Cash projected to be used for financing cost in the twelve months ended March 31, 2016		(46.2)
Net projected change in cash for the twelve months ended March 31, 2016	$	26.8

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 for property, plant and equipment, and potential losses on uncollectible receivables, allowance for inventory valuation, the interest rate used in the financing sales, the fair value of the assets recorded under capital lease and the present value of the net minimum lease payments of the capital lease. Actual results could differ from these estimates.

One of the Company’s most significant estimates is the determination of fair value of the profit sharing liability. Since the liability is calculated and largely based on management’s expectations of product demand, pricing, raw materials cost and projected manufacturing efficiencies, it is susceptible to material changes when actual results deviate from those expectations. While management believes its current assumptions are reasonable and achievable, there is no assurance that those future expectations will be met or that significant adjustments won’t be required in the future.

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.

Through the quarterly ended March 31, 2015, the Company has incurred recurring losses from the Company’s operations from the last several years as the Company’s steel business has faced very tough market conditions and challenging profitability. Management has continued its effort to implementing cost savings on our manufacturing overhead costs and to reduce our unit production cost. The Company has forecasted its loss will be continued until year 2017 and expected to make a turning point and become profitable in year 2018 and beyond. The Company’s forecast is based on current market condition, if the future market condition is different from its forecast, the Company might continue to incur additional loss in 2018 and beyond and the Company’s assets pool of its long-lived assets may become impaired.

The Company has significant exposure to the price fluctuation of raw materials and energy prices as part of its normal operations. As of March 31, 2015 and December 31, 2014, the Company did not have any open commodity contracts to mitigate such risks.

Cash includes demand deposits in accounts maintained with banks within the PRC, Hong Kong and the United States. Total cash (including restricted cash balances) in these banks on March 31, 2015 and December 31, 2014 amounted to $259.6 million and $367.2 million, including $0.6 million and $1.0 million that were deposited in Shaanxi Coal and Chemical Industry Group Financial Co., Ltd., a related party, respectively. As of March 31, 2015, $0.01 million cash in the bank was covered by insurance. The Company has not experienced any losses in other bank accounts and believes it is not exposed to any risks on its cash in bank accounts.

Two of the Company’s customers individually accounted for 12.1% and 10.5% of total sales for the three months ended March 31, 2015, respectively. One customer individually accounted for  81.7% of total accounts receivable, including related parties as of March 31, 2015. None of the Company’s customers accounted for more than 10% of total sales for the three months ended March 31, 2014. Two customers individually accounted for 32.1% and 20.5% of total accounts receivable, including related parties as of December 31, 2014, respectively.

None of the Company’s suppliers individually accounted for more than 10% of the total purchases for the three months ended March 31, 2015 and one of the Company’s suppliers individually accounted for 15.4% of the total purchases for the three months ended March 31, 2014. None of the Company’s suppliers individually accounted for more than 10% of total accounts payable as March 31, 2015 and December 31, 2014.

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 statement of operations accounts are translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statement of equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

Translation adjustments included in accumulated other comprehensive income amounted to $0.2 million and $0.6 million as of March 31, 2015 and December 31, 2014, respectively. The balance sheet amounts, with the exception of equity at March 31, 2015 and December 31, 2014 were translated at 6.13 RMB and 6.14 RMB to $1.00, respectively. The equity accounts were stated at their historical rate. The average translation rates applied to statement of operations accounts for the three months ended March 31, 2015 and 2014 were 6.15 RMB and 6.12 RMB, respectively. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheet.

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

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

(h) Financial instruments

The accounting 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 market 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.

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 6.7%.

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. On November 22, 2014, the People’s Bank of China decreased standard bank borrowing rate across the board by 0.4%. Accordingly, the Company adjusted down the present value discount rate for profit sharing liability by 0.4% from 7.3% to 6.9%. On May 11, 2015, the People’s Bank of China decreased the standard bank borrowing rate again across the board by 0.25%. Accordingly, the Company adjusted down the present value discount rate for profit sharing liability by 0.25% from 6.9% to 6.7%.

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

The above assumptions were reviewed by the Company at March 31, 2015 and December 31, 2014 and the assumptions related to the projected growth in the steel market and costs were revised, resulting in a further reduction of the estimated profit sharing liability.

The major drivers of the change in our estimate were the continuing decrease in the selling price of our products as well as a continuing downtrend in the sluggish infrastructure investment and consumption growth for the next ten years or so. As such, as of December 31, 2014 financial statement issuance we had lowered our projected growth in the steel market for approximately ten years as compared to our previous estimates at December 31, 2013. The variables and the impact on our inputs to the 2014 valuation of profit sharing fair value, as compared to the 2013 valuation of the profit sharing fair value can be summarized as follows:

- Volume Inputs: The most recent 5 year China GDP forecast and Shaanxi GDP forecast decreased on average by 0.4% and 1.4% of GDP, respectively, versus the forecast used in 2013.

- Steel Sales Price Inputs: The most recent China Steel Association price index, together with our actual result decreased, on average, by 5.6% versus the same forecast used in 2013.

- Raw Material Cost Inputs: The most recent China Steel Association price index, together with the our actual result decreased, on average, by 4.7% versus the same forecast used in 2013

The above reduced our Gross Profit % over the next 5 years by, on average, 0.4% from the 2013 valuation. In addition, the above reduced our Gross Profit % over the remaining profit sharing period of 11.33 years by, on average, 1.75% from the 2013 valuation at December 31, 2014.

As a result of the changes in valuation inputs noted above for the year ended December 31, 2014, the Company recognized a gain on the change in the fair value of the profit sharing liability of $91.0 million due to a $110.6 million reduction in the fair value of profit sharing liability resulting from the change in estimates of future operating profits and a $0.1 million reduction resulting from the Asset Pool’s operating results for the year ended December 31, 2014 being slightly less favorable than previously estimated as of December 31, 2013, offset by a $8.1 million loss resulting from the 0.4% reduction of the present value discount rate and a $11.5 million loss from the present value discount.

For the three months ended March 31, 2015, the Company recognized a $12.9 million reduction in the fair value of profit sharing liability resulting from the change in estimates of future operating profits based on the April 2015 actual operating results and consideration for Chinese steel market trends in April 2015  as well as the May 11, 2015 change to the Borrowing Rate by 0.25%. These further recent changes in market conditions resulted in a decrease in the expected liability of $16.6 million primarily from adjustments to the 2015 and 2016 expected cash flows as well as a $2.5 million loss from the reduction in the present value discount rate of 0.25% and a $1.2 million loss from the present value discount. The estimated fair value of the profit sharing liability at March 31, 2015 is $57.5 million.

The variables and the impact on our inputs to the first quarter of 2015 valuation of profit sharing fair value, as compared to the 2014 valuation of the profit sharing fair value can be summarized as follows:

- Volume Inputs: the Company reduced our projected sales volume in 2015 by 3% versus the forecast used in 2014.

- Steel Sales Price Inputs: the Company reduced our projected selling price in 2015 by 12% versus the forecast used in 2014 and reduced our projected selling price in 2016 by 7% versus the forecast used in 2014.

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 borrowings rate used to discount the liability to a present value by 1.0% and other factors remained unchanged, our profit sharing liability as of March 31, 2015 would have been $66.2 million and we would increase the loss from the change in the fair value of the profit sharing liability by $8.7 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 March 31, 2015 would have been $53.1 million and we would increase the gain from the change in the fair value of the profit sharing liability by $4.4 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 March 31, 2015:

(in thousands)	Carrying Value as of March 31, 2015		Fair Value Measurements at March 31, 2015 Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Profit sharing liability	$	57,538	$	-	$	-	$	57,538
Total	$	57,538	$	-	$	-	$	57,538

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, 2014:

(in thousands)	Carrying Value as of December 31, 2014		Fair Value Measurements at December 31, 2014 Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Profit sharing liability	$	70,422	$	-	$	-	$	70,422
Total	$	70,422	$	-	$	-	$	70,422

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 three months ended March 31, 2015 and for the year ended December 31, 2014:

	March 31,		December 31,
	2015		2014
	(in thousands)		(in thousands)
Beginning balance	$	70,422	$	162,295
Change in fair value of profit sharing liability:
Change in preset value of estimate of future operating profits		(16,569)		(110,589)
Change in discount rate		2,454		8,106
Interest expense - present value discount amortization		1,220		11,544
Difference between the previously estimated operating results for the current period and actual results		-		(79)
Exchange rate effect		11		(855)
Ending balance	$	57,538	$	70,422

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 request for payment to the customer’s bank earlier than the scheduled payment date, but will incur an interest charge and a processing fee.

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

Interest expenses for early submission request of payment amounted to $8.0 million and $14.1 million for the three months ended March 31, 2015 and 2014, respectively.

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 betterment to buildings and equipment are capitalized. Interest incurred during construction is capitalized into construction in progress. All other interest is expensed as incurred.

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

Due to the recurring losses in the Longmen Joint Venture’s operations, the Company has considered it is a triggering event that Longmen Joint Venture’s carrying amount may not be recoverable, to determine whether its carrying value has become impaired. The Company uses the undiscounted cash flow estimation approach for the purpose of performing a recoverability test which includes future cash inflows less associated cash outflows that are directly associated with and that are expected to arise as a direct result of the use and eventual disposition of the assets. For purposes of assessment, the long lived assets were grouped at the lowest level for which there is identifiable cash flows. The major groupings analyzed include Longmen Joint Venture, Maoming Hengda and General Steel (China). Further, our estimate of future cash flows includes estimated future cash flows necessary to maintain our existing production potential over the entire period and within the various groups. The projections are based on a best estimate approach as opposed to a probability weighted approach based on the likelihood of possible outcomes. When the Company identifies an impairment, the Company reduces the carrying amount of the asset to its estimated fair value based on a discounted cash flows method. As of March 31, 2015, the Company expects its long-lived assets to be fully recoverable (see Note 2(f.)). 

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 March 31, 2015, the Company expects these assets to be fully recoverable.

Land use rights

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

Long Steel Group contributed land use rights for a total amount of $24.2 million (RMB 148.3 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 on
	(in thousands)
General Steel (China)	$	3,870		2050 & 2053
Longmen Joint Venture	$	24,187		2048 & 2052
Maoming Hengda	$	2,706		2054

Mining right

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

Investment, Policy [Policy Text Block]

(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 March 31, 2015 and December 31, 2014.

Unconsolidated entities	Year acquired		March 31, 2015 Net investment (In thousands)		Owned %		December 31, 2014 Net investment (In thousands)		Owned %
Xi’an Delong Powder Engineering Materials Co., Ltd.		2007	$	1,014		24.1	$	1,153		24.1

The table below summarizes General Steel (China)’s investment holding (see Note 2(a) - Basis of presentation) as of March 31, 2015 and December 31, 2014.

Unconsolidated entities	Year acquired		March 31, 2015 Net investment (In thousands)		Owned %		December 31, 2014 Net investment (In thousands)		Owned %
Tianwu General Steel Material Trading Co., Ltd.		2010	$	15,691		32.0	$	15,670		32.0

Total investment income (loss) in unconsolidated subsidiaries amounted to $(0.04) million and $0.01 million for the three months ended March 31, 2015 and 2014, respectively, which was included in “Income from equity investments” in the condensed consolidated statements of operations and comprehensive loss.

Revenue Recognition, Policy [Policy Text Block]

(m) Revenue recognition

Sales is 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 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 obligators, 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. Sales in trading transactions, which were netted against corresponding cost of goods sold, amounted to $107.7 million and $38.2 million for the three months ended March 31, 2015 and 2014, respectively. The net amount in gross loss amounted to $64,994 and $288,513 during the respective periods. 

New Accounting Pronouncements, Policy [Policy Text Block]

(n) Recently issued accounting pronouncements

In February 2015, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015-02, Amendments to the Consolidation Analysis. Under both current GAAP requirements and the amendments in this update, a decision maker is determined to be the primary beneficiary of a VIE if it satisfies both the power and the economics criteria. The primary beneficiary consolidates a VIE because it has a controlling financial interest. Under the requirements in current GAAP, if a fee arrangement paid to a decision maker, such as an asset management fee, is determined to be a variable interest in a VIE, the decision maker must include the fee arrangement in its primary beneficiary determination and could consolidate the VIE on the basis of power (decision-making authority) and economics (the fee arrangement). However, the amendments in this Update specify that some fees paid to a decision maker are excluded from the evaluation of the economics criterion if the fees are both customary and commensurate with the level of effort required for the services provided. Those amendments make it less likely for a decision maker to meet the economics criterion solely on the basis of a fee arrangement. The amendments in this update are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. Management is evaluating the impact that will arise from these Amendments.

In April 2015, the FASB issued authoritative guidance on accounting for Interest-Imputation of Interest (Subtopic 835-30); Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). This update requires that debt issuance cost related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts, without changing existing recognition and measurement guidance for debt issuance costs. The new guidance is required to be applied on a retrospective basis and to be accounted for as a change in an accounting principle. The amendments in this update are effective for financial statements issued for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years and early adoption of the amendments in this update is permitted. The Company will apply early adoption of this standard in the second quarter of 2015. The implementation of this standard will result in the reclassification of certain debt issuance costs from deferred financing cost to a reduction in the carrying amount of the related debt liability within the Company’s consolidated balance sheets.

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Summary of significant accounting policies (Tables)

3 Months Ended

Mar. 31, 2015

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	%
Tianjin General Shengyuan IoT Technology Co., Ltd. (“General Shengyuan”)	PRC		70.0	%
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:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Current assets	$	726,110	$	837,135
Plant and equipment, net		1,557,027		1,537,687
Other noncurrent assets		27,024		33,396
Total assets		2,310,161		2,408,218
Total liabilities		(2,920,281)		(2,946,126)
Net liabilities	$	(610,120)	$	(537,908)

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

VIE and its subsidiaries’ liabilities consist of the following:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Current liabilities:
Short term notes payable	$	432,052	$	638,829
Accounts payable		596,221		605,025
Accounts payable - related parties		222,595		205,914
Short term loans - bank		191,536		216,940
Short term loans - others		45,795		54,524
Short term loans - related parties		209,553		45,710
Other payables and accrued liabilities		44,286		47,121
Other payables - related parties		69,890		78,615
Customer deposits		129,896		87,372
Customer deposits - related parties		43,654		34,895
Deposit due to sales representatives		19,361		17,871
Deposit due to sales representatives – related parties		2,553		2,509
Taxes payable		8,192		4,026
Deferred lease income		2,179		2,176
Capital lease obligations, current		8,678		8,508
Intercompany payable to be eliminated		13,778		20,155
Total current liabilities		2,040,219		2,070,190
Non-current liabilities:
Long term loans - related parties		352,850		339,549
Deferred lease income - noncurrent		72,258		72,713
Capital lease obligations, noncurrent		397,416		393,252
Profit sharing liability		57,538		70,422
Total non-current liabilities		880,062		875,936
Total liabilities of consolidated VIE	$	2,920,281	$	2,946,126

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

	Three months ended March 31, 2015		Three months ended March 31, 2014
	(in thousands)		(in thousands)
Sales	$	328,158	$	594,014
Gross loss	$	(32,147)	$	(22,219)
Loss from operations	$	(53,498)	$	(39,294)
Net loss attributable to controlling interest	$	(42,405)	$	(38,034)

Schedule of Line of Credit Facilities [Table Text Block]

The Company has lines of credit from the listed major banks totaling $142.0 million with expiration dates ranging from January 21, 2016 to October 14, 2016.

Banks	Amount of Line of Credit (in millions)		Repayment Date
China Everbright Bank		19.6	January 21, 2016*
Huaxia Bank		24.5	January 30, 2016*
Bank of Beijing		81.6	October 14, 2016
Bank of Xi’an		16.3	February 4, 2016*
Total	$	142.0

*Management expects the 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 March 31, 2015:

(in thousands)	Carrying Value as of March 31, 2015		Fair Value Measurements at March 31, 2015 Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Profit sharing liability	$	57,538	$	-	$	-	$	57,538
Total	$	57,538	$	-	$	-	$	57,538

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, 2014:

(in thousands)	Carrying Value as of December 31, 2014		Fair Value Measurements at December 31, 2014 Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Profit sharing liability	$	70,422	$	-	$	-	$	70,422
Total	$	70,422	$	-	$	-	$	70,422

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 three months ended March 31, 2015 and for the year ended December 31, 2014:

	March 31,		December 31,
	2015		2014
	(in thousands)		(in thousands)
Beginning balance	$	70,422	$	162,295
Change in fair value of profit sharing liability:
Change in preset value of estimate of future operating profits		(16,569)		(110,589)
Change in discount rate		2,454		8,106
Interest expense - present value discount amortization		1,220		11,544
Difference between the previously estimated operating results for the current period and actual results		-		(79)
Exchange rate effect		11		(855)
Ending balance	$	57,538	$	70,422

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 on
	(in thousands)
General Steel (China)	$	3,870		2050 & 2053
Longmen Joint Venture	$	24,187		2048 & 2052
Maoming Hengda	$	2,706		2054

Schedule Of Investments By Affiliates [Table Text Block]

The table below summarizes Longmen Joint Venture’s investment holdings as of March 31, 2015 and December 31, 2014.

