Exhibit 99.1

Longhai Steel Announces Strong Second Quarter 2012 Operating Results

• Q2 2012 Net Income Increased 31.9% to $2.4 million, with EPS of $0.22
• 1H 2012 Net Income Increased 36.8% to $5.1 Million, with EPS of $0.49
• TTM EPS of $1.23 vs. $1.06 in the comparable year ago period
• $18.0 million cash and cash equivalents at June 30, 2012, equal to $1.67 per share

XINGTAI CITY, CHINA--(Marketwire (08/14/12)- Longhai Steel Inc. ("Longhai” or the “Company”) (OTCQB: LGHS.OB), a producer of high-quality steel wire products in the People's Republic of China, today announced financial results for the three and six months ended June 30, 2012.

“We experienced a very productive first six months of 2012,” began Steven Ross, Executive Vice President of Longhai Steel. “We achieved record shipment volumes for the second consecutive quarter as the expanded production from our second facility continued to ramp. While revenue was impacted from lower steel prices, the Company sold 295,635 metric tons of steel in the second quarter, a sequential increase of 22% from the first quarter and an increase of 10% compared to the same quarter last year. As we ship more higher value steel wire to a more diversified customer base beginning in the third quarter, we expect further margin upside.”

Three Months ended June 30, 2012

Consolidated net revenues for the three months ended June 30, 2012 was $160.5 million compared to $165.7 million in the corresponding period a year ago, a decrease of 3.1% . Longhai sold 295,635 metric tons (“MT”) of steel in the second quarter of 2012 compared to 267,938 MT in the same period in 2011.

Gross profit was $4.8 million in the second quarter of 2012, representing a gross margin of 3.0% compared to $3.6 million and 2.1%, respectively, in the second quarter of 2011. These increases are primarily attributable to a higher spread between steel wire prices and steel billet prices, as billet prices decreased more than wire prices.

Selling, general and administrative expenses for the three months ended June 30, 2012 were $1.1 million compared to $0.3 in the second quarter of 2011. The year-over-year increase is primarily attributable to capital markets related expenses. Operating income for the three months ended June 30, 2012 increased 13.3% to $3.7 million.

Net income attributable to Longhai common shareholders was $2.4 million, an increase of 31.9% compared to $1.8 million in the second quarter of 2011. Earnings per diluted share was $0.22, an increase of 22.2% compared to $0.18 in the second quarter of 2011, based on 10.7 million and 9.9 million weighted average shares outstanding, respectively.

Six Months ended June 30, 2012

Net sales for the six months ended June 30, 2012 were $296.3 million, an increase of 1.5% compared to the same period a year ago. The Company shipped 538,011 MT of steel in the first half of 2012 compared to 478,167 MT in the first half of 2011.

Gross profit increased 37.4% in the first six months of 2012 to $10.3 million, representing a gross margin of 3.5% .

Operating income was $7.9 million, up 23.4% from $6.4 million in the first half of 2011. Net income from continuing operations was $5.1 million and fully diluted EPS was $0.49 for the first six months of 2012.

Longhai Steel had approximately $18.0 million of cash and cash equivalents at June 30, 2012 compared to $2.8 million at December 31, 2011. Cash flows from operations were $4.6 million for the first six months of 2012 as higher net income was offset by increases in advances to suppliers related to higher sales activity.

The Company had $3.7 million of short-term loans and $9.5 million of banker’s accpetance outstanding at June 30, 2012 compared to $3.6 million and nil, respectively, at December 31, 2011. Total shareholders equity increased to $64.3 million at June 30, 2012 from $57.5 million at December 31, 2011. Longhai Steel raised gross proceeds of $1.2 million through an equity financing in the second quarter of 2012.

Business Updates

Longhai commenced production of high quality steel wire from its second facility in Xingtai, Hebei province, China at the end of the second quarter of 2012. The state-of-the-art facility has a high-speed production line capable of producing a wide variety of conventional and higher value steel wire used in a variety of specialized applications steel wire rope, steel strand, steel belted radial tires, and steel welding rod. Longhai Steel sold all of its initial production to a major distributor in Hebei for domestic and export markets, which significantly reduces transportation costs and inventory risks. The Company also received positive feedback on its new higher value steel wire products and expects to ramp up production of high quality steel wire to full capacity by the end of 2012.

Conference Call

Mr. Steven Ross, Executive Vice President of Longhai Steel will host the conference call. To attend the call, please use the dial in information below:

Please dial in at least 10-minutes before the call to ensure timely participation.

A playback of the call will be available until 9:00 am ET on August 30, 2012. To listen, call 1-877-344-7529 within the United States or 1-412-317-0088 when calling internationally. Please use the replay pin number 10017460.

About Longhai Steel Inc.

Longhai Steel Inc. is a leading producer of high-quality steel wire in eastern China, with annual capacity of 1.5 million metric tons. Longhai’s wire is manufactured into screws, nails, and wire mesh used for fencing and to reinforce concrete. Longhai recently expanded its production facility to include specialized applications such as steel wire rope, steel strand, steel belted radial tires, and steel welding rod. Demand is based on spending in the construction, automotive and infrastructure industries in China. Company website: www.longhaisteelinc.com.

Safe harbor statement

Certain statements in this news release are forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. These forward-looking statements can be identified by terminology such as "anticipate," "believe," "could," "estimates," "expect," "future," "intends," "may," "plans," "should," "will," and similar statements.

The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding China's economic growth, general industry conditions including local supply and price of wire, environmental risks, Longhai 's business or growth strategy, Longhai's ability to achieve the new facility's production expectation; Longhai's ability to develop and produce higher margin products that achieve market acceptance; the success of Longhai 's investments, risks, and uncertainties regarding fluctuations in earnings, its ability to sustain its previous levels of profitability including its ability to manage growth, intense competition, wage increases in China, its ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, its ability to successfully complete and integrate potential acquisitions, withdrawal of governmental financial incentives, political instability and regional conflicts, and legal restrictions on raising capital or acquiring companies outside China. Although Longhai believes that its expectations stated in this press release are based on reasonable assumptions, actual results may differ from those projected in the forward-looking statements. Although these expectations and the factors influencing them will likely change, we are under no obligation to inform you if they do. These and additional risks that could affect Longhai's future operating and financial results are more fully described in its filings with the U.S. Securities and Exchange Commission. These filings are available at www.sec.gov.

Longhai may, from time to time, make additional written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 10-K, 10-Q, and 8-K, in its annual report to shareholders, in news releases and other written materials, and in oral statements made by its officers, directors, or employees to third parties. Longhai does not undertake to update any forward-looking statements that may be made from time to time by or on its behalf, except as required by law.

Contacts:

Longhai Steel Inc.
Steven Ross (English)
Phone: 949-720-1265
Email: sross@longhaisteelinc.com

Cindy Han (English and Chinese)
Phone: 86-139-3099-8773
Email: dhan2625@163.com

MZ Group – North America
Derek Gradwell, SVP, Natural Resources
Phone: 949-259-4995
Email: dgradwell@mzgroup.us
Web: www.mzgroup.us

MZ Group – North America
Scott Powell, Senior Vice President
Tel: +1-212-301-7130
Email: scott.powell@mzgroup.us
Web: www.mzgroup.us