Yalian Steel Announces Financial and Operational Results for the Year Ended
September 30, 2010

TSX-V:YL

VANCOUVER, Dec. 23 /CNW/ - Yalian Steel Corporation (TSX-V: YL) today announced its financial and operating results for the year ended September 30, 2010. The "Company" or "Yalian" refers to Yalian Steel Corporation (formerly China Drill Corporation) and its subsidiary, Yangzhou Yalian Steel Pipe Co. Ltd ("Yangzhou Yalian"), which operates primarily within the People's Republic of China ("PRC"). The Company completed its qualifying transaction and began trading as a public company in December 2008. Yalian reports its results in Canadian dollars, as reported here, unless otherwise stated.

For the year ended September 30, 2010, Yalian reported revenues of $908,737; cost of sales of $1,335,324; operating expenses of $2,637,896 and other expenses (net of income) of $349,117. Net loss for the year was $3,413,600, or $0.04 per share.

For the three month period ended September 30, 2010, Yalian reported revenues of $387,547; cost of sales of $666,954; and operating expenses of $545,205. Net loss for the three month period was $823,467, or $0.01 per share.

As at September 30, 2010, cash and cash equivalents were $7,442,099, restricted cash was $5,078,700, and the Company's working capital position was $17,677,544. Total assets were $84,493,204, the long-term loans, net of financing costs, were $30,975,324, and total shareholders' equity was $43,921,511.

Operational and Business Highlights

During the year ended September 30, 2010, Yalian achieved a number of operational and business milestones including:

In February 2010, Yangzhou Yalian received approval from the American Petroleum Institute for certification and license registration of "5L X-70 Grade" for its high grade steel large diameter pipe mill and is in the process of applying for additional certification of X-80 grade and higher.

In March 2010, Yangzhou Yalian received an A1 Grade production license from the State General Administration of the PRC for Quality Supervision, Inspection and Quarantine. The "A1 Grade" is the highest production license available and permits Yangzhou Yalian to manufacture LSAW pipes for all grades of steel to be manufactured and sold within the PRC. By the end of March 2010, Yangzhou Yalian had received all of its required permits, licenses and industry certifications necessary to commence operations in China.

For the quarter ended September 30, 2010, the Company manufactured and delivered several sales orders and continued to focus its efforts on the development and expansion of its sales and marketing activities within PRC and abroad. In addition to completing numerous bid submissions for a number of large oil & gas projects in PRC, Europe and the Middle East, the Company was added to the pre-approved natural gas vendor lists for Hubei province, Jiangsu province, Guangdong province and Zhejiang province in the PRC.

As at September 30, 2010, the Company had substantially completed the installation, testing and commissioning of plant and equipment and has recently commenced commercial operations. During the year ended September 30, 2010, the Company completed the planning and engineering phase of its new anticorrosion line and the construction commenced during the month of September. The project is expected to cost approximately $5,300,000 and is expected to be completed in calendar year 2011. The Company's production plant has a rated capacity to produce up to 200,000 metric tons of LSAW pipes per year, depending on product and mix specifications.

For more detailed information, please refer to the Company's filings on SEDAR at www.sedar.com.

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 pipe to service Asia's rapidly growing energy transportation infrastructure market. The Company has recently completed construction of its initial manufacturing facility in city of Yangzhou, in the Jiangsu province of China. The Company's production line has a rated capacity of up to 200,000 metric tons per year, depending on product and mix specifications. 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-70 and higher grade steel.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

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

Lan Shangguan, Chief Financial Officer
Tel. No.: [phone]

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