China Molybdenum's First-Half Profit Rises 13% on Higher Prices

By Helen Yuan

Aug. 24 (Bloomberg) -- China Molybdenum Co., the nation's second-biggest producer of the metal used in steelmaking, said first-half profit rose 13 percent because of higher prices.

Net income rose to 1.24 billion yuan ($181 million), or 0.26 yuan a share, in the six months ended June, from 1.1 billion yuan, or 0.27 yuan, a year ago, the Luoyang, Henan province-based company said in a statement on the Hong Kong stock exchange today. Sales rose 16 percent to 3.33 billion yuan.

Molybdenum has jumped more than fivefold since early 2004 as demand for corrosion-resistant pipes grows. China may increase consumption of molybdenum by 24 percent this year, larger rival Jinduicheng Molybdenum Co. said in June.

China Molybdenum's shares have fallen 68 percent this year, compared with the 27 percent decline in the benchmark Hang Seng Index.

A global shortfall for the silvery-white metal will last for three years, Wu Wenjun, executive director manager for China Molybdenum, said April 10. Mines in Inner Mongolia and Henan province in China, as well as in Chile will ``take time'' to expand capacity, he said.

China Molybdenum plans to increase production by about 10 percent this year, and is seeking acquisitions, Wu said.

China overtook the U.S. to become the world's biggest producer of molybdenum last year.

To contact the reporter for this story: Helen Yuan in Shanghai at hyuan@bloomberg.net