Unconsolidated entities	Year acquired		March 31, 2015 Net investment (In thousands)		Owned %		December 31, 2014 Net investment (In thousands)		Owned %
Xi’an Delong Powder Engineering Materials Co., Ltd.		2007	$	1,014		24.1	$	1,153		24.1

The table below summarizes General Steel (China)’s investment holding (see Note 2(a) - Basis of presentation) as of March 31, 2015 and December 31, 2014.

Unconsolidated entities	Year acquired		March 31, 2015 Net investment (In thousands)		Owned %		December 31, 2014 Net investment (In thousands)		Owned %
Tianwu General Steel Material Trading Co., Ltd.		2010	$	15,691		32.0	$	15,670		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 items are listed below.

	Cash inflow (outflow) (in millions)
	For the twelve months ended March 31, 2016
Current liabilities over current assets (excluding deferred lease income) as of March 31, 2015 (unaudited)	$	(1,361.5)
Projected cash financing and outflows:
Cash provided by line of credit from banks		142.0
Cash provided by vendor financing		897.1
Cash provided by other financing		412.8
Cash provided by sales representatives		21.9
Cash projected to be used in operations in the twelve months ended March 31, 2016		(39.3)
Cash projected to be used for financing cost in the twelve months ended March 31, 2016		(46.2)
Net projected change in cash for the twelve months ended March 31, 2016	$	26.8

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 $897.1 million with the following companies:

Company	Financing Period	Financing Amount (in millions)
Company A – related party	July 30, 2014 – July 30, 2019	$	244.7
Company B – third party	January 22, 2014 – January 22, 2017		163.1
Company C – third party	October 1, 2013 – March 31, 2016		489.3
Total		$	897.1

Other Financing [Member]

Schedule Of Estimated Cash Flow [Table Text Block]

On April 22, 2014, April 23, 2014, and April 30, 2015, Longmen Joint Venture signed two-to-three-year payment extension agreements with Company D, E, F, G and H listed below. In total, Longmen Joint Venture can obtain $412.8 million in financial support from 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	$	81.6
Company E – related party	April 23, 2014 – April 23, 2017		86.4
Company F – related party	April 22, 2014 – April 22, 2017		81.6
Company G – related party	April 30, 2015 – April 30, 2018		81.6
Company H – related party	April 30, 2015 – April 30, 2018		81.6
Total		$	412.8

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Loans receivable

3 Months Ended

Mar. 31, 2015

Loans and Leases Receivable, Related Parties Disclosure [Abstract]

Loans Receivable Related Parties Disclosure [Text Block]

Note 3 – Loans receivable

Loans receivable, including to related parties represent amounts the Company expects to collect from unrelated and related parties upon maturity.

The Company had the following loan receivable due within one year as of:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Loan to unrelated party; due on demand; interest rate is 8.0%.	$	42,569	$	36,001

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

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Loan to Tianjin Hengying Trading Co., Ltd.; due on demand; interest rate is 10.0%.	$	622	$	13,997
Loan to Tianjin Dazhan Industry Co., Ltd.; due on demand; interest rate is 10.0%.		-		14,617
Loan to Beijing Shenghua Xinyuan Metal Materials Co., Ltd.; due on demand; interest rate is 10.0%.		6,106		6,099
Total loans receivable – related parties	$	6,728	$	34,713

See Note 19 “Related party transactions and balances” for the nature of the relationship of related parties.

Total interest income for the loans amounted to $0.5 million and $0.1 million for the three months ended March 31, 2015 and 2014, respectively.

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Loans receivable (Tables)

3 Months Ended

Mar. 31, 2015

Loans and Leases Receivable, Related Parties Disclosure [Abstract]

Schedule Of Loans Receivable Related Parties Current [Table Text Block]

The Company had the following loan receivable due within one year as of:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Loan to unrelated party; due on demand; interest rate is 8.0%.	$	42,569	$	36,001

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

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Loan to Tianjin Hengying Trading Co., Ltd.; due on demand; interest rate is 10.0%.	$	622	$	13,997
Loan to Tianjin Dazhan Industry Co., Ltd.; due on demand; interest rate is 10.0%.		-		14,617
Loan to Beijing Shenghua Xinyuan Metal Materials Co., Ltd.; due on demand; interest rate is 10.0%.		6,106		6,099
Total loans receivable – related parties	$	6,728	$	34,713

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Debt (Details Textual) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Debt Instrument [Line Items]
Percentage Of Transaction Fee	0.05%
Restricted Cash and Cash Equivalents Guarantee For Notes Payable	$ 222,200,000		$ 339,400,000
Restricted Notes Receivable Guarantee For Notes Payable	1,600,000		0
Short Term Borrowings, Default	4,700,000		4,700,000
Financing Sales	118,400,000	230,500,000
Financial Services Costs	700,000	900,000
Interest Costs Capitalized	0	600,000
Interest Expense, Debt	7,400,000	9,500,000
Debt Instrument, Collateral Amount	110,100,000		96,900,000
General Steel China Notes Payable To Various Banks In China [Member]
Debt Instrument [Line Items]
Restricted Cash and Cash Equivalents Guarantee For Notes Payable	8,200,000		14,700,000
Debt, Weighted Average Interest Rate	7.30%		7.20%
Longmen Joint Venture Loans From Various Unrelated Companies and Individuals [Member]
Debt Instrument [Line Items]
Debt Instrument Maturity Dates	various dates from May to September 2015
Debt, Weighted Average Interest Rate	10.20%		5.70%
Longmen Joint Venture Notes Payable To Various Banks In China [Member]
Debt Instrument [Line Items]
Restricted Cash and Cash Equivalents Guarantee For Notes Payable	214,000,000		324,700,000
Restricted Notes Receivable Guarantee For Notes Payable	1,600,000		0
Debt, Weighted Average Interest Rate	7.80%		7.10%
Longmen Joint Venture Loans From Shaanxi Steel Group [Member]
Debt Instrument [Line Items]
Debt, Weighted Average Interest Rate	12.00%
Repayments of Debt, Maturing in More than Three Months	9,489,000
General Steel China Loans From Tianjin Dazhan Industry Co Ltd [Member]
Debt Instrument [Line Items]
Debt, Weighted Average Interest Rate	10.00%
General Steel China Loans From Yangpu Capital Automobile [Member]
Debt Instrument [Line Items]
Debt, Weighted Average Interest Rate	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%
Longmen Joint Venture Loans from various banks in China [Member]
Debt Instrument [Line Items]
Restricted Cash and Cash Equivalents Guarantee For Notes Payable	27,300,000		16,300,000
Restricted Notes Receivable Guarantee For Notes Payable	66,200,000		111,800,000
Longmen Joint Venture's [Member]
Debt Instrument [Line Items]
Debt Instrument Maturity Dates	various dates from May to October 2015
General Steel China's Debt [Member]
Debt Instrument [Line Items]
Debt To Asset Ratio	94.00%		90.80%
Longmen Joint Venture Loans From Tianjin General Qiugang Pipe Co [Member]
Debt Instrument [Line Items]
Debt, Weighted Average Interest Rate	5.40%
Longmen Joint Venture Loan from Long Steel Group [Member]
Debt Instrument [Line Items]
Repayments of Debt, Maturing in More than Three Months	$ 4,924,000
Maximum [Member] | Longmen Joint Venture Loans From Financing Sales [Member]
Debt Instrument [Line Items]
Debt, Weighted Average Interest Rate	12.00%
Maximum [Member] | Longmen Joint Venture Loans From Shaanxi Steel Group [Member]
Debt Instrument [Line Items]
Debt, Weighted Average Interest Rate	8.00%
Maximum [Member] | Longmen Joint Venture Loans From Shaanxi Steel [Member]
Debt Instrument [Line Items]
Debt, Weighted Average Interest Rate	8.00%
Maximum [Member] | Three General Steel China's bank loans [Member]
Debt Instrument [Line Items]
Debt To Asset Ratio			70.00%
Maximum [Member] | Short Term Loans Interest Rates Ranging 5.0% to 24.0% [Member]
Debt Instrument [Line Items]
Debt, Weighted Average Interest Rate	24.00%
Minimum [Member] | Longmen Joint Venture Loans From Financing Sales [Member]
Debt Instrument [Line Items]
Debt, Weighted Average Interest Rate	4.60%
Minimum [Member] | Longmen Joint Venture Loans From Shaanxi Steel Group [Member]
Debt Instrument [Line Items]
Debt, Weighted Average Interest Rate	5.60%
Minimum [Member] | Longmen Joint Venture Loans From Shaanxi Steel [Member]
Debt Instrument [Line Items]
Debt, Weighted Average Interest Rate	6.90%
Minimum [Member] | Two General Steel Chinas Bank Loans [Member]
Debt Instrument [Line Items]
Debt To Asset Ratio	70.00%
Minimum [Member] | Short Term Loans Interest Rates Ranging 5.0% to 24.0% [Member]
Debt Instrument [Line Items]
Debt, Weighted Average Interest Rate	5.00%

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Commitment and contingencies (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Guarantor Obligations [Line Items]
Guarantor Obligations, Current Carrying Value	$ 55,373
Xi'an Laisheng Logistics Co., Ltd [Member]
Guarantor Obligations [Line Items]
Guarantor Obligations, Current Carrying Value	3,262
Guaranty Obligations, Guaranty Due Date	May 2015
Gansu Yulong Trading Co Ltd [Member]
Guarantor Obligations [Line Items]
Guarantor Obligations, Current Carrying Value	16,310
Guaranty Obligations, Guaranty Due Date	August 2017
Long Steel Group Fuping Rolling Steel Co., Ltd [Member]
Guarantor Obligations [Line Items]
Guarantor Obligations, Current Carrying Value	3,099
Guaranty Obligations, Guaranty Due Date	June 2015
Long Steel Group [Member]
Guarantor Obligations [Line Items]
Guarantor Obligations, Current Carrying Value	19,654
Guaranty Obligations, Guaranty Due Date	Various from April to September 2015
Shaanxi Haiyan Coke Group Co., Ltd
Guarantor Obligations [Line Items]
Guarantor Obligations, Current Carrying Value	$ 13,048
Guaranty Obligations, Guaranty Due Date	September 2015

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Capital lease obligations (Tables)

3 Months Ended

Mar. 31, 2015

Leases, Capital [Abstract]

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

Presented below is a schedule of estimated minimum lease payments on the capital lease obligation for the next five years as of March 31, 2015:

Year ending March 31,	Capital Lease Obligations Minimum Lease Payments
	(in thousands)
2016	$	10,665
2017		175,427
2018		33,657
2019		30,685
2020		29,621
Thereafter		317,780
Total minimum lease payments		597,835
Less: amounts representing interest		(191,741)
Ending balance	$	406,094

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Summary of significant accounting policies (Details 7) (USD $)	3 Months Ended		12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2016
Projected cash financing and outflows:
Cash projected to be used for financing cost in the twelve months ended March 31, 2016	$ 96,819,000	$ (89,616,000)
Scenario, Forecast [Member]
Summary Of Significant Accounting Policies [Line Items]
Current liabilities over current assets (excluding deferred lease income) as of March 31, 2015			(1,361,500,000)
Projected cash financing and outflows:
Cash provided by line of credit from banks			142,000,000
Cash provided by vendor financing			897,100,000
Cash provided by other financing			412,800,000
Cash provided by sales representatives			21,900,000
Cash projected to be used in operations in the twelve months ended March 31, 2016			(39,300,000)
Cash projected to be used for financing cost in the twelve months ended March 31, 2016			(46,200,000)
Net projected change in cash for the twelve months ended March 31, 2016			$ 26,800,000

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Plant and equipment, net (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Property, Plant and Equipment [Line Items]
Construction in progress	$ 9,835	$ 342,660
Construction In Progress Estimated Additional Cost	9,927
Restructuring of ventilation system [Member]
Property, Plant and Equipment [Line Items]
Construction in progress	2
Construction Completion Date	Dec. 31, 2015
Construction In Progress Estimated Additional Cost	979
Energy management system [Member]
Property, Plant and Equipment [Line Items]
Construction in progress	326
Construction Completion Date	Apr. 30, 2015
Construction In Progress Estimated Additional Cost	1,925
Reconstruction Of Miscellaneous Factory Buildings [Member]
Property, Plant and Equipment [Line Items]
Construction in progress	6,959
Construction Completion Date	Dec. 31, 2015
Construction In Progress Estimated Additional Cost	7,023
Project materials [Member]
Property, Plant and Equipment [Line Items]
Construction in progress	2,145
Construction In Progress Estimated Additional Cost	0
Others [Member]
Property, Plant and Equipment [Line Items]
Construction in progress	403
Construction In Progress Estimated Additional Cost	$ 0

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
CURRENT ASSETS:
Cash	$ 9,736	$ 11,641
Restricted cash	249,820	355,685
Notes receivable	1,606	10,290
Restricted notes receivable	80,889	111,801
Loans receivable	42,569	36,001
Loans receivable - related party	6,728	34,713
Accounts receivable, net	10,686	9,321
Accounts receivable - related parties, net	59,057	8,498
Other receivables, net	103,291	63,746
Other receivables - related parties, net	23,079	39,670
Inventories	148,295	156,327
Advances on inventory purchase, net	49,440	73,819
Advances on inventory purchase - related parties	95,757	45,617
Prepaid expense and other	5,279	4,803
Prepaid taxes	5,851	5,789
Short-term investment	7,503	2,688
TOTAL CURRENT ASSETS	899,586	970,409
PLANT AND EQUIPMENT, net	1,561,511	1,543,136
OTHER ASSETS:
Advances on equipment purchase	5,270	11,438
Investment in unconsolidated entities	16,705	16,823
Long-term deferred expense	452	458
Intangible assets, net of accumulated amortization	22,885	22,960
TOTAL OTHER ASSETS	45,312	51,679
TOTAL ASSETS	2,506,409	2,565,224
CURRENT LIABILITIES:
Short term notes payable	448,362	661,635
Accounts payable	608,678	612,801
Accounts payable - related parties	226,964	207,783
Short term loans - banks	232,148	257,502
Short term loans - others	51,995	60,717
Short term loans - related parties	217,397	46,380
Other payables and accrued liabilities	51,985	55,488
Other payables - related parties	96,277	87,252
Customer deposits	139,106	92,974
Customer deposits - related parties	148,176	132,616
Deposit due to sales representatives	19,361	17,871
Deposit due to sales representatives - related parties	2,553	2,509
Taxes payable	9,393	5,201
Deferred lease income, current	2,179	2,176
Capital lease obligations, current	8,678	8,508
TOTAL CURRENT LIABILITIES	2,263,252	2,251,413
NON-CURRENT LIABILITIES:
Long-term loans - related party	352,850	339,549
Deferred lease income, noncurrent	72,258	72,713
Capital lease obligations, noncurrent	397,416	393,252
Profit sharing liability at fair value	57,538	70,422
TOTAL NON-CURRENT LIABILITIES	880,062	875,936
TOTAL LIABILITIES	3,143,314	3,127,349
COMMITMENTS AND CONTINGENCIES
DEFICIENCY:
Preferred stock, $0.001 par value, 50,000,000 shares authorized, 3,092,899 shares issued and outstanding as of March 31, 2015 and December 31, 2014	3	3
Common stock, $0.001 par value, 200,000,000 shares authorized, 64,458,588 shares issued and 61,986,282 shares outstanding as of March 31, 2015 and December 31, 2014, respectively	64	64
Treasury stock, at cost, 2,472,306 shares as of March 31, 2015 and December 31, 2014	(4,199)	(4,199)
Paid-in-capital	115,563	115,494
Statutory reserves	6,539	6,472
Accumulated deficits	(508,674)	(463,521)
Accumulated other comprehensive income	163	644
TOTAL GENERAL STEEL HOLDINGS, INC. DEFICIENCY	(390,541)	(345,043)
NONCONTROLLING INTERESTS	(246,364)	(217,082)
TOTAL DEFICIENCY	(636,905)	(562,125)
TOTAL LIABILITIES AND DEFICIENCY	$ 2,506,409	$ 2,565,224

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Organization and Operations (Details Textual) In Millions, unless otherwise specified	3 Months Ended		3 Months Ended		3 Months Ended
	Mar. 31, 2015	Mar. 31, 2015 General Steel Investment Co Ltd [Member]	Mar. 31, 2015 Longmen Joint Venture [Member]	Apr. 29, 2011 Longmen Joint Venture [Member]	Mar. 31, 2015 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	20.00%	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%
Unified Management Agreement, Economic Interest	60.00%
Unified Management Agreement, Economic Interest Decreased	36.00%
Percentage Of Overall Capacity	75.00%

XML

Related party transactions and balances (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015		Mar. 31, 2014
Related Party Transaction [Line Items]
Revenue from Related Parties	$ 57,395		$ 82,206
Long Steel Group [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture
Revenue from Related Parties	11,270		44,800
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	9,578	[1]	15	[1]
Shaanxi Shenganda Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Significant influence by Long Steel Group
Revenue from Related Parties	15,998		20,736
Shaanxi Steel [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Majority shareholder of Long Steel Group
Revenue from Related Parties	481		471
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	20,068		4,969
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	0		6,618
Shaanxi Junlong Rolling Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Investee of Long Steel Group
Revenue from Related Parties	$ 0		$ 4,597

[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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Commitment and contingencies (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Guarantor Obligations [Line Items]
Guarantor Obligations, Current Carrying Value	$ 55,373
Line of credit [Member]
Guarantor Obligations [Line Items]
Guarantor Obligations, Current Carrying Value	52,274
Guaranty Obligations, Guaranty Due Date	Various from April 2015 to August 2017
Financing by the rights of goods delivery in future [Member]
Guarantor Obligations [Line Items]
Guarantor Obligations, Current Carrying Value	$ 3,099
Guaranty Obligations, Guaranty Due Date	June 2015

XML

Organization and Operations

3 Months Ended

Mar. 31, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [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 m ² sintering machine, two 1,280 m ³ blast furnaces, two 120 ton converters and some auxiliary systems, are managed collectively as a single virtual asset pool (“Asset Pool”). Longmen Joint Venture manages the Asset Pool as the principal operating entity and is responsible for the daily operations of the new and existing facilities. The Agreement leverages each of the parties’ operating strengths, allowing 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 cumulative 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”, Note 15 “Capital lease obligations” and Note 16 “Profit sharing liability”.

