Lihua International Inc fka LIWA

[chrich12]

Thanks - I should have checked there first. Here's a couple relevant snippets from the 10K.

As of December 31, 2009, our scrap copper refinery capacity was approximately
25,000 tons per annum. To the extent our downstream wire-drawing capacity permits, we process our copper rod into copper wire. Because our
output of copper rod exceeds our capacity to process it into copper wire, we sell our excess copper rod to other wire manufacturers for further
processing. During the nine months ended September 30, 2009, we sold 5,761 tons of copper wire and 8,032 tons of copper rod. We currently
are working to expand our wire drawing capacity so that we can use a greater proportion of our copper rod rather than selling it to other
manufacturers, thereby increasing our profit margins and overall profitability.

Our gross margin is also affected by our product mix. We produce and sell products according to customer orders. CCA magnet wire and CCA
tin plated wire are final products from which we will derive the highest production markup, or gross profit. We also generate a significant
portion of revenue from selling semi-finished products such as CCA fine wire at a lower production cost markup, or gross profit. The March 2009 launch of our scrap copper refinery business has changed our product mix and gross margins. Generally, copper rod
contributes a lower gross profit margin compared to finished wire products. We are still at an early development stage of this new business
segment, and our copper rod production capacity exceeds our copper wire drawing capacity. Therefore, we currently must sell a percentage of
our copper rod production into the open market on an unimproved basis