It is reported that shares in China's Jinduicheng Molybdenum rose 24% in their Shanghai debut after Asia's top molybdenum producer raised CNY 8.9 billion as investors were lured by strong prospects for demand for the metal.

Jinduicheng issued 538 million shares, or 20% of its expanded capital. The listing came in the wake of heavy losses in China's stock market due to worries over monetary tightening, excessive supply of new shares and the US economic outlook.

Prices of Molybdenum, used to toughen alloy steel and as a catalyst for chemical production and oil refining, are around USD 33 a pound in London MLY-OXIDE-LON, more than 10 times levels seen between 1999 and 2001.

Some analysts have warned, however, about the cyclical nature of Jinduicheng's business which is tied to the automotive, shipbuilding and property sectors. The company produces 7% of the world's molybdenum.

Shares of Hong Kong listed China Molybdenum Co another major Chinese producer of the metal have tumbled nearly 50% since the start of the year compared with a nearly 15% drop in Hong Kong's benchmark Hang Seng Index.