In view of the near-term challenges for the steel sector (see Note 2(d) Liquidity and Going Concern), the Company strategically accelerating the Company’s business transformation. The Company’s transformation strategy is to pursue opportunities that offer compelling benefits to our organization and shareholders, including:

· First, strengthen the Company’s financials while providing the financial flexibility to pursue higher return, higher growth opportunities;

· Second, reduce the complexity of the Company’s business structure, which is consistent with the Company’s objectives for internal simplification and operating efficiency;

· Third, diversify operating risk in order to lower the Company’s high reliance on steel business, while at the same time leverage on the Company’s vast vertical resources in the steel industry; and

· Fourth, pursue opportunities for additional value creation.

The Company formed a joint venture, Tianjin General Shengyuan IoT Technology Co., Ltd. (“General Shengyuan IoT”), in February of 2015 with an RFID Expert team to develop and commercialize RFID technologies and data solutions. The formation of this joint venture represents a unique opportunity to accelerate the Company’s expansion into the vibrant logistics and Internet-of-Things sectors. General Shengyuan IoT is still in the development stage and no revenues and significant operating expenses during the three months ended March 31, 2015.

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Taxes (Details Textual) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014	Dec. 31, 2013
Taxes [Line Items]
Percentage Of Deferred Tax Asset	100.00%
Value Added Tax Receivable	$ 2,000,000		$ 3,200,000
Value Added Tax On Sales	139,100,000	152,900,000
Value Added Tax On Purchases	132,200,000	151,900,000
Deferred Tax Assets, Valuation Allowance	123,716,000		114,820,000	97,569,000
Tax Initiative Extension Period	10 years
Operating Loss Carryforwards, Date Expiration	The Groups losses carried forward of $665.9 million will begin to expire in 2016.
Tax Rate Concession Percentage	15.00%
Deferred Tax Assets Valuation Period	5 years
UNITED STATES [Member]
Taxes [Line Items]
Percentage Of Deferred Tax Asset	100.00%
Valuation Allowance, Deferred Tax Asset, Change in Amount	0
Deferred Tax Assets, Valuation Allowance	$ 1,100,000
Operating Loss Carryforwards, Date Expiration	The net operating loss carry forwards for United States income taxes amounted to $3.2 million, which may be available to reduce future years taxable income. These carry forwards will expire, if not utilized, starting from 2027 through 2034.
Subsidiaries [Member]
Taxes [Line Items]
Effective Income Tax Rate Reconciliation, Percent	25.00%
Subsidiaries [Member] | Longmen Joint Venture [Member]
Taxes [Line Items]
Effective Income Tax Rate Reconciliation, Percent	15.00%
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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Summary of significant accounting policies (Details Textual)	3 Months Ended		12 Months Ended		3 Months Ended		0 Months Ended		3 Months Ended		12 Months Ended		3 Months Ended	12 Months Ended			3 Months Ended		12 Months Ended	3 Months Ended	1 Months Ended	3 Months Ended									12 Months Ended	3 Months Ended	12 Months Ended	3 Months Ended																		3 Months Ended									3 Months Ended											3 Months Ended
	Mar. 31, 2015 USD ($)	Mar. 31, 2014 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2013	Mar. 31, 2015 ASC 605-45, Revenue Recognition [Member] USD ($)	Mar. 31, 2014 ASC 605-45, Revenue Recognition [Member] USD ($)	Feb. 13, 2015 Tianjin General Shengyuan IoT Technology Co Ltd [Member] USD ($)	Feb. 13, 2015 Tianjin General Shengyuan IoT Technology Co Ltd [Member] CNY	Mar. 31, 2015 China GDP [Member] USD ($)	Mar. 31, 2015 Volume Inputs [Member]	Dec. 31, 2013 Volume Inputs [Member] Shaanxi GDP [Member]	Dec. 31, 2013 Volume Inputs [Member] China GDP [Member]	Mar. 31, 2015 Steel Sales Price Inputs [Member]	Dec. 31, 2014 Steel Sales Price Inputs [Member]	Dec. 31, 2013 Steel Sales Price Inputs [Member]	Dec. 31, 2013 Raw Material Cost Inputs [Member]	Mar. 31, 2015 Supplier Concentration Risk [Member]	Mar. 31, 2015 Supplier Concentration Risk [Member] Accounts Payable [Member]	Dec. 31, 2014 Supplier Concentration Risk [Member] Accounts Payable [Member]	Mar. 31, 2015 Sales [Member] Customer Concentration Risk [Member]	Nov. 30, 2014 Criteria One [Member]	Mar. 31, 2015 Criteria Two [Member]	Mar. 31, 2015 Criteria Three [Member]	Mar. 31, 2015 Criteria Four [Member]	Mar. 31, 2015 Maximum [Member]	Mar. 31, 2015 Minimum [Member]	Mar. 31, 2015 Mining Rights [Member] USD ($) Ton	Mar. 31, 2015 Mining Rights [Member] CNY Ton	Mar. 31, 2015 Customer One [Member] Sales [Member] Customer Concentration Risk [Member]	Mar. 31, 2015 Customer One [Member] Accounts Receivable [Member] Customer Concentration Risk [Member]	Dec. 31, 2014 Customer One [Member] Accounts Receivable [Member] Customer Concentration Risk [Member]	Mar. 31, 2015 Customer Two [Member] Sales [Member] Customer Concentration Risk [Member]	Dec. 31, 2014 Customer Two [Member] Accounts Receivable [Member] Customer Concentration Risk [Member]	Mar. 31, 2014 One Suppliers [Member] Supplier Concentration Risk [Member]	Mar. 31, 2015 Vendor Financing [Member] USD ($)	Mar. 31, 2015 Company E [Member] USD ($)	Mar. 31, 2015 Company A [Member] USD ($)	Mar. 31, 2015 Company A [Member] Vendor Financing [Member] USD ($)	Mar. 31, 2015 Company B [Member] USD ($)	Mar. 31, 2015 Company B [Member] Vendor Financing [Member] USD ($)	Mar. 31, 2015 Company D [Member] USD ($)	Mar. 31, 2015 Company F [Member] USD ($)	Mar. 31, 2015 Company G [Member] USD ($)	Mar. 31, 2015 Company H [Member] USD ($)	Mar. 31, 2015 Company C [Member] USD ($)	Mar. 31, 2015 Company C [Member] Vendor Financing [Member] USD ($)	Mar. 31, 2015 Shaanxi Coal and Chemical Industry Group Co Ltd [Member] USD ($)	Dec. 31, 2014 Shaanxi Coal and Chemical Industry Group Co Ltd [Member] USD ($)	Mar. 31, 2015 PRC Bank [Member] USD ($)	Dec. 31, 2014 PRC Bank [Member] USD ($)	Mar. 31, 2015 US And Hongkong Bank [Member] USD ($)	Mar. 31, 2015 Longmen Joint Venture [Member] USD ($)	Mar. 31, 2014 Longmen Joint Venture [Member] USD ($)	Mar. 31, 2015 Longmen Joint Venture [Member] CNY	Apr. 29, 2011 Longmen Joint Venture [Member]	Mar. 31, 2015 Yuxin Trading Co Ltd [Member]	Mar. 31, 2015 Hualong [Member]	Mar. 31, 2015 Hualong [Member] Shareholder One [Member]	Mar. 31, 2015 Hualong [Member] Shareholder Two [Member]	Mar. 31, 2015 Huatianyulong [Member]	Mar. 31, 2015 General Steel Investment Co Ltd [Member] USD ($)	Mar. 31, 2015 General Steel Investment Co Ltd [Member] CNY	Mar. 31, 2015 Maoming Hengda Steel Company Ltd [Member] USD ($)	Mar. 31, 2014 Maoming Hengda Steel Company Ltd [Member] USD ($)	Mar. 31, 2015 Maoming Hengda Steel Company Ltd [Member] CNY	Dec. 31, 2014 Baotou Iron and Steel Group [Member] USD ($)	Dec. 31, 2014 Baotou Iron and Steel Group [Member] CNY	Mar. 31, 2015 Yangpu Shengtong Investment Co Ltd [Member]	Mar. 31, 2015 Tianjin Qiu Steel Investment Co Ltd [Member]	Mar. 31, 2015 Tianwu General Steel Material Trading Co Ltd [Member]	Dec. 31, 2014 Tianwu General Steel Material Trading Co Ltd [Member]	Mar. 31, 2015 Baotou Steel Pipe Joint Venture [Member] USD ($)	Mar. 31, 2014 Baotou Steel Pipe Joint Venture [Member] USD ($)	Mar. 31, 2015 Shaanxi Iron and Steel Group [Member] USD ($)	Mar. 31, 2015 Shaanxi Iron and Steel Group [Member] CNY
Summary Of Significant Accounting Policies [Line Items]
Equity Method Investment, Ownership Percentage	20.00%						70.00%	70.00%																																												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	$ 1,400,000,000
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners																																																												50.00%
Debt To Equity Ratio	(4.9)		(5.6)
Due to Related Parties	352,850,000		339,549,000																																	30,100,000	77,600,000		63,400,000		8,300,000	42,700,000	0	900,000
Vendor Financing, Variable Interest Rate																																																				0.05%
Line Of Credit Amount Utilized	39,500,000
Cash and Cash Equivalents Including Restricted Cash																																																	259,600,000	367,200,000
Deposits Assets																																															600,000	1,000,000
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent, Total	200,000		600,000
Foreign Currency Exchange Translation Rate Balance Sheet Items	6.13		6.14
Foreign Currency Exchange Average Translation Rate	6.15	6.12
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
Percentage Of Ownership, Significant Influence																									50.00%	20.00%
Income (Loss) from Equity Method Investments, Net of Dividends or Distributions	10,000	(40,000)
Fair Value Inputs, Discount Rate	6.70%
Restricted Notes Receivable Interest Income	8,000,000	14,100,000
Concentration Risk, Percentage																	10.00%	10.00%	10.00%	10.00%									12.10%	81.70%	32.10%	10.50%	20.50%	15.40%
Finite lived Intangible Asset Acquired	12,900,000																										2,400,000	15,000,000																								24,200,000		148,300,000							3,900,000	23,700,000	2,700,000		16,600,000
Profit Sharing Liability Fair Value Criteria																					the Peoples Bank of China decreased standard bank borrowing rate across the board by 0.4%. Accordingly, the Company adjusted down the present value discount rate for profit sharing liability by 0.4% from 7.3% to 6.9%. On May 11, 2015, the Peoples Bank of China decreased the standard bank borrowing rate again across the board by 0.25%. Accordingly, the Company adjusted down the present value discount rate for profit sharing liability by 0.25% from 6.9% to 6.7%	0.1 million reduction resulting from the Asset Pools operating results for the year ended December 31, 2014 being slightly less favorable than previously estimated as of December 31, 2013, offset by a $8.1 million loss resulting from the 0.4% reduction of the present value discount rate and a $11.5 million loss from the present value discount.	If we were to reduce the projected bank borrowings rate used to discount the liability to a present value by 1.0% and other factors remained unchanged, our profit sharing liability as of March 31, 2015 would have been $66.2 million and we would increase the loss from the change in the fair value of the profit sharing liability by $8.7 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 March 31, 2015 would have been $53.1 million and we would increase the gain from the change in the fair value of the profit sharing liability by $4.4 million
Profit Sharing Liability	110,600,000								57,500,000
Gain Loss On Change In Fair Value Of Profit Sharing Liability	91,000,000
Percentage Of Equity Interest Sold																																																																		80.00%	80.00%
Proceeds From Sale Of Equity Interest																																																																		700,000	4,000,000
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
Unified Management Agreement, Cost Of Asset																																																																										2,300,000	14,600,000
Long-term Line of Credit	142,000,000																																		897,100,000			244,700,000		163,100,000					16,200,000	489,300,000
Cash Surrender Value of Life Insurance																																																			10,000
Due from Related Parties	23,143,000		39,734,000																																																	21,900,000
Intangible Asset Estimated Recoverable Reserve																											4,200,000	4,200,000
Acquired Finite Lived Intangible Assets Expiry Term																																																				expire in 2048 to 2052									expire in 2050 and 2053	expire in 2050 and 2053
Decreased Percentage Of Estimated Future Results	40.00%			0.40%					0.25%	3.00%	1.40%	0.40%			5.60%	4.70%
Decreased Percentage Of Profit Sharing			1.75%										7.00%	12.00%
Payments to Acquire Interest in Joint Venture							1,600,000	10,000,000
Cost of Goods Sold, Total	297,565,000	530,744,000			107,700,000	38,200,000
Gross Loss	$ 32,147,000	$ 22,561,000			$ 64,994	$ 288,513																																														$ 32,147,000	$ 22,219,000										$ 0	$ (24,000)								$ 0	$ 23,000

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Related party transactions and balances (Details 4) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Related Party Transaction [Line Items]
Accounts Receivable, Related Parties, Current	$ 59,183	$ 8,624
Long Steel Group [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture
Accounts Receivable, Related Parties, Current	151	148
Shaanxi Coal and Chemical Industry Group Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Shareholder of Shaanxi Steel
Accounts Receivable, Related Parties, Current	56,982	0
Shaanxi Shenganda Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Significant influence by Long Steel Group
Accounts Receivable, Related Parties, Current	0	5,715
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
Shaanxi Steel [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Majority shareholder of Long Steel Group
Accounts Receivable, Related Parties, Current	2,031	2,101
Others [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Entities either owned or have significant influence by our affiliates or management
Accounts Receivable, Related Parties, Current	$ 0	$ 641

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Inventories (Tables)

3 Months Ended

Mar. 31, 2015

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

Inventories consist of the following:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Supplies	$	17,327	$	18,838
Raw materials		100,509		143,563
Finished goods		43,086		12,301
Less: allowance for inventory valuation		(12,627)		(18,375)
Total inventories	$	148,295	$	156,327

Summary Of Inventory Valuation Allowance [Table Text Block]

Movement of allowance for inventory valuation is as follows:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Beginning balance	$	18, 375	$	15,397
Addition		12,581		18,362
Less: write-off		(18,329)		(15,311)
Exchange rate effect		-		(73)
Ending balance	$	12,627	$	18,375

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Other receivables (including related parties), net (Details 1) (Other Receivables [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Other Receivables [Member]
Beginning balance	$ 10,262	$ 2,606
Charge to expense	1,260	7,670
Less: recovery	(5)	(6)
Exchange rate effect	17	(8)
Ending balance	$ 11,534	$ 10,262

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Other income (expense)

3 Months Ended

Mar. 31, 2015

Other Income and Expenses [Abstract]

Other Income and Other Expense Disclosure [Text Block]

Note 17 – Other income (expense)

Lease income

The deferred lease income from the reimbursement from Shaanxi Steel for the net book value of the fixed assets that were demolished and for the inefficiency costs caused by the construction and loss incurred in the beginning stages of the system production is amortized to income over the remaining sub-lease term. For the three months ended March 31, 2015 and 2014, the Company recognized lease income of $0.5 million and $0.5 million, respectively.

