China Molybdenum Company expects a global shortage of 2,000 tonnes in 2008 will prevent prices from falling.

Mr Wu Wenjun GM of China Molybdenum said that production may decline in Chile and China, ensuring that a deficit will last for quite a while.

Mr Wu said that China Molybdenum plans to raise domestic sales as export tariffs reduce earnings from overseas. It also will increase sales to the heavy machine and military industries.

China Molybdenum gets 77% of its domestic sales from Taigang, Baoshan, Zhangjiagang Posco Co and Wuhan Iron & Steel Co. Its production of molybdenum concentrate rose by 17% to 16,753.7 tonnes in the first half of 2008 and molybdenum oxides gained 28% to 13,021.8 tonne. It plans to make 17,000 tonnes of the concentrates and 12,000 tonnes of molybdenum oxides in the second half of 2008.

China's apparent consumption for molybdenum surged by 72% in the first half of 2008 to 11,807 tonnes from a year earlier.