Yalian Steel Announces Grand Opening of Manufacturing Plant in China

Plans to Construct a New Anticorrosion Coating Line

VANCOUVER , Oct. 19 /CNW/ - Yalian Steel Corporation (TSX-V: YL) ("Yalian" or the "Company") announced today that the Company held the grand opening of its new manufacturing facility in the City of Yangzhou, Jiangsu Province, China on October 16, 2009 . Government officials from the Ministry of Commerce, Jiangsu Province and Yangzhou Municipal Government, Consul General of the Canadian Consulate General in Shanghai were on hand for the ceremony, as well as several of the directors and senior officers of Yalian Steel, from the parent company headquartered in Vancouver , B.C., and senior officials from the domestic steel companies.

The construction of the Longitudinally Submerged Arc Welded Pipe ("LSAW") production line commenced in June of 2008 and was completed on time, and within its projected budget. All civil construction for the main Yangzhou Yalian plant and ancillary buildings has now been completed. All of the equipment required for the production line have been delivered and installed and the facility is fully staffed with production line operators, technicians, and engineers for the lab, testing, and quality control operations. Yangzhou Yalian completed its plant commissioning on August 31, 2009 as scheduled.

"We are very pleased with the proficiency in which our first facility was completed, and the support demonstrated by our local partners," stated Edward (Bud) M. Siegel, Jr., Chairman and Acting Chief Executive Officer of Yalian. "This is a very exciting time for Yalian. The completion of the Yangzhou facility marks the first significant milestone in our growth plan and our entry into a very dynamic oil and gas transmission market here in China . Yalian's early mover advantage, strong partnerships, and quality products provide us with the ingredients for success, as we begin to ramp up our sales and production activities."

The Company also announced today that it will construct a new anticorrosion coating line on the land it had previously reserved north of the Yangzhou Yalian JCOE (J-ing, C-ing, O-ing, Expanding) production line. It will not only complete the existing JCOE production line but also provide pipe coating services to other manufacturers. The new line is an essential part of Yalian's business development plans and integration within its industrial chain. The anticorrosion function of the pipe plays an important role in extending the longevity of the product, saves energy and also decreases environmental safety accidents that could be caused by leakage of fluids carried by the line pipe. As a large and growing oil and gas consumer, China is forecasting continued growth in oil/gas transmission pipeline project construction, especially for high-grade steel large diameter line pipe. The new line is estimated to cost CAD$5.3 million and will be financed by cash on hand or debt.

About Yalian Steel Corporation

Yalian Steel Corporation is a British Columbia corporation focused on the production of high quality Longitudinally Submerged Arc Welded (LSAW) steel line pipe to service Asia's rapidly growing energy transportation infrastructure market. The Company's initial manufacturing facility is in the City of Yangzhou, in the Jiangsu province of China . The Yangzhou Yalian plant utilizes the JCOE (J-ing, C-ing, O-ing, Expanding) process, an advanced method of LSAW pipe production that involves the bending and shaping of X-80 grade steel. The plant is designed to eventually produce 150,000 to 200,000 tons of LSAW pipes per year.

For further company information, please access our website: www.yaliansteel.com

    
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This press release contains forward-looking statements based on current expectations. These forward-looking statements entail various risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. Risks and uncertainties about Yalian's business are more fully discussed in the Company's disclosure materials filed with the securities regulatory authorities in Canada . All amounts are stated in Canadian dollars unless noted otherwise.

For further information: YALIAN STEEL CORPORATION: George Dorin, Acting Chief Financial Officer, Tel. No. [phone]