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Advances on inventory purchases (Tables)

3 Months Ended

Mar. 31, 2015

Inventory Disclosure [Abstract]

Schedule Of Advances On Inventory Purchases [Table Text Block]

Advances on inventory purchases, including related party, net of allowance for doubtful accounts consists of the following:  

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Advances on inventory purchases	$	51,944	$	76,320
Less: allowance for doubtful accounts		(2,504)		(2,501)
Advances on inventory purchases – related parties		95,757		45,617
Net advances on inventory purchases	$	145,197	$	119,436

Schedule Of Credit Losses Related To Advances On Inventory Purchase [Table Text Block]

Movement of allowance for doubtful accounts, including related parties, is as follows:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Beginning balance	$	2,501	$	105
Charge to expense		-		2,395
Exchange rate effect		3		1
Ending balance	$	2,504	$	2,501

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Related party transactions and balances (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015		Dec. 31, 2014
Related Party Transaction [Line Items]
Loans receivable - related parties	$ 6,728		$ 34,713
Tianjin Hengying Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Partially owned by CEO through indirect shareholding	[1]
Loans receivable - related parties	622	[1]	13,997	[1]
Tianjin Dazhan Industry Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Partially owned by CEO through indirect shareholding	[1]
Loans receivable - related parties	0	[1]	14,617	[1]
Beijing Shenghua Xinyuan Metal Materials Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Partially owned by CEO through indirect shareholding
Loans receivable - related parties	$ 6,106		$ 6,099

[1] The Company reclassified advances for inventory purchase - related parties related to trading transactions, as noted in note 2(g), to loans receivable - related parties due to their interest-bearing nature.

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Related party transactions and balances

3 Months Ended

Mar. 31, 2015

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

Note 19 – Related party transactions and balances

Related party transactions

a. Capital lease

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

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Machinery	$	603,618	$	602,878
Less: accumulated depreciation		(112,298)		(105,001)
Carrying value of leased assets	$	491,320	$	497,877

b. The following chart summarized sales to related parties for the three months ended March 31, 2015 and 2014. 

Name of related parties	Relationship	Three months ended March 31, 2015		Three months ended March 31, 2014
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	11,270	$	44,800
Shaanxi Haiyan Trade Co., Ltd	Significant influence by Long Steel Group*		9,578		15
Shaanxi Shenganda Trading Co., Ltd	Significant influence by Long Steel Group		15,998		20,736
Shaanxi Steel	Majority shareholder of Long Steel Group		481		471
Shaanxi Coal and Chemical Industry Group Co., Ltd.	Shareholder of Shaanxi Steel		20,068		4,969
Shaanxi Long Steel Group Baoji Steel Rolling Co., Ltd	Subsidiary of Long Steel Group		-		6,618
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		-		4,597
Total		$	57,395	$	82,206

Sales to related parties in trading transactions, which were netted against the corresponding cost of goods sold, amounted to $91.0 million and $33.3 million for the three months ended March 31, 2015 and 2014, respectively. See Note 2(m) Revenue Recognition for details.

*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.

c. The following charts summarize purchases from related parties for the three months ended March 31, 2015 and 2014.

Name of related parties	Relationship	Three months ended March 31, 2015		Three months ended March 31, 2014
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	5,993	$	151,772
Hancheng Haiyan Coking Co., Ltd	Noncontrolling shareholder of Long Steel Group		48,147		44,088
Xi’an Pinghe Metallurgical Raw Material Co., Ltd	Noncontrolling shareholder of Long Steel Group		1,072		904
Shaanxi Coal and Chemical Industry Group Co., Ltd	Shareholder of Shaanxi Steel		1,505		-
Shaanxi Huafu New Energy Co., Ltd	Significant influence by the Long Steel Group		5,960		6,660
Tianwu General Steel Material Trading Co., Ltd.	Investee of General Steel (China)		36,174		23,339
Tianjin General Quigang Pipe Co., Ltd	Partially owned by CEO through indirect shareholding**		3,287		4,275
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		-		27,919
Others	Entities either owned or have significant influence by our affiliates or management		331		47
Total		$	102,469	$	259,004

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

Related party balances

a. Loans receivable – related parties:

Name of related parties	Relationship	March 31, 2015		December 31, 2014
		(in thousands)		(in thousands)
Tianjin Hengying Trading Co., Ltd.*	Partially owned by CEO through indirect shareholding	$	622	$	13,997
Tianjin Dazhan Industry Co., Ltd.*	Partially owned by CEO through indirect shareholding		-		14,617
Beijing Shenghua Xinyuan Metal Materials Co., Ltd.	Partially owned by CEO through indirect shareholding		6,106		6,099
Total		$	6,728	$	34,713

*The Company reclassified advances for inventory purchase - related parties related to trading transactions, as noted in note 2(g), to loans receivable - related parties due to their interest-bearing nature.

The Company issued loans to these related parties for cash flow purposes to earn interest income, which have a higher interest rate than the bank financing interest rates.

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

b. Accounts receivables – related parties:

Name of related parties	Relationship	March 31, 2015		December 31, 2014
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	151	$	148
Shaanxi Coal and Chemical Industry Group Co., Ltd.	Shareholder of Shaanxi Steel		56,982		-
Shaanxi Shenganda Trading Co., Ltd.	Significant influence by Long Steel Group		-		5,715
Tianjin Daqiuzhuang Steel Plates	Partially owned by CEO through indirect shareholding		19		19
Shaanxi Steel	Majority shareholder of Long Steel Group		2,031		2,101
Others			-		641
Total		$	59,183	$	8,624

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	March 31, 2015		December 31, 2014
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	1,219	$	165
Shaanxi Steel	Majority shareholder of Long Steel Group		1,141		35,669
Tianjin General Quigang Pipe Co., Ltd*	Partially owned by CEO through indirect shareholding		17,939		1,237
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		927		721
Beijing Shenghua Xinyuan Metal Materials Co., Ltd.	Partially owned by CEO through indirect shareholding		466		313
Victory Energy Resource Co., Ltd.	Partially owned by CEO through indirect shareholding		1,101		1,101
Others	Entities either owned or have significant influence by our affiliates or management		350		528
Total		$	23,143	$	39,734

^* Full balance has been repaid subsequently to March 31, 2015 by this entity.

d. Advances on inventory purchase – related parties:

Name of related parties	Relationship	March 31, 2015		December 31, 2014
		(in thousands)		(in thousands)
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture	$	7,269	$	7,139
Shaanxi Shenganda Trading Co., Ltd.	Significant influence by Long Steel Group		-		27,549
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		3,873		3,807
Tianjin General Qiugang Pipe Co., Ltd*	Partially owned by CEO through indirect shareholding		84,547		7,091
Others	Entities either owned or have significant influence by our affiliates or management		68		31
Total		$	95,757	$	45,617

^*During the three months ended March 31, 2015, the Company entered into a purchase agreement with this entity to purchase steel related products to resell to Tianwu General Steel Material Trading Co., Ltd. (see Note 19 (h) Customer deposit – related parties). The term of the agreement is expected to be fulfilled within three months after deposits were made. The purchase advances are refundable. For the three months ended March 31, 2015, the Company made $61.9 million of purchase advances of which $3.3 million were utilized. The entity also acts as a customer in the Company’s trading transactions. During the three months ended March 31, 2015, the Company sold approximately $16.0 million to this entity. For the three months ended March 31, 2014, the Company made $29.5 million of purchase advances of which $4.3 million was utilized. The entity also acts as a customer in the Company’s trading transactions. During the three months ended March 31, 2014, the Company sold $1.4 million to this entity.

e. Accounts payable - related parties:

Name of related parties	Relationship	March 31, 2015		December 31, 2014
		(in thousands)		(in thousands)
Hancheng Haiyan Coking Co., Ltd	Noncontrolling shareholder of Longmen Joint Venture	$	77,617	$	64,276
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		94,006		79,886
Shaanxi Coal and Chemical Industry Group Co., Ltd.	Shareholder of Shaanxi Steel		14,828		23,726
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		870		869
Xi’an Pinghe Metallurgical Raw Material Co., Ltd	Noncontrolling shareholder of Long Steel Group		10,829		11,035
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		-		1
Henan Xinmi Kanghua Fire Refractory Co., Ltd	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		1,002		746
Beijing Daishang Trading Co., Ltd	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary		28		36
Tianjin General Qiugang Pipe Co., Ltd	Partially owned by CEO through indirect shareholding		-		2,462
Tianwu General Steel Material Trading Co., Ltd.	Investee of General Steel (China)		7,986		22,916
Maoming Shengze Trading Co., Ltd	Partially owned by CEO through indirect shareholding		4,274		1,773
Shaanxi Steel	Majority shareholder of Long Steel Group		683		-
Shaanxi Shenganda Trading Co, Ltd.	Significant influence by Long Steel Group		14,834		-
Others	Entities either owned or have significant influence by our affiliates or management		7		57
Total		$	226,964	$	207,783

f. Short-term loans - related parties:

Name of related parties	Relationship	March 31, 2015		December 31, 2014
		(in thousands)		(in thousands)
Shaanxi Steel Group Hanzhong Steel Co., Ltd.	Subsidiary of Shaanxi Steel	$	8,155	$	-
Shaanxi Steel	Majority shareholder of Long Steel Group		91,173		-
Shaanxi Coal and Chemical Industry Group Co., Ltd	Shareholder of Shaanxi Steel		68,754		34,460
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		30,533		-
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		7,610		3,039
Tianjin General Quigang Pipe Co., Ltd.	Partially owned by CEO through indirect shareholding		3,262
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		7,240		8,211
Yangpu Capital Automobile	Partially owned by CEO through indirect shareholding		670		670
Total		$	217,397	$	46,380

See Note 9 – Debt for the loan details.

g. 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	March 31, 2015		December 31, 2014
		(in thousands)		(in thousands)
Tianjin Hengying Trading Co, Ltd	Partially owned by CEO through indirect shareholding	$	378	$	378
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		28,277		33,968
Shaanxi Steel	Majority shareholder of Long Steel Group		27,745		44,146
Wendlar Investment & Management Group Co., Ltd	Common control under CEO		1,180		1,196
Yangpu Capital Automobile	Partially owned by CEO through indirect shareholding		416		399
Tianjin Dazhan Industry Co., Ltd	Partially owned by CEO through indirect shareholding		3,750		3,883
Maoming Shengze Trading Co., Ltd	Partially owned by CEO through indirect shareholding		157		2,775
Shaanxi Shenganda Trading Co., Ltd.	Significant influence by Long Steel Group		13,350		-
Teamlink Investment Co., Ltd	Partially owned by CEO through indirect shareholding		20,500		-
Others	Entities either owned or have significant influence by our affiliates or management		524		507
Total		$	96,277	$	87,252

h. Customer deposits – related parties:

Name of related parties	Relationship	March 31, 2015		December 31, 2014
		(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		7,414		4,467
Shaanxi Haiyan Trade Co, Ltd	Significant influence by Long Steel Group		5,391		6,844
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		28,863		23,517
Shaanxi Junlong Rolling Co., Ltd	Investee of Long Steel Group		16		57
Shaanxi Shenganda Trading Co., Ltd	Significant influence by Long Steel Group		1,960		-
Tianwu General Steel Material Trading Co., Ltd.*	Investee of General Steel (China)		104,522		97,721
Total		$	148,176	$	132,616

^*This entity is one of the Company’s trading partners and sells or purchases the steel related products to or from the Company.  During three months ended March 31, 2015 and 2014, the Company received   $6.7 million and $71.8 million of deposits from this entity, of which, no trading sales transactions were utilized. During the year ended December, 31 2014 and the first quarter of 2015, the Company received a total deposits of RMB 600 million (approximately $104.0 million) from this entity. The deposits are refundable.

i. Deposits due to sales representatives – related parties

Name of related parties	Relationship	March 31, 2015		December 31, 2014
		(in thousands)		(in thousands)
Hancheng Haiyan Trade Co., Ltd	Significant influence by Long Steel Group	$	652	$	652
Gansu Yulong Trading Co., Ltd.	Significant influence by Long Steel Group		1,076		1,075
Long Steel Group	Noncontrolling shareholder of Longmen Joint Venture		196		196
Shaanxi Yuchang Trading Co., Ltd	Significant influence by Long Steel Group		587		586
Shaanxi Junlong Rolling Co., Ltd.	Investee of Long Steel Group		42		-
Total		$	2,553	$	2,509

j. Long-term loans – related party:

Name of related party	Relationship	March 31, 2015		December 31, 2014
		(in thousands)		(in thousands)
Shaanxi Steel	Majority shareholder of Long Steel Group	$	352,850	$	339,549
Total		$	352,850	$	339,549

The Company also provided guarantee on related parties’ bank loans amounting to $49.0 million and $82.3 million as of March 31, 2015 and as of December 31, 2014, respectively.

k. Deferred lease income

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Beginning balance	$	74,889	$	77,444
Less: Lease income realized		(544)		(2,176)
Exchange rate effect		92		(379)
Ending balance		74,437		74,889
Current portion		(2,179)		(2,176)
Noncurrent portion	$	72,258	$	72,713

For the three months ended March 31, 2015 and 2014, the Company realized lease income from Shaanxi Steel, a related party, amounted to $0.5 million and $0.5 million, respectively.

XML

Inventories (Details Textual) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Inventory Valuation Reserves	$ 12,627	$ 18,375	$ 15,397

XML

Related party transactions and balances (Details 13) (USD $) In Thousands, unless otherwise specified	3 Months Ended		12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Related Party Transaction [Line Items]
Beginning balance	$ 74,889	$ 77,444	$ 77,444
Less: Lease income realized	(543)	(546)	(2,176)
Exchange rate effect	92		(379)
Ending balance	74,437		74,889
Current portion	(2,179)		(2,176)
Noncurrent portion	$ 72,258		$ 72,713

XML

Summary of significant accounting policies

3 Months Ended

Mar. 31, 2015

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 2014 annual report on Form 10-K filed on April 10, 2015.

(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	%
Tianjin General Shengyuan IoT Technology Co., Ltd. (“General Shengyuan”)	PRC		70.0	%
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	%

Baotou Steel

Prior to December 31, 2014, the Company held an 80.0% equity interest in Baotou Steel – General Steel Special Steel Pipe Joint Venture Co., Ltd. (“Baotou Steel”) through General Steel (China). On December 31, 2014, the Company sold its 80.0% equity interest in Baotou Steel to Tianjin Shuangjie Liansheng Rolled Steel Co., Ltd., an unrelated party for $0.7 million (RMB 4.0 million), receivable within one year of the sale. As a result of this transaction, the Company met the criteria under ASC 810-10-40-4 to deconsolidate Baotou Steel at disposal date and recognized a gain in accordance with ASC 810-10-40-5.

General Shengyuan

On February 13, 2015, the Company formed a joint venture entity, Tianjin General Shengyuan IoT Technology Co., Ltd, with a team of radio-frequency identification (“RFID”) experts (the “Expert Team”), to develop and commercialize RFID technology data solutions. Under the terms of the Agreement, the Company owned 70% of the joint venture by contributing $1.6 million (RMB 10.0 million), while the Expert Team committed to contribute intellectual property, including proprietary RFID technologies, licensed patents and domain expertise.

(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(d) Liquidity and Going Concern.

