SAN MATEO, CA--(MARKET WIRE)--Aug 19, 2008 -- China Armco Metals, Inc. ("Armco") (OTC BB:CNAM.OB - News), a distributor of imported metal ores and scrap metal recycler, announced today the Company's financial results for the second quarter of 2008.

Financial Highlights

Revenues for the second quarter ended June 30, 2008 increased to $13 million as compared to revenues of $5.7 million in the second quarter ended June 30, 2007. The increase in revenues was mainly attributable to increased sales from its metals distribution business in China. Net income for the second quarter of 2008 was $1.8 million attributable primarily to increased sales and the income generated from the favorable termination of a contract with one of our customers, as compared to $588,000 in the second quarter of 2007. On a diluted basis, earnings per share for the second quarter of 2008 were $0.24 as compared to $0.08 in the second quarter of 2007.

The record performance for the first six months of 2008 was driven by a strong first half performance in our metals distribution business as sales reached a record $22.8 million for the first six months of 2008 as compared to $9 million for the same period in 2007. On a diluted basis, earnings per share for the first six months of 2008 were $0.34 as compared to $0.04 in the same period in 2007.

Balance Sheet

At June 30, 2008, total assets were $18.7 million, an increase of over 98% from the $9.9 million at June 30, 2008. At June 30, 2008, shareholder equity reached $7.9 million and total current assets reached $16.4 million with working capital of approximately $5.6 million.

2008 Financial Guidance

The company recently raised $7.4 million through a private equity placement in July and August of 2008. Substantially all of the net proceeds from the offering will be used to expand the company's operations into scrap steel production through the construction of a planned facility in China. The increased capital will also be used to expand its metals distribution operations. Management expects to see continued robust growth in both revenue and earnings for the remainder of 2008. For the full year of 2008, management anticipates that its net income will exceed $6 million.

Commenting on the quarter, Mr. Kexuan Yao, CEO and Chairman of China Armco Metals, Inc., stated, "We are pleased with the strong growth of our operations in the first half of 2008 and excited at the prospects for the future. Our current business demonstrated strong top line growth and the recently raised capital will enable us to enter the scrap steel industry. Management believes scrap steel will drive substantial growth in 2009 as the China steel industry has made substantial investments to increase steel recycling capabilities. We are in the best financial position in the history of our company and are ready to take advantage of the vast opportunities in front of us. We look forward to a strong second half of the year as we build our new operations for the future."

About China Armco Metals, Inc.

China Armco Metals, Inc. (OTC BB:CNAM.OB - News) is engaged in China in the sale and distribution of metal ores and non-ferrous metals to the metal refinery industry in China. Armco intends to enter into the steel recycling industry by constructing a steel recycling facility initially capable of recycling 1 million tons of steel scrap annually. Armco supplies a range of raw materials and scrap metals for various metal refining and steel manufacturing industries. Through its U.S.-based operations, the company is a distributor of organic fertilizer products used to improve soil and growing conditions for the potato farmers of eastern Idaho. These products, which are bio-based rather than petroleum-based, add nutrients to the soil and serve as fungicides so as to increase the size and quality of crops.

Safe Harbor Statement

In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, China Armco Metals, Inc., is hereby providing cautionary statements identifying important factors that could cause our actual results to differ materially from those projected in forward-looking statements (as defined in such act). Any statements that are not historical facts and that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, indicated through the use of words or phrases such as "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "intends," "plans," "believes" and "projects") may be forward-looking and may involve estimates and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. These statements include, but are not limited to, our guidance and expectations regarding revenues, net income and earnings. In addition, any such statements are qualified in their entirety by reference to, and are accompanied by, the following key factors that have a direct bearing on our results of operations:

 
--  Our ability to obtain sufficient capital to fund our planned expansion
    and construction of a scrap steel recycling facility.

--  Fluctuations in raw material prices may affect our operating results
    as we may not be able to pass on cost increases to customers.

--  Our ability to manage growth in operations to maximize our potential
    growth and achieve our expected revenues.

--  Our organic growth strategy, if unsuccessful, may result in a negative
    impact on our growth, financial condition, results of operations and cash
    flow.

--  Our ability to successfully complete construction of our proposed
    scrap steel recycling facility, or, even if constructed, our ability to
    operate the proposed recycling facility profitably.

--  Our ability to successfully implement our acquisition growth strategy
    and meet growth and revenue expectations.

--  The lack of various legal protections in certain agreements to which
    we are a party and which are material to our operations which are
    customarily contained in similar contracts prepared in the United States.

--  Our dependence on our key management personnel.

--  Our inability to meet the accelerated filing and internal control
    reporting requirements imposed by the SEC.

--  The effect of changes resulting from the political and economic
    policies of the Chinese government on our assets and operations located in
    the PRC.

--  The influence of the Chinese government over the manner in which our
    Chinese subsidiaries must conduct our business activities, including the
    impact of governmental regulations associated with the Beijing Olympic
    games.

--  The impact on future inflation in China on economic activity in China.

--  The impact of any recurrence of severe acute respiratory syndrome, or
    SARS, or another widespread public health problem.

--  The limitation on our ability to receive and use our revenues
    effectively as a result of restrictions on currency exchange in China.

--  Our ability to enforce our rights due to policies regarding the
    regulation of foreign investments in China.

--  The restrictions imposed under recent regulations relating to offshore
    investment activities by Chinese residents and the increased administrative
    burden we face and the creation of regulatory uncertainties that may limit
    or adversely affect our ability to complete the business combination with
    our PRC based subsidiaries.

--  Our ability to comply with the United States Foreign Corrupt Practices
    Act which could subject us to penalties and other adverse consequences.

--  Our ability to establish adequate management, legal and financial
    controls in the PRC.

--  The provisions of our articles of incorporation and bylaws which may
    delay or prevent a takeover which may not be in the best interests of our
    shareholders.

--  Our controlling stockholders may take actions that conflict with your
    interests.

We caution that the factors described herein could cause actual results to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. This press release is qualified in its entirety by the cautionary statements and risk factor disclosure contained in our Securities and Exchange Commission filings, including our Annual Report on Form 10-KSB for the year ended December 31, 2007 and Item 1.01 "Risk Factors" of our Current Report on Form 8-K filed on July 1, 2008.

     Contact:
      
     Investors:
      
     Richard Galterio
     Phone: 1-877-China-57
     Email: rgalterio@cdii.net