Top Biz News

Chinese zinc maker plans to lift output

(Shanghai Daily)
Updated: 2007-01-17 10:25

Hunan?Zhuye Torch Metals Co, the publicly traded arm of China's biggest zinc maker, said yesterday it will add 100,000 tons of annual capacity when it completes upgrading a production line next year.

The company's planned 1.72 billion yuan (US$221 million) in upgrades will be completed by June 2008, Zhuye, based in central China's Hunan Province, said in a statement yesterday, according to Bloomberg News.

Zinc prices in London almost doubled in the past year as demand for the metal used to coat steel outpaced supply from mines. Consumption in China, the world's biggest zinc user, may rise 7.3 percent this year, faster than production growth of 3.6 percent, according toBeijingAntaike Information Development Co.

"The newly added 100,000 tons is a big amount, which will help consolidate Zhuye's leading position," said Li Zhuiyang, a metals stock analyst at Sinolink Securities Co. Li estimates that before the upgrade, Zhuye could make 400,000 tons of zinc a year.

Zhuye's shares rose by their 10 percent daily limit yesterday to an all-time high of 11.50 yuan, before settling at 11.49 yuan at the close of trade inShanghai.

The upgraded production line, using technology provided by Outokumpu Oyj of Finland, can also produce scrap zinc containing 30,000 tons of the metal a year, Zhuye said. The value of Zhuye's contract with Outokumpu is valued at almost 30 million euros (US$38.8 million), the Chinese company said.