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:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Current assets	$	726,110	$	837,135
Plant and equipment, net		1,557,027		1,537,687
Other noncurrent assets		27,024		33,396
Total assets		2,310,161		2,408,218
Total liabilities		(2,920,281)		(2,946,126)
Net liabilities	$	(610,120)	$	(537,908)

VIE and its subsidiaries’ liabilities consist of the following:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Current liabilities:
Short term notes payable	$	432,052	$	638,829
Accounts payable		596,221		605,025
Accounts payable - related parties		222,595		205,914
Short term loans - bank		191,536		216,940
Short term loans - others		45,795		54,524
Short term loans - related parties		209,553		45,710
Other payables and accrued liabilities		44,286		47,121
Other payables - related parties		69,890		78,615
Customer deposits		129,896		87,372
Customer deposits - related parties		43,654		34,895
Deposit due to sales representatives		19,361		17,871
Deposit due to sales representatives – related parties		2,553		2,509
Taxes payable		8,192		4,026
Deferred lease income		2,179		2,176
Capital lease obligations, current		8,678		8,508
Intercompany payable to be eliminated		13,778		20,155
Total current liabilities		2,040,219		2,070,190
Non-current liabilities:
Long term loans - related parties		352,850		339,549
Deferred lease income - noncurrent		72,258		72,713
Capital lease obligations, noncurrent		397,416		393,252
Profit sharing liability		57,538		70,422
Total non-current liabilities		880,062		875,936
Total liabilities of consolidated VIE	$	2,920,281	$	2,946,126

	Three months ended March 31, 2015		Three months ended March 31, 2014
	(in thousands)		(in thousands)
Sales	$	328,158	$	594,014
Gross loss	$	(32,147)	$	(22,219)
Loss from operations	$	(53,498)	$	(39,294)
Net loss attributable to controlling interest	$	(42,405)	$	(38,034)

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 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 March 31, 2015 and December 31, 2014 and for the three months ended March 31, 2015 and 2014, 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 March 31, 2015 and December 31, 2014 and for the three months ended March 31, 2015 and 2014, 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 a majority voting rights in each entity, and thereby, the power of control, to Longmen Joint Venture.

(d) Liquidity and going concern

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

The steel business is capital intensive and as a normal industry practice in PRC, the Company is highly leveraged. Debt financing in the form of short term bank loans, loans from related parties, financing sales, bank acceptance notes, and capital leases have been utilized to finance the working capital requirements and the capital expenditures of the Company. As a result, the Company’s debt to equity ratio as of March 31, 2015 and December 31, 2014 were (4.9) and (5.6), respectively. As of March 31, 2015, the Company’s current liabilities exceed current assets (excluding non-cash item) by $1.4 billion, which together with the gross loss from operations raises substantial doubt about its ability to continue as a going concern.

Our steel business has faced very tough market conditions and challenging profitability over the last several years, and based on current trends, we think the near-term challenges for the steel sector will likely linger. In reaction to this challenging market, we are proactively reviewing our strategy and asset portfolio and seeking to restructure low-efficient, non-core assets, as well as idle land resources to unlock hidden fair value.

The Company aims to transform into a leaner and fitter organization with better profitability. As such, the Company is strategically accelerating its business transformation to pursue opportunities that offer compelling benefits to the Company and shareholders, including:

· First, strengthen the Company’s financials while providing the financial flexibility to pursue higher return, higher growth opportunities;

· Second, reduce the complexity of the Company’s business structure, which is consistent with our objectives for internal simplification and operating efficiency;

· Third, diversify operating risk in order to lower the Company’s high reliance on steel business, while at the same time leverage on the Company’s vast vertical resources in the steel industry; and

· Fourth, pursue opportunities for additional value creation.

Management has implemented the following plans that are intended to mitigate the conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern.

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

Line of credit

The Company has lines of credit from the listed major banks totaling $142.0 million with expiration dates ranging from January 21, 2016 to October 14, 2016.

Banks	Amount of Line of Credit (in millions)		Repayment Date
China Everbright Bank		19.6	January 21, 2016*
Huaxia Bank		24.5	January 30, 2016*
Bank of Beijing		81.6	October 14, 2016
Bank of Xi’an		16.3	February 4, 2016*
Total	$	142.0

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

As of the date of this report, the Company utilized $39.5 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 $897.1 million with the following companies:

Company	Financing Period	Financing Amount (in millions)
Company A – related party	July 30, 2014 – July 30, 2019	$	244.7
Company B – third party	January 22, 2014 – January 22, 2017		163.1
Company C – third party	October 1, 2013 – March 31, 2016		489.3
Total		$	897.1

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 $244.7 million. Company B signed a three-year agreement with Longmen Joint Venture on January 22, 2014 to finance its coke purchases up to $163.1 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, the Company’s payables to Company A and Company B were approximately $77.6 million and $63.4 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 $489.3 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, the Company’s payable to Company C was approximately $16.2 million

Other financing

On April 22, 2014, April 23, 2014, and April 30, 2015, Longmen Joint Venture signed two-to-three-year payment extension agreements with Company D, E, F, G and H listed below. In total, Longmen Joint Venture can obtain $412.8 million in financial support from 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	$	81.6
Company E – related party	April 23, 2014 – April 23, 2017		86.4
Company F – related party	April 22, 2014 – April 22, 2017		81.6
Company G – related party	April 30, 2015 – April 30, 2018		81.6
Company H – related party	April 30, 2015 – April 30, 2018		81.6
Total		$	412.8

As of the date of this report, our payables to Company D, Company E, Company F, Company G, and Company H are approximately $8.3 million, $30.1 million, $42.7 million, $0, and $0.9 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 March 31, 2015, Longmen Joint Venture has collected a total amount of $21.9 million. Historically, this amount is quite stable and we do not expect a big fluctuation in this amount for the next twelve months from March 31, 2015 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 March 31, 2016. However, this opinion is based on the demand of the Company's products, economic conditions, the overcapacity issue in the steel industry and the Company's operating results not continuing to deteriorate and on our vendors and related parties being able to provide continued liquidity, as summarized below. The detailed breakdown of Longmen Joint Venture’s estimated cash flows items are listed below.

	Cash inflow (outflow) (in millions)
	For the twelve months ended March 31, 2016
Current liabilities over current assets (excluding deferred lease income) as of March 31, 2015 (unaudited)	$	(1,361.5)
Projected cash financing and outflows:
Cash provided by line of credit from banks		142.0
Cash provided by vendor financing		897.1
Cash provided by other financing		412.8
Cash provided by sales representatives		21.9
Cash projected to be used in operations in the twelve months ended March 31, 2016		(39.3)
Cash projected to be used for financing cost in the twelve months ended March 31, 2016		(46.2)
Net projected change in cash for the twelve months ended March 31, 2016	$	26.8

(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 for property, plant and equipment, and potential losses on uncollectible receivables, allowance for inventory valuation, the interest rate used in the financing sales, the fair value of the assets recorded under capital lease and the present value of the net minimum lease payments of the capital lease. Actual results could differ from these estimates.

One of the Company’s most significant estimates is the determination of fair value of the profit sharing liability. Since the liability is calculated and largely based on management’s expectations of product demand, pricing, raw materials cost and projected manufacturing efficiencies, it is susceptible to material changes when actual results deviate from those expectations. While management believes its current assumptions are reasonable and achievable, there is no assurance that those future expectations will be met or that significant adjustments won’t be required in the future.

(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.

Through the quarterly ended March 31, 2015, the Company has incurred recurring losses from the Company’s operations from the last several years as the Company’s steel business has faced very tough market conditions and challenging profitability. Management has continued its effort to implementing cost savings on our manufacturing overhead costs and to reduce our unit production cost. The Company has forecasted its loss will be continued until year 2017 and expected to make a turning point and become profitable in year 2018 and beyond. The Company’s forecast is based on current market condition, if the future market condition is different from its forecast, the Company might continue to incur additional loss in 2018 and beyond and the Company’s assets pool of its long-lived assets may become impaired.

The Company has significant exposure to the price fluctuation of raw materials and energy prices as part of its normal operations. As of March 31, 2015 and December 31, 2014, the Company did not have any open commodity contracts to mitigate such risks.

Cash includes demand deposits in accounts maintained with banks within the PRC, Hong Kong and the United States. Total cash (including restricted cash balances) in these banks on March 31, 2015 and December 31, 2014 amounted to $259.6 million and $367.2 million, including $0.6 million and $1.0 million that were deposited in Shaanxi Coal and Chemical Industry Group Financial Co., Ltd., a related party, respectively. As of March 31, 2015, $0.01 million cash in the bank was covered by insurance. The Company has not experienced any losses in other bank accounts and believes it is not exposed to any risks on its cash in bank accounts.

Two of the Company’s customers individually accounted for 12.1% and 10.5% of total sales for the three months ended March 31, 2015, respectively. One customer individually accounted for  81.7% of total accounts receivable, including related parties as of March 31, 2015. None of the Company’s customers accounted for more than 10% of total sales for the three months ended March 31, 2014. Two customers individually accounted for 32.1% and 20.5% of total accounts receivable, including related parties as of December 31, 2014, respectively.

None of the Company’s suppliers individually accounted for more than 10% of the total purchases for the three months ended March 31, 2015 and one of the Company’s suppliers individually accounted for 15.4% of the total purchases for the three months ended March 31, 2014. None of the Company’s suppliers individually accounted for more than 10% of total accounts payable as March 31, 2015 and December 31, 2014.

(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 statement of operations accounts are translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statement of equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

Translation adjustments included in accumulated other comprehensive income amounted to $0.2 million and $0.6 million as of March 31, 2015 and December 31, 2014, respectively. The balance sheet amounts, with the exception of equity at March 31, 2015 and December 31, 2014 were translated at 6.13 RMB and 6.14 RMB to $1.00, respectively. The equity accounts were stated at their historical rate. The average translation rates applied to statement of operations accounts for the three months ended March 31, 2015 and 2014 were 6.15 RMB and 6.12 RMB, respectively. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheet.

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

(h) Financial instruments

The accounting 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 market 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.

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 6.7%.

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. On November 22, 2014, the People’s Bank of China decreased standard bank borrowing rate across the board by 0.4%. Accordingly, the Company adjusted down the present value discount rate for profit sharing liability by 0.4% from 7.3% to 6.9%. On May 11, 2015, the People’s Bank of China decreased the standard bank borrowing rate again across the board by 0.25%. Accordingly, the Company adjusted down the present value discount rate for profit sharing liability by 0.25% from 6.9% to 6.7%.

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

The above assumptions were reviewed by the Company at March 31, 2015 and December 31, 2014 and the assumptions related to the projected growth in the steel market and costs were revised, resulting in a further reduction of the estimated profit sharing liability.

The major drivers of the change in our estimate were the continuing decrease in the selling price of our products as well as a continuing downtrend in the sluggish infrastructure investment and consumption growth for the next ten years or so. As such, as of December 31, 2014 financial statement issuance we had lowered our projected growth in the steel market for approximately ten years as compared to our previous estimates at December 31, 2013. The variables and the impact on our inputs to the 2014 valuation of profit sharing fair value, as compared to the 2013 valuation of the profit sharing fair value can be summarized as follows:

- Volume Inputs: The most recent 5 year China GDP forecast and Shaanxi GDP forecast decreased on average by 0.4% and 1.4% of GDP, respectively, versus the forecast used in 2013.

- Steel Sales Price Inputs: The most recent China Steel Association price index, together with our actual result decreased, on average, by 5.6% versus the same forecast used in 2013.

- Raw Material Cost Inputs: The most recent China Steel Association price index, together with the our actual result decreased, on average, by 4.7% versus the same forecast used in 2013

The above reduced our Gross Profit % over the next 5 years by, on average, 0.4% from the 2013 valuation. In addition, the above reduced our Gross Profit % over the remaining profit sharing period of 11.33 years by, on average, 1.75% from the 2013 valuation at December 31, 2014.

As a result of the changes in valuation inputs noted above for the year ended December 31, 2014, the Company recognized a gain on the change in the fair value of the profit sharing liability of $91.0 million due to a $110.6 million reduction in the fair value of profit sharing liability resulting from the change in estimates of future operating profits and a $0.1 million reduction resulting from the Asset Pool’s operating results for the year ended December 31, 2014 being slightly less favorable than previously estimated as of December 31, 2013, offset by a $8.1 million loss resulting from the 0.4% reduction of the present value discount rate and a $11.5 million loss from the present value discount.

For the three months ended March 31, 2015, the Company recognized a $12.9 million reduction in the fair value of profit sharing liability resulting from the change in estimates of future operating profits based on the April 2015 actual operating results and consideration for Chinese steel market trends in April 2015  as well as the May 11, 2015 change to the Borrowing Rate by 0.25%. These further recent changes in market conditions resulted in a decrease in the expected liability of $16.6 million primarily from adjustments to the 2015 and 2016 expected cash flows as well as a $2.5 million loss from the reduction in the present value discount rate of 0.25% and a $1.2 million loss from the present value discount. The estimated fair value of the profit sharing liability at March 31, 2015 is $57.5 million.

The variables and the impact on our inputs to the first quarter of 2015 valuation of profit sharing fair value, as compared to the 2014 valuation of the profit sharing fair value can be summarized as follows:

- Volume Inputs: the Company reduced our projected sales volume in 2015 by 3% versus the forecast used in 2014.

- Steel Sales Price Inputs: the Company reduced our projected selling price in 2015 by 12% versus the forecast used in 2014 and reduced our projected selling price in 2016 by 7% versus the forecast used in 2014.

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 borrowings rate used to discount the liability to a present value by 1.0% and other factors remained unchanged, our profit sharing liability as of March 31, 2015 would have been $66.2 million and we would increase the loss from the change in the fair value of the profit sharing liability by $8.7 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 March 31, 2015 would have been $53.1 million and we would increase the gain from the change in the fair value of the profit sharing liability by $4.4 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 March 31, 2015:

(in thousands)	Carrying Value as of March 31, 2015		Fair Value Measurements at March 31, 2015 Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Profit sharing liability	$	57,538	$	-	$	-	$	57,538
Total	$	57,538	$	-	$	-	$	57,538

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, 2014:

(in thousands)	Carrying Value as of December 31, 2014		Fair Value Measurements at December 31, 2014 Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Profit sharing liability	$	70,422	$	-	$	-	$	70,422
Total	$	70,422	$	-	$	-	$	70,422

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 three months ended March 31, 2015 and for the year ended December 31, 2014:

	March 31,		December 31,
	2015		2014
	(in thousands)		(in thousands)
Beginning balance	$	70,422	$	162,295
Change in fair value of profit sharing liability:
Change in preset value of estimate of future operating profits		(16,569)		(110,589)
Change in discount rate		2,454		8,106
Interest expense - present value discount amortization		1,220		11,544
Difference between the previously estimated operating results for the current period and actual results		-		(79)
Exchange rate effect		11		(855)
Ending balance	$	57,538	$	70,422

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 request for payment to the customer’s bank earlier than the scheduled payment date, but will incur an interest charge and a processing fee.

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

Interest expenses for early submission request of payment amounted to $8.0 million and $14.1 million for the three months ended March 31, 2015 and 2014, respectively.

(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 betterment to buildings and equipment are capitalized. Interest incurred during construction is capitalized into construction in progress. All other interest is expensed as incurred.

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

Due to the recurring losses in the Longmen Joint Venture’s operations, the Company has considered it is a triggering event that Longmen Joint Venture’s carrying amount may not be recoverable, to determine whether its carrying value has become impaired. The Company uses the undiscounted cash flow estimation approach for the purpose of performing a recoverability test which includes future cash inflows less associated cash outflows that are directly associated with and that are expected to arise as a direct result of the use and eventual disposition of the assets. For purposes of assessment, the long lived assets were grouped at the lowest level for which there is identifiable cash flows. The major groupings analyzed include Longmen Joint Venture, Maoming Hengda and General Steel (China). Further, our estimate of future cash flows includes estimated future cash flows necessary to maintain our existing production potential over the entire period and within the various groups. The projections are based on a best estimate approach as opposed to a probability weighted approach based on the likelihood of possible outcomes. When the Company identifies an impairment, the Company reduces the carrying amount of the asset to its estimated fair value based on a discounted cash flows method. As of March 31, 2015, the Company expects its long-lived assets to be fully recoverable (see Note 2(f.)). 

(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 March 31, 2015, the Company expects these assets to be fully recoverable.

Land use rights

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

Long Steel Group contributed land use rights for a total amount of $24.2 million (RMB 148.3 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 on
	(in thousands)
General Steel (China)	$	3,870		2050 & 2053
Longmen Joint Venture	$	24,187		2048 & 2052
Maoming Hengda	$	2,706		2054

Mining right

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

(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 March 31, 2015 and December 31, 2014.

