The firm, which is selling 200 million shares in its Hong Kong initial public offering, said it had sufficient inventory to meet current demand.

Lee Kee shares will debut October4 on the main board.

Chief executive Clara Chan Yuen- shan said customers, mostly mainland manufacturers, were buying their metal requirements in smaller consignments and over a shorter period of time.

For example, in the past a company would make a single purchase for all the zinc it needs in one month. Now they are likely to buy on a weekly basis.

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"Our business focus is on the supply chain role and we have a wide range of customer base. The fluctuations of metal prices will only change the way they order," said Clara Chan.

Chan Pak-chung, the company's chairman, conceded that prices of nonferrous metals such as zinc, nickel and aluminum have fluctuated widely in recent times. "But the price of zinc still stands tough even if prices of other metals have fallen recently," he said.

Trading of zinc and zinc alloy make up over 80 percent of the company's turnover. "We would also sell or buy futures contracts in the London Metals Exchange market to hedge against the net exposure to price fluctuations," the chairman said.

As at May 31, the metals trader held 17,094 tonnes of zinc, which according to the chairman would be enough to weather recent metals price volatility.

As for its IPO, the firm has set an indicative range of HK$1.94 and HK$2.7 per share. About 20 million shares will be available to the public.

Net proceeds from the offering are estimated at HK$423 million.

About HK$125 million will be spent setting up trading companies and representative offices in major cities such as Shanghai and Guangzhou. Another HK$110 million will be used to construct production plants. The company hopes to expand its annual zinc alloy production to 120,000 tonnes in 2008 from 57,600 tonnes at present.

Lee Kee said future dividends would take up 25 to 35 percent of net profit.

Cazenove Asia, lead manager of Lee Kee's listing, said the price-earnings ratio will be between 7.67 and 10.67 times. The public offer opens today.