Unconsolidated entities	Year acquired		March 31, 2015 Net investment (In thousands)		Owned %		December 31, 2014 Net investment (In thousands)		Owned %
Xi’an Delong Powder Engineering Materials Co., Ltd.		2007	$	1,014		24.1	$	1,153		24.1

The table below summarizes General Steel (China)’s investment holding (see Note 2(a) - Basis of presentation) as of March 31, 2015 and December 31, 2014.

Unconsolidated entities	Year acquired		March 31, 2015 Net investment (In thousands)		Owned %		December 31, 2014 Net investment (In thousands)		Owned %
Tianwu General Steel Material Trading Co., Ltd.		2010	$	15,691		32.0	$	15,670		32.0

Total investment income (loss) in unconsolidated subsidiaries amounted to $(0.04) million and $0.01 million for the three months ended March 31, 2015 and 2014, respectively, which was included in “Income from equity investments” in the condensed consolidated statements of operations and comprehensive loss.

(m) Revenue recognition

Sales is 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 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 obligators, 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. Sales in trading transactions, which were netted against corresponding cost of goods sold, amounted to $107.7 million and $38.2 million for the three months ended March 31, 2015 and 2014, respectively. The net amount in gross loss amounted to $64,994 and $288,513 during the respective periods. 

(n) Recently issued accounting pronouncements

In February 2015, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015-02, Amendments to the Consolidation Analysis. Under both current GAAP requirements and the amendments in this update, a decision maker is determined to be the primary beneficiary of a VIE if it satisfies both the power and the economics criteria. The primary beneficiary consolidates a VIE because it has a controlling financial interest. Under the requirements in current GAAP, if a fee arrangement paid to a decision maker, such as an asset management fee, is determined to be a variable interest in a VIE, the decision maker must include the fee arrangement in its primary beneficiary determination and could consolidate the VIE on the basis of power (decision-making authority) and economics (the fee arrangement). However, the amendments in this Update specify that some fees paid to a decision maker are excluded from the evaluation of the economics criterion if the fees are both customary and commensurate with the level of effort required for the services provided. Those amendments make it less likely for a decision maker to meet the economics criterion solely on the basis of a fee arrangement. The amendments in this update are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. Management is evaluating the impact that will arise from these Amendments.

In April 2015, the FASB issued authoritative guidance on accounting for Interest-Imputation of Interest (Subtopic 835-30); Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). This update requires that debt issuance cost related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts, without changing existing recognition and measurement guidance for debt issuance costs. The new guidance is required to be applied on a retrospective basis and to be accounted for as a change in an accounting principle. The amendments in this update are effective for financial statements issued for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years and early adoption of the amendments in this update is permitted. The Company will apply early adoption of this standard in the second quarter of 2015. The implementation of this standard will result in the reclassification of certain debt issuance costs from deferred financing cost to a reduction in the carrying amount of the related debt liability within the Company’s consolidated balance sheets.

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CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $)	Mar. 31, 2015	Dec. 31, 2014
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	64,458,588	64,458,588
Common stock, shares, outstanding	61,986,282	61,986,282
Treasury stock, shares	2,472,306	2,472,306

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Deposits due to sales representatives

3 Months Ended

Mar. 31, 2015

Deposits Due To Sales Representatives [Abstract]

Deposits Due To Sales Representatives [Text Block]

Note 12 – 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 $21.9 million and $20.4 million in deposits due to sales representatives, including deposits due to related parties, as of March 31, 2015 and December 31, 2014, respectively.

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Related party transactions and balances (Details 8) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015		Dec. 31, 2014
Related Party Transaction [Line Items]
Short term loans - related parties	$ 217,397		$ 46,380
Shaanxi Steel Group Hanzhong Steel Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Subsidiary of Shaanxi Steel
Short term loans - related parties	8,155		0
Shaanxi Steel [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Majority shareholder of Long Steel Group
Short term loans - related parties	91,173		0
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	68,754		34,460
Long Steel Group [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture
Short term loans - related parties	30,533		0
Tianjin Hengying Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Partially owned by CEO through indirect shareholding	[1]
Short term loans - related parties	7,610		3,039
Tianjin General Qiugang Pipe Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Partially owned by CEO through indirect shareholding	[2],[3]
Short term loans - related parties	3,262		0
Tianjin Dazhan Industry Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Partially owned by CEO through indirect shareholding	[1]
Short term loans - related parties	7,240		8,211
Yangpu Capital Automobile [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Partially owned by CEO through indirect shareholding
Short term loans - related parties	$ 670		$ 670

[1] The Company reclassified advances for inventory purchase - related parties related to trading transactions, as noted in note 2(g), to loans receivable - related parties due to their interest-bearing nature.

[2] During the three months ended March 31, 2015, the Company entered into a purchase agreement with this entity to purchase steel related products to resell to Tianwu General Steel Material Trading Co., Ltd. (see Note 19 (h) Customer deposit – related parties). The term of the agreement is expected to be fulfilled within three months after deposits were made. The purchase advances are refundable. For the three months ended March 31, 2015, the Company made $61.9 million of purchase advances of which $3.3 million were utilized. The entity also acts as a customer in the Company’s trading transactions. During the three months ended March 31, 2015, the Company sold approximately $16.0 million to this entity. For the three months ended March 31, 2014, the Company made $29.5 million of purchase advances of which $4.3 million was utilized. The entity also acts as a customer in the Company’s trading transactions. During the three months ended March 31, 2014, the Company sold $1.4 million to this entity.

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

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Taxes (Details 2) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Taxes [Line Items]
VAT taxes payable	$ 6,847	$ 3,147
Income taxes payable	209	243
Misc. taxes	2,337	1,811
Totals	$ 9,393	$ 5,201

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Taxes (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Taxes [Line Items]
Current	$ 30	$ 5
Deferred	0	0
Total provision for income taxes	$ 30	$ 5

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Document And Entity Information	3 Months Ended
	Mar. 31, 2015	May 14, 2015
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		62,486,282
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2015
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2015

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Supplemental disclosure of cash flow information

3 Months Ended

Mar. 31, 2015

Supplemental Cash Flow Elements [Abstract]

Cash Flow Supplemental Disclosures [Text Block]

Note 13 - Supplemental disclosure of cash flow information

Interest paid, net of capitalized, amounted to $2.6 million and $5.7 million for the three months ended March 31, 2015 and 2014, respectively.

The Company paid income tax amounted to $0.1 million and $0.01 million for the three months ended March 31, 2015 and 2014, respectively.

During the three months ended March 31, 2015 and 2014, the Company converted $0.03 million and $0.05 million of equipment into inventory productions, respectively.

During the three months ended March 31, 2015 and 2014, the Company used $0.9 million $1.0 million inventory, respectively, in plant and equipment constructions.

During the three months ended March 31, 2015 and 2014, the Company incurred $2.8 million and $23.4 million accounts payable, respectively, to be paid for the purchase of equipment and construction in progress.

The Company had $23.8 million notes receivable from financing sales loans to be converted to cash as of March 31, 2015.

The Company reclassified $5.9 million purchase deposits - related parties that carried interest to loan receivable - related parties as of March 31, 2015.

The Company had $47.7 million notes receivable from financing sales loans to be converted to cash as of March 31, 2014.

During the three months ended March 31, 2014, the Company had receivables of $0.01 million as a result of the disposal of equipment that has not been collected.

During the three months ended March 31, 2014, one of the Company’s unconsolidated entities declared dividend and the Company was entitled for the dividend amounted to $0.2 million, which was not yet collected.

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Debt (Details 2) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Short term loans - others	$ 51,995	$ 60,717
Longmen Joint Venture Loans from various unrelated companies and individuals [Member]
Debt Instrument [Line Items]
Short term loans - others	37,337	16,999
Longmen Joint Venture Loans from financing sales [Member]
Debt Instrument [Line Items]
Short term loans - others	8,458	37,525
Maoming Hengda Loans from one unrelated parties and one related party [Member]
Debt Instrument [Line Items]
Short term loans - others	$ 6,200	$ 6,193

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Other income (expense) (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Capital Leases, Income Statement, Lease Revenue, Total	$ 0.5	$ 0.5

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
SALES	$ 270,769	$ 512,005
SALES - RELATED PARTIES	57,395	82,206
TOTAL SALES	328,164	594,211
COST OF GOODS SOLD	297,565	530,744
COST OF GOODS SOLD - RELATED PARTIES	62,746	86,028
TOTAL COST OF GOODS SOLD	360,311	616,772
GROSS LOSS	(32,147)	(22,561)
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	(17,355)	(21,053)
UNALLOCATED OVERHEADS EXPENSES	(19,134)	0
CHANGE IN FAIR VALUE OF PROFIT SHARING LIABILITY	12,924	(49)
LOSS FROM OPERATIONS	(55,712)	(43,663)
OTHER INCOME (EXPENSE)
Interest income	2,331	3,192
Finance/interest expense	(20,570)	(28,695)
Gain on disposal of equipment and intangible assets	16	46
(Loss) income from equity investments	(37)	13
Foreign currency transaction loss	(873)	(854)
Lease income	543	546
Other non-operating income (expense), net	223	(176)
Other expense, net	(18,367)	(25,928)
LOSS BEFORE PROVISION FOR INCOME TAXES AND NONCONTROLLING INTEREST	(74,079)	(69,591)
PROVISION FOR INCOME TAXES	30	5
NET LOSS	(74,109)	(69,596)
Less: Net loss attributable to noncontrolling interest	(28,956)	(26,032)
NET LOSS ATTRIBUTABLE TO GENERAL STEEL HOLDINGS, INC.	(45,153)	(43,564)
NET LOSS	(74,109)	(69,596)
OTHER COMPREHENSIVE LOSS
Foreign currency translation adjustments	(853)	4,670
COMPREHENSIVE LOSS	(74,962)	(64,926)
Less: Comprehensive loss attributable to noncontrolling interest	(29,328)	(24,226)
COMPREHENSIVE LOSS ATTRIBUTABLE TO GENERAL STEEL HOLDINGS, INC.	$ (45,634)	$ (40,700)
WEIGHTED AVERAGE NUMBER OF SHARES
Basic and Diluted (in shares)	61,986	55,813
LOSS PER SHARE
Basic and Diluted (in dollars per share)	$ (0.73)	$ (0.78)

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Advances on inventory purchases

3 Months Ended

Mar. 31, 2015

Inventory Disclosure [Abstract]

Advances On Inventory Purchase [Text Block]

Note 7 – Advances on inventory purchases

Advances on inventory purchases, including related party, net of allowance for doubtful accounts consists of the following:  

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Advances on inventory purchases	$	51,944	$	76,320
Less: allowance for doubtful accounts		(2,504)		(2,501)
Advances on inventory purchases – related parties		95,757		45,617
Net advances on inventory purchases	$	145,197	$	119,436

Movement of allowance for doubtful accounts, including related parties, is as follows:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Beginning balance	$	2,501	$	105
Charge to expense		-		2,395
Exchange rate effect		3		1
Ending balance	$	2,504	$	2,501

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Inventories

3 Months Ended

Mar. 31, 2015

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

Note 6 – Inventories

Inventories consist of the following:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Supplies	$	17,327	$	18,838
Raw materials		100,509		143,563
Finished goods		43,086		12,301
Less: allowance for inventory valuation		(12,627)		(18,375)
Total inventories	$	148,295	$	156,327

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 March 31, 2015 and December 31, 2014, the Company had provided allowance for inventory valuation in the amounts of $12.6 million and $18.4 million, respectively.

Movement of allowance for inventory valuation is as follows:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Beginning balance	$	18, 375	$	15,397
Addition		12,581		18,362
Less: write-off		(18,329)		(15,311)
Exchange rate effect		-		(73)
Ending balance	$	12,627	$	18,375

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Taxes

3 Months Ended

Mar. 31, 2015

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 18 – Taxes

Income tax

Significant components of the provision for income taxes on earnings and deferred taxes on net operating losses from operations for the three months ended March 31, 2015 and 2014 are as follows: 

(In thousands)	The three months ended March 31, 2015		The three months ended March 31, 2014
Current	$	30	$	5
Deferred		-		-
Total provision for income taxes	$	30	$	5

Under the Income Tax Laws of the PRC, General Steel (China) and Maoming Hengda (located in Guangdong province) are subject to income tax at a rate of 25%.

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

Deferred taxes assets – China

According to Chinese tax regulations, net operating losses can be carried forward to offset operating income for the next five years. The Group’s losses carried forward of $665.9 million will begin to expire in 2016. The Chinese government recently announced several policies to curb the real estate price increases across the country which led to a slowdown in demand for construction steel products. Additionally due to the continued global economic slowdown and the overcapacity issues in China's steel market, management expected there would be a sustained increase in margin pressure in the next five years until all the existing but outdated steel capacity across the whole industry are eliminated. Management took into consideration this potential negative impact on average selling price and gross margin of its products, re-performed an operating forecast for the next five years and concluded that the beginning-of-the-year balance of deferred tax assets mainly relating to the net operating loss carry forward may not be fully realizable due to the reduction in the projection of income to be available in the next 5 years. Management therefore decided to provide 100% valuation allowance for the deferred tax assets. The valuation allowance as of March 31, 2015 and December 31, 2014 was $123.7 million and $114.8 million, respectively. Management will review this valuation allowance periodically and make adjustments as warranted. Temporary differences represent tax and book differences in various items, such as receivable allowances, inventory allowances, impairments on fixed assets and deferred lease income.

Movement of valuation allowance:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Beginning balance	$	114,820	$	97,569
Current period addition		10,040		18,951
Current period reversal		(1,317)		(614)
Deconsolidation of Baotou Steel		-		(625)
Exchange difference		173		(461)
Ending balance	$	123,716	$	114,820

Deferred taxes assets – U.S.

General Steel Holdings, Inc. was incorporated in the United States and has incurred net operating losses for income tax purposes for the three months ended March 31, 2015. The net operating loss carry forwards for United States income taxes amounted to $3.2 million, which may be available to reduce future years’ taxable income. These carry forwards will expire, if not utilized, starting from 2027 through 2034. 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 March 31, 2015 was $1.1 million. The net change in the valuation allowance for the three months ended March 31, 2015 was $0. 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 March 31, 2015. 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 March 31, 2015 and December 31, 2014, the Company had $2.0 million and $3.2 million in value added tax credit which are available to offset future VAT payables, respectively.

Sales and purchases are recorded net of VAT collected and paid as the Company acts as an agent for the government for VAT collection. VAT on sales and VAT on purchases amounted to $139.1 million and $132.2 million, respectively, for the three months ended March 31, 2015 and $152.9 million and $151.9 million, respectively, for the three months ended March 31, 2014. 

Taxes payable consisted of the following: 

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
VAT taxes payable	$	6,847	$	3,147
Income taxes payable		209		243
Misc. taxes		2,337		1,811
Totals	$	9,393	$	5,201

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Deferred lease income

3 Months Ended

Mar. 31, 2015

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, 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 $29.9 million (RMB 183.1 million) for the reduced production efficiency caused by the construction. In addition, in 2010 and 2011, Shaanxi Steel reimbursed Longmen Joint Venture $14.6 million (RMB 89.5 million) and $14.6 million (RMB 89.3 million), respectively, for trial production costs related to the new equipment.

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

The deferred lease income is amortized to income over the remaining term of the 40-year land sub-lease. For the three months ended March 31, 2015 and 2014, the Company recognized $0.5 million and $0.5 million, respectively. As of March 31, 2015 and December 31, 2014, the balance of deferred lease income amounted to $74.4 million and $74.9 million, respectively, of which $2.2 million and $2.2 million represents balance to be amortized within one year. See Note 19 – Related party transactions and balances (k) – Deferred lease income for details.

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Customer deposits (Details Textual) (USD $) In Millions, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Customer Deposits [Line Items]
Customer Deposits Including Related Parties	$ 287.3	$ 225.6
Related Party [Member]
Customer Deposits [Line Items]
Customer Deposits Including Related Parties	$ 148.2	$ 132.6

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Debt

3 Months Ended

Mar. 31, 2015

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

Note 10 – 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 $222.2 million and $339.4 million as of March 31, 2015 and December 31, 2014, respectively. Restricted notes receivable as a guarantee for the notes payable amounted to $1.6 million and $0 as of March 31, 2015 and December 31, 2014, respectively.

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

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
General Steel (China): Notes payable to various banks in China, due June 2015. Restricted cash required of $8.2 million and $14.7 million as of March 31, 2015 and December 31, 2014, respectively; guaranteed by third parties. These notes payable were either repaid or renewed subsequently on the due dates.	$	16,310	$	22,806
Longmen Joint Venture: Notes payable to various banks in China, due various dates from May to October 2015. $214.0 million restricted cash and $1.6 million notes receivable are secured for notes payable as of March 31, 2015, and comparatively $324.7 million restricted cash and $0 notes receivable are secured for notes payable as of December 31, 2014, respectively; some notes are further guaranteed by third parties. These notes payable were either repaid or renewed subsequently on the due dates.		432,052		638,829
Total short-term notes payable	$	448,362	$	661,635

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

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
General Steel (China): Loans from various banks in China, due various dates from June 2015 to January 2016. Weighted average interest rate was 7.3% per annum and 7.2% per annum as of March 31, 2015 and December 31, 2014, respectively; some are guaranteed by third parties. These loans were either repaid or renewed subsequently on the due dates.	$	40,612	$	40,562
Longmen Joint Venture: Loans from various banks in China, due various dates from May to November 2015. Weighted average interest rate was 7.8% per annum and 7.1% per annum as of March 31, 2015 and December 31, 2014, respectively; some are guaranteed by third parties, $27.3 million restricted cash and $66.2 notes receivable and comparatively $16.3 million restricted cash and $111.8 notes receivable were secured for the loans as of March 31, 2015 and December 31, 2014, respectively; These loans were either repaid or renewed subsequently on the due dates.		191,536		216,940
Total short-term loans - bank	$	232,148	$	257,502

As of March 31, 2015 and December 31, 2014, the Company had not met its financial covenants stipulated by certain loan agreements related to the Company’s debt to asset ratio. Two of General Steel (China)’s bank loans contained financial covenants stipulating debt to asset ratios below 70%. At March 31, 2015, General Steel (China)’s debt to asset ratio was 94.0%. At December 31, 2014, General Steel (China)’s debt to asset ratio was 90.8%.

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 March 31, 2015 and December 31, 2014 was $4.7 million and $4.7 million, respectively. According to the Company’s short term loan agreements, the banks have the rights to request for more collateral or additional guarantees if the breach of covenant is not remedied or request early repayment of the loan if the Company does not cure such breach within a certain period of time. As of the date of this report, the Company has not received any notice from the banks to request more collateral, additional guarantees or early repayment of the short term loans due to the breach of covenant.

Due to unrelated parties

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Longmen Joint Venture: Loans from various unrelated companies and individuals, due various dates from May to September 2015, and weighted average interest rate was 10.2% per annum and 5.7% per annum as of March 31, 2015 and December 31, 2014, respectively. These loans were either repaid or renewed subsequently on the due dates.	$	37,337	$	16,999
Longmen Joint Venture: Loans from financing sales.		8,458		37,525
Maoming Hengda: Loans from one unrelated parties and one related party, due on demand, none interest bearing.		6,200		6,193
Total short-term loans – others	$	51,995	$	60,717

The Company had various loans from unrelated companies amounting to $52.0 million and $60.7 million as of March 31, 2015 and December 31, 2014, respectively. Of the $52.0 million, $6.2 million loans carry no interest, $8.5 million of financing sales are subject to interest rates ranging between 4.6% and 12.0%, and the remaining $37.3 million are subject to interest rates ranging from 5.0% to 24.0%. All short term loans from unrelated companies are payable on demand and unsecured.

As part of its working capital management, Longmen Joint Venture has entered into a number of sale and purchase back contracts ("contracts") with third party companies and Yuxin and Yuteng. According to the contracts, Longmen Joint Venture sells rebar to the third party companies at a certain price, and within the same month, Yuxin and Yuteng will purchase back the rebar from the third party companies at a price of 4.6% to 12.0% 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 12.0% 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 March 31, 2015 and 2014 amounted to $118.4 million and $230.5 million, respectively, which are eliminated in the Company’s consolidated financial statements. The financial cost related to financing sales for the three months ended March 31, 2015 and 2014 amounted to $0.7 million and $0.9 million, respectively.

Short term loans due to related parties

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
General Steel China: Loans from Yangpu Capital Automobile, due on demand, and interest rates is 10% per annum.	$	670	$	670
General Steel China: Loans from Tianjin Dazhan Industry Co., Ltd, due on demand, and interest rates is 10% per annum.		7,174		-
Longmen Joint Venture: Loan from Shaanxi Coal and Chemical Industry Group Co., Ltd., due on demand, and interest rate is 7.0% per annum.		128		128
Longmen Joint Venture: Loan from Shaanxi Steel Group due on December 2015, and interest rate is 6.9% and 8.0% per annum. The Company repaid $9,489 subsequent to March 31, 2015.		91,173		-
Longmen Joint Venture: Loan from Shaanxi Steel Group Hanzhong Steel Co., Ltd. due on April 2015, and interest rate is 8.0% per annum. Full balance becomes due on demand in April 2015.		8,155		-
Longmen Joint Venture: Loan from Long Steel Group due on April 2015, and interest rate is 12.0% per annum. The Company repaid $4,924 subsequent to March 31, 2015. Remaining balance becomes due on demand.		8,155		-
Longmen Joint Venture: Loan from Tianjin General Qiugang Pipe Co., Ltd due on September 2015, and interest rate is 5.4% per annum.		3,262		-
Longmen Joint Venture: Loans from financing sales.		98,680		45,582
Total short-term loans - related parties	$	217,397	$	46,380

Long-term loans due to related party

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Longmen Joint Venture: Loans from Shaanxi Steel Group, due on various dates through March 2018 and interest rate are 5.6% - 8.0% per annum.	$	352,850	$	339,549

As of March 31, 2015 and December 31, 2014, total assets used by the Company as collateral for the aforementioned debts were $110.1 million and $96.9 million, respectively.

Total interest expense, net of capitalized interest, amounted to $7.4 million and $9.5 million for the three months ended March 31, 2015 and 2014, respectively.

Capitalized interest amounted to $0 and $0.6 million for the three months ended March 31, 2015 and 2014, respectively.

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Loans receivable (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015		Dec. 31, 2014
Related Party Transaction [Line Items]
Loans receivable - related parties	$ 6,728		$ 34,713
Long Steel Group [Member]
Related Party Transaction [Line Items]
Loans receivable - related parties	42,569		36,001
Tianjin Hengying Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Loans receivable - related parties	622	[1]	13,997	[1]
Tianjin Dazhan Industry Co Ltd [Member]
Related Party Transaction [Line Items]
Loans receivable - related parties	0	[1]	14,617	[1]
Beijing Shenghua Xinyuan Metal Materials Co Ltd [Member]
Related Party Transaction [Line Items]
Loans receivable - related parties	$ 6,106		$ 6,099

[1] The Company reclassified advances for inventory purchase - related parties related to trading transactions, as noted in note 2(g), to loans receivable - related parties due to their interest-bearing nature.

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Retirement plan (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Defined Contribution Plan Employer Matching Contribution Percent Criteria One	20.00%
Defined Contribution Plan Employer Matching Contribution Percent Criteria Two	12.00%
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent	8.00%
Pension Expense	$ 2.8	$ 2.8

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Plant and equipment, net

3 Months Ended

Mar. 31, 2015

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

Note 8 – Plant and equipment, net

Plant and equipment consist of the following:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Buildings and improvements	$	437,477	$	279,776
Machinery		887,292		669,427
Machinery under capital lease		627,505		626,735
Transportation and other equipment		23,101		22,765
Construction in progress		9,835		342,660
Subtotal		1,985,210		1,941,363
Less: accumulated depreciation		(423,699)		(398,227)
Total	$	1,561,511	$	1,543,136

Construction in progress consisted of the following as of March 31, 2015:

Construction in progress	Value		Completion	Estimated additional cost to complete
description	(In thousands)		date	(In thousands)
Restructuring of ventilation system		2	December 2015		979
Energy management system		326	April 2015		1,925
Reconstruction of miscellaneous factory buildings		6,959	December 2015		7,023
Project materials		2,145			-
Others		403			-
Total	$	9,835		$	9,927

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, 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:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Machinery	$	627,505	$	626,735
Less: accumulated depreciation		(116,075)		(107,782)
Carrying value of leased assets	$	511,430	$	518,953

The Company assessed the recoverability of all of its remaining long lived assets at March 31, 2015 and December 31, 2014, respectively, and such assessment did not result in any impairment charges.

Depreciation expense for the three months ended March 31, 2015 and 2014 amounted to $24.9 million and $24.1 million, respectively. These amounts include depreciation of assets held under capital leases for the three months ended March 31, 2015 and 2014, which amounted to $8.1 million and $7.9 million, respectively (See Notes 2(j.) and 2(f.)).

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Intangible assets, net

3 Months Ended

Mar. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets Disclosure [Text Block]

Note 9 – Intangible assets, net

Intangible assets consist of the following:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Land use rights	$	30,763	$	30,726
Mining right		2,450		2,447
Software		1,059		1,058
Subtotal		34,272		34,231
Less:
Accumulated amortization – land use rights		(9,308)		(9,127)
Accumulated amortization – mining right		(1,339)		(1,431)
Accumulated amortization – software		(740)		(713)
Subtotal		(11,387)		(11,271)
Intangible assets, net	$	22,885	$	22,960

The gross amount of the intangible assets amounted to $34.3 million and $34.2 million as of March 31, 2015 and December 31, 2014, respectively. The remaining weighted average amortization period is 32.5 years as of March 31, 2015.

Total amortization expense for the three months ended March 31, 2015 and 2014 amounted to $0.2 million and $0.2 million, respectively.

Total depletion expense for the three months ended March 31, 2015 and 2014 amounted to $0.04 million and $0.01 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)
March 31, 2016	$	946	21,939
March 31, 2017		946	20,993
March 31, 2018		946	20,047
March 31, 2019		946	19,101
March 31, 2020		946	18,155
Thereafter		18,155	-
Total	$	22,885

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Customer deposits

3 Months Ended

Mar. 31, 2015

Deposits [Abstract]

Customer Deposits Disclosure [Text Block]

Note 11 – 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 March 31, 2015 and December 31 2014, customer deposits amounted to $287.3 million and $225.6 million, respectively, including deposits received from related parties, which amounted to $148.2 million and $132.6 million, respectively.

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Other receivables (including related parties), net (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Other receivables	$ 114,761	$ 73,944
Less: allowance for doubtful accounts	(11,470)	(10,198)
Other receivables - related parties	23,143	39,734
Less: allowance for doubtful accounts - related parties	(64)	(64)
Net other receivables	$ 126,370	$ 103,416

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Deposits due to sales representatives (Details Textual) (USD $) In Millions, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Deposits Due To Sales Representative Including Related Parties	$ 21.9	$ 20.4

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Inventories (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Inventory [Line Items]
Supplies	$ 17,327	$ 18,838
Raw materials	100,509	143,563
Finished goods	43,086	12,301
Less: allowance for inventory valuation	(12,627)	(18,375)	(15,397)
Total inventories	$ 148,295	$ 156,327

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Related party transactions and balances (Details 7) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015		Dec. 31, 2014
Related Party Transaction [Line Items]
Accounts payable - related parties	$ 226,964		$ 207,783
Hancheng Haiyan Coking Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Long Steel Group
Accounts payable - related parties	77,617		64,276
Long Steel Group [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture
Accounts payable - related parties	94,006		79,886
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	14,828		23,726
Tianjin Dazhan Industry Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Partially owned by CEO through indirect shareholding	[1]
Accounts payable - related parties	870		869
Xi'an Pinghe Metallurgical Raw Material Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Long Steel Group
Accounts payable - related parties	10,829		11,035
Tianjin Hengying Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Partially owned by CEO through indirect shareholding	[1]
Accounts payable - related parties	0		1
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	1,002		746
Beijing Daishang Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture’s subsidiary
Accounts payable - related parties	28		36
Tianjin General Qiugang Pipe Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Partially owned by CEO through indirect shareholding	[2],[3]
Accounts payable - related parties	0		2,462
Tianwu General Steel Material Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Investee of General Steel (China)	[4]
Accounts payable - related parties	7,986		22,916
Maoming Shengze Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Partially owned by CEO through indirect shareholding
Accounts payable - related parties	4,274		1,773
Shaanxi Steel [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Majority shareholder of Long Steel Group
Accounts payable - related parties	683		0
Shaanxi Shenganda Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Significant influence by Long Steel Group
Accounts payable - related parties	14,834		0
Others [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Entities either owned or have significant influence by our affiliates or management
Accounts payable - related parties	$ 7		$ 57

[1] The Company reclassified advances for inventory purchase - related parties related to trading transactions, as noted in note 2(g), to loans receivable - related parties due to their interest-bearing nature.

[2] During the three months ended March 31, 2015, the Company entered into a purchase agreement with this entity to purchase steel related products to resell to Tianwu General Steel Material Trading Co., Ltd. (see Note 19 (h) Customer deposit – related parties). The term of the agreement is expected to be fulfilled within three months after deposits were made. The purchase advances are refundable. For the three months ended March 31, 2015, the Company made $61.9 million of purchase advances of which $3.3 million were utilized. The entity also acts as a customer in the Company’s trading transactions. During the three months ended March 31, 2015, the Company sold approximately $16.0 million to this entity. For the three months ended March 31, 2014, the Company made $29.5 million of purchase advances of which $4.3 million was utilized. The entity also acts as a customer in the Company’s trading transactions. During the three months ended March 31, 2014, the Company sold $1.4 million to this entity.

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

[4] This entity is one of the Company’s trading partners and sells or purchases the steel related products to or from the Company. During three months ended March 31, 2015 and 2014, the Company received $6.7 million and $71.8 million of deposits from this entity, of which, no trading sales transactions were utilized. During the year ended December, 31 2014 and the first quarter of 2015, the Company received a total deposits of RMB 600 million (approximately $104.0 million) from this entity. The deposits are refundable.

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Accounts receivable (including related parties), net (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Ending balance	$ 508	$ 483
Accounts Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning balance	609	1,053
Charge to expense	25	368
Less: recovery	0	(8)
Deconsolidation of Baotou Steel	0	(798)
Exchange rate effect	0	(6)
Ending balance	$ 634	$ 609

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Taxes (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Taxes [Line Items]
Beginning balance	$ 114,820	$ 97,569
Current period addition	10,040	18,951
Current period reversal	(1,317)	(614)
Deconsolidation of Baotou Steel	0	(625)
Exchange difference	173	(461)
Ending balance	$ 123,716	$ 114,820

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Other receivables (including related parties), net (Tables)

3 Months Ended

Mar. 31, 2015

Other Receivables [Abstract]

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

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

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Other receivables	$	114,761	$	73,944
Less: allowance for doubtful accounts		(11,470)		(10,198)
Other receivables – related parties		23,143		39,734
Less: allowance for doubtful accounts – related parties		(64)		(64)
Net other receivables	$	126,370	$	103,416

Schedule of Credit Losses Related to Financing Receivables, Current and Noncurrent [Table Text Block]

Movement of allowance for doubtful accounts, including related parties, is as follows:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Beginning balance	$	10,262	$	2,606
Charge to expense		1,260		7,670
Less: recovery		(5)		(6)
Exchange rate effect		17		(8)
Ending balance	$	11,534	$	10,262

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Summary of significant accounting policies (Details 5) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Summary Of Significant Accounting Policies [Line Items]
Financing Amount	$ 142.0
Company C [Member]
Summary Of Significant Accounting Policies [Line Items]
Financing Amount	16.2
Vendor Financing [Member]
Summary Of Significant Accounting Policies [Line Items]
Financing Amount	897.1
Vendor Financing [Member] | Company A [Member]
Summary Of Significant Accounting Policies [Line Items]
Financing Amount	244.7
Financing period covered	July 30, 2014 – July 30, 2019
Vendor Financing [Member] | Company B [Member]
Summary Of Significant Accounting Policies [Line Items]
Financing Amount	163.1
Financing period covered	January 22, 2014 – January 22, 2017
Vendor Financing [Member] | Company C [Member]
Summary Of Significant Accounting Policies [Line Items]
Financing Amount	$ 489.3
Financing period covered	October 1, 2013 – March 31, 2016

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Profit sharing liability

3 Months Ended

Mar. 31, 2015

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 (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Commitment And Contingencies [Line Items]
Operating Leases, Rent Expense	$ 0.1	$ 0.9
Contractual Obligation	55.4
Subsequent Event [Member]
Commitment And Contingencies [Line Items]
Contractual Obligation	$ 9.9

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Statutory reserves

3 Months Ended

Mar. 31, 2015

Statutory Reserves [Abstract]

Statutory Reserves [Text Block]

Note 21 – Statutory reserves

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

Surplus reserve fund

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

The transfer to this reserve must be made before distribution of any dividend to shareholders. The surplus reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any, and may be utilized for business expansion or converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of the shares currently held by them, provided that the remaining reserve balance after such issue is not less than 25% of the registered capital. For the three months ended March 31, 2015 and 2014, the Company did not make any contributions to these reserves.

Special reserve

The Company is required by the PRC government to reserve safety and maintenance expense to the cost of production based on the actual quantity of mineral exploited.  The amount of reserves is determined within the unit price range provided by Ministry of Finance of PRC. For the three months ended March 31, 2015 and 2014, the Company made contributions of $0.2 million and $0.3 million to these reserves, respectively and used $0.04 million and $0.1 million of safety and maintenance expense, respectively.

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Related party transactions and balances (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Related Party Transaction [Line Items]
Machinery	$ 627,505	$ 626,735
Shaanxi Coal and Shaanxi Steel [Member]
Related Party Transaction [Line Items]
Machinery	603,618	602,878
Less: accumulated depreciation	(112,298)	(105,001)
Carrying value of leased assets	$ 491,320	$ 497,877

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Summary of significant accounting policies (Details 3) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Summary Of Significant Accounting Policies [Line Items]
Sales	$ 270,769,000	$ 512,005,000
Gross loss	(32,147,000)	(22,561,000)
Loss from operations	(55,712,000)	(43,663,000)
Net loss attributable to controlling interest	(45,153,000)	(43,564,000)
Variable Interest Entities and Subsidiary [Member]
Summary Of Significant Accounting Policies [Line Items]
Sales	328,158,000	594,014,000
Gross loss	(32,147,000)	(22,219,000)
Loss from operations	(53,498,000)	(39,294,000)
Net loss attributable to controlling interest	$ (42,405,000)	$ (38,034,000)

XML

Related party transactions and balances (Details 10) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015		Dec. 31, 2014
Related Party Transaction [Line Items]
Customer deposits - related parties	$ 148,176		$ 132,616
Shaanxi Yuchang Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Significant influence by Long Steel Group
Customer deposits - related parties	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	7,414		4,467
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	5,391		6,844
Long Steel Group [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture
Customer deposits - related parties	28,863		23,517
Shaanxi Junlong Rolling Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Investee of Long Steel Group
Customer deposits - related parties	16		57
Shaanxi Shenganda Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Significant influence by Long Steel Group
Customer deposits - related parties	1,960		0
Tianwu General Steel Material Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Investee of General Steel (China)	[2]
Customer deposits - related parties	$ 104,522	[2]	$ 97,721	[2]

[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.

[2] This entity is one of the Company’s trading partners and sells or purchases the steel related products to or from the Company. During three months ended March 31, 2015 and 2014, the Company received $6.7 million and $71.8 million of deposits from this entity, of which, no trading sales transactions were utilized. During the year ended December, 31 2014 and the first quarter of 2015, the Company received a total deposits of RMB 600 million (approximately $104.0 million) from this entity. The deposits are refundable.

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Taxes (Tables)

3 Months Ended

Mar. 31, 2015

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

Significant components of the provision for income taxes on earnings and deferred taxes on net operating losses from operations for the three months ended March 31, 2015 and 2014 are as follows: 

(In thousands)	The three months ended March 31, 2015		The three months ended March 31, 2014
Current	$	30	$	5
Deferred		-		-
Total provision for income taxes	$	30	$	5

Summary of Valuation Allowance [Table Text Block]

Movement of valuation allowance:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Beginning balance	$	114,820	$	97,569
Current period addition		10,040		18,951
Current period reversal		(1,317)		(614)
Deconsolidation of Baotou Steel		-		(625)
Exchange difference		173		(461)
Ending balance	$	123,716	$	114,820

Schedule Of Taxes Payable [Table Text Block]

Taxes payable consisted of the following: 

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
VAT taxes payable	$	6,847	$	3,147
Income taxes payable		209		243
Misc. taxes		2,337		1,811
Totals	$	9,393	$	5,201

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Related party transactions and balances (Details 12) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Related Party Transaction [Line Items]
Long-term loans - related party	$ 352,850	$ 339,549
Shaanxi Steel [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Majority shareholder of Long Steel Group
Long-term loans - related party	$ 352,850	$ 339,549

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (74,109)	$ (69,596)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Depreciation, amortization and depletion	25,164	24,346
Change in fair value of profit sharing liability	(12,924)	49
Gain on disposal of equipment and intangible assets	(16)	(46)
Provision (recovery) of doubtful accounts	1,279	(251)
Reservation of mine maintenance fee	113	242
Stock issued for services and compensation	69	150
Amortization of deferred financing cost on capital lease	4,966	5,086
(Loss) income from equity investments	37	(13)
Foreign currency transaction loss	873	854
Deferred lease income	(543)	(546)
Changes in operating assets and liabilities
Notes receivable	32,504	(70,354)
Accounts receivable	(1,373)	(102)
Accounts receivable - related parties	(50,361)	(1,569)
Other receivables	(40,476)	355
Other receivables - related parties	16,577	(4,219)
Inventories	7,327	(730)
Advances on inventory purchases	24,380	176
Advances on inventory purchases - related parties	(55,767)	(38,419)
Prepaid expense and other	(468)	(516)
Long-term deferred expense	7	56
Prepaid taxes	(54)	4,963
Accounts payable	(7,706)	59,351
Accounts payable - related parties	18,856	16,986
Other payables and accrued liabilities	(3,625)	15,300
Other payables - related parties	8,960	(12,676)
Customer deposits	45,848	20,043
Customer deposits - related parties	15,341	113,895
Taxes payable	4,171	2,708
Net cash (used in) provided by operating activities	(40,950)	65,523
CASH FLOWS FROM INVESTING ACTIVITIES:
Restricted cash	105,911	(32,943)
Loans to unrelated parties	(6,500)	0
Repayments from related parties	33,791	0
Cash proceeds from short term investment	81	164
Payments for short term investment	(4,875)	0
Cash proceeds from sales of equipment and intangible assets	0	24
Equipment purchase and intangible assets	(31,589)	(56,861)
Net cash provided by (used in) investing activities	96,819	(89,616)
CASH FLOWS FINANCING ACTIVITIES:
Restricted notes receivable	30,934	131,971
Borrowings on short term notes payable	96,525	439,342
Payments on short term notes payable	(309,823)	(485,455)
Borrowings on short term loans - bank	61,023	95,120
Payments on short term loans - bank	(87,471)	(165,711)
Borrowings on short term loan - others	74,517	9,853
Payments on short term loans - others	(54,275)	(14,426)
Borrowings on short term loan - related parties	75,641	24,528
Payments on short term loans - related parties	(569)	(5,849)
Deposits due to sales representatives	1,462	(425)
Deposits due to sales representatives - related parties	41	0
Borrowings on long-term loans - related party	56,063	0
Payments on long-term loans - related party	(813)	0
Principal payment on capital lease obligation	(1,074)	0
Net cash (used in) provided by financing activities	(57,819)	28,948
EFFECTS OF EXCHANGE RATE CHANGE IN CASH	45	(444)
(DECREASE) INCREASE IN CASH	(1,905)	4,411
CASH, beginning of period	11,641	31,967
CASH, end of period	$ 9,736	$ 36,378

XML

Capital lease obligations (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015
Capital Lease Obligation Minimum Lease Payments, 2016	$ 10,665
Capital Lease Obligation Minimum Lease Payments, 2017	175,427
Capital Lease Obligation Minimum Lease Payments, 2018	33,657
Capital Lease Obligation Minimum Lease Payments,2019	30,685
Capital Lease Obligation Minimum Lease Payments,2020	29,621
Capital Lease Obligation Minimum Lease Payments, Thereafter	317,780
Capital Lease Obligation Minimum Lease Payments, Total minimum lease payments	597,835
Capital Lease Obligation Minimum Lease Payments, Ending balance	406,094
Capital Lease Obligation Minimum Lease Payments, Less: amounts representing interest	$ (191,741)

XML

Other receivables (including related parties), net

3 Months Ended

Mar. 31, 2015

Other Receivables [Abstract]

Financing Receivables [Text Block]

Note 5 – Other receivables (including related parties), net 

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

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Other receivables	$	114,761	$	73,944
Less: allowance for doubtful accounts		(11,470)		(10,198)
Other receivables – related parties		23,143		39,734
Less: allowance for doubtful accounts – related parties		(64)		(64)
Net other receivables	$	126,370	$	103,416

Movement of allowance for doubtful accounts, including related parties, is as follows:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Beginning balance	$	10,262	$	2,606
Charge to expense		1,260		7,670
Less: recovery		(5)		(6)
Exchange rate effect		17		(8)
Ending balance	$	11,534	$	10,262

XML

Summary of significant accounting policies (Details 12) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Summary Of Significant Accounting Policies [Line Items]
Net investment	$ 16,705	$ 16,823
Owned Percentage	20.00%
Xi’an Delong Powder Engineering Materials Co., Ltd.[Memebr]
Summary Of Significant Accounting Policies [Line Items]
Year acquired	2007
Net investment	1,014	1,153
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	$ 15,691	$ 15,670
Owned Percentage	32.00%	32.00%

XML

Debt (Details 4) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Longmen Joint Venture: Loans from Shaanxi Steel Group	$ 352,850	$ 339,549

XML

Related party transactions and balances (Details 11) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Related Party Transaction [Line Items]
Deposit due to sales representatives - related parties	$ 2,553	$ 2,509
Hancheng Haiyan Coking Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Long Steel Group
Deposit due to sales representatives - related parties	652	652
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	1,076	1,075
Long Steel Group [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture
Deposit due to sales representatives - related parties	196	196
Shaanxi Yuchang 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	587	586
Shaanxi Junlong Rolling Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Investee of Long Steel Group
Deposit due to sales representatives - related parties	$ 42	$ 0

XML

Advances on inventory purchases (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Advances on inventory purchases [Line Items]
Advances on inventory purchases	$ 51,944	$ 76,320
Less: allowance for doubtful accounts	(2,504)	(2,501)
Advances on inventory purchases - related parties	95,757	45,617
Net advances on inventory purchases	$ 145,197	$ 119,436

XML

Commitment and contingencies

3 Months Ended

Mar. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Note 22 – 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 March 31, 2015 is as follows:

Year ending March 31,	Minimum lease payment
	(in thousands)
2016	$	2,126
2017		1,946
2018		1,885
2019		1,206
2020		1,206
Years after		40,152
Total minimum payments required	$	48,521

Total rental expense was $0.1 million and $0.9 million for the three months ended March 31, 2015 and 2014, respectively.

Contractual Commitments

Longmen Joint Venture has $9.9 million contractual obligations related to construction projects as of March 31, 2015 estimated to be fulfilled between April and December 2015.

Contingencies

As of March 31, 2015, Longmen Joint Venture provided guarantees to related parties’ and third parties’ bank loans, including lines of credit and others, amounting to $55.4 million.

Nature of guarantee	Guarantee amount		Guaranty Due Date
	(In thousands)
Line of credit	$	52,274	Various from April 2015 to August 2017
Financing by the rights of goods delivery in future		3,099	June 2015
Total	$	55,373

Name of parties being guaranteed	Guarantee amount		Guaranty Due Date
	(In thousands)
Long Steel Group	$	19,654	Various from April to September 2015
Shaanxi Haiyan Coke Group Co., Ltd.		13,048	September 2015
Long Steel Group Fuping Rolling Steel Co., Ltd		3,099	June 2015
Xi’an Laisheng Logistics Co., Ltd		3,262	May 2015
Gansu Yulong Trading Co., Ltd		16,310	August 2017
Total	$	55,373

As of March 31, 2015, the Company did not accrue any liability for the amounts the Group has guaranteed for third and related parties because those parties are current in their payment obligations and the Company has not experienced any losses from providing guarantees. The Company has evaluated the debt guarantees and concluded that the likelihood of having to make payments under the guarantees is remote and that the fair value of the stand-ready obligation under these commitments is not material.

XML

Subsequent event (Details Textual) (Subsequent Event [Member], USD $)	0 Months Ended
	Apr. 14, 2015
Subsequent Event [Member]
Stock Issued During Period, Shares, Issued for Services	500,000
Sale of Stock, Price Per Share	$ 0.98

XML

Plant and equipment, net (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Property, Plant and Equipment [Line Items]
Depreciation	$ 24.9	$ 24.1
Lease Expiration Date	Apr. 30, 2031
Assets Held under Capital Leases [Member]
Property, Plant and Equipment [Line Items]
Depreciation	$ 8.1	$ 7.9

XML

Intangible assets, net (Tables)

3 Months Ended

Mar. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

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

Intangible assets consist of the following:

	March 31, 2015		December 31, 2014
	(in thousands)		(in thousands)
Land use rights	$	30,763	$	30,726
Mining right		2,450		2,447
Software		1,059		1,058
Subtotal		34,272		34,231
Less:
Accumulated amortization – land use rights		(9,308)		(9,127)
Accumulated amortization – mining right		(1,339)		(1,431)
Accumulated amortization – software		(740)		(713)
Subtotal		(11,387)		(11,271)
Intangible assets, net	$	22,885	$	22,960

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)
March 31, 2016	$	946	21,939
March 31, 2017		946	20,993
March 31, 2018		946	20,047
March 31, 2019		946	19,101
March 31, 2020		946	18,155
Thereafter		18,155	-
Total	$	22,885

XML

Capital lease obligations

3 Months Ended

Mar. 31, 2015

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 based on Shaanxi Steel’s cost to construct the assets of $2.3 million (RMB 14.6 million) to be paid over the term of the Unified Management Agreement of 20 years and (2) 40% of any remaining pre-tax profits from the Asset Pool which includes Longmen Joint Venture and the newly constructed iron and steel making facilities. In February 2014, Shaanxi Steel agreed that it will not demand capital lease payment 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 is therefore considered part of the financing for the capital leased assets which is related to the Unified Management Agreement. For purposes of determining the value of the leased asset and obligation at the inception of the lease, the lease liability is then reduced by the value of the profit sharing component, which is recognized as a derivative liability, which is carried at fair value. See 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. As of March 31, 2015, $23.9 million (RMB $146.5 million) energy-saving equipment under these lease agreements have been capitalized and no contingent rent expense has been incurred.

Presented below is a schedule of estimated minimum lease payments on the capital lease obligation for the next five years as of March 31, 2015:

Year ending March 31,	Capital Lease Obligations Minimum Lease Payments
	(in thousands)
2016	$	10,665
2017		175,427
2018		33,657
2019		30,685
2020		29,621
Thereafter		317,780
Total minimum lease payments		597,835
Less: amounts representing interest		(191,741)
Ending balance	$	406,094

Interest expense for the three months ended March 31, 2015 and 2014 on the capital lease obligations was $5.2 million and $5.4 million, respectively.

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Related party transactions and balances (Details 6) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015		Dec. 31, 2014
Related Party Transaction [Line Items]
Advances on inventory purchase - related parties	$ 95,757		$ 45,617
Long Steel Group [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Noncontrolling shareholder of Longmen Joint Venture
Advances on inventory purchase - related parties	7,269		7,139
Shaanxi Shenganda Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Significant influence by Long Steel Group
Advances on inventory purchase - related parties	0		27,549
Tianjin Hengying Trading Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Partially owned by CEO through indirect shareholding	[1]
Advances on inventory purchase - related parties	3,873		3,807
Tianjin General Qiugang Pipe Co Ltd [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Partially owned by CEO through indirect shareholding	[2],[3]
Advances on inventory purchase - related parties	84,547	[2]	7,091	[2]
Others [Member]
Related Party Transaction [Line Items]
Related Party Relationship	Entities either owned or have significant influence by our affiliates or management
Advances on inventory purchase - related parties	$ 68		$ 31

[1] The Company reclassified advances for inventory purchase - related parties related to trading transactions, as noted in note 2(g), to loans receivable - related parties due to their interest-bearing nature.

[2] During the three months ended March 31, 2015, the Company entered into a purchase agreement with this entity to purchase steel related products to resell to Tianwu General Steel Material Trading Co., Ltd. (see Note 19 (h) Customer deposit – related parties). The term of the agreement is expected to be fulfilled within three months after deposits were made. The purchase advances are refundable. For the three months ended March 31, 2015, the Company made $61.9 million of purchase advances of which $3.3 million were utilized. The entity also acts as a customer in the Company’s trading transactions. During the three months ended March 31, 2015, the Company sold approximately $16.0 million to this entity. For the three months ended March 31, 2014, the Company made $29.5 million of purchase advances of which $4.3 million was utilized. The entity also acts as a customer in the Company’s trading transactions. During the three months ended March 31, 2014, the Company sold $1.4 million to this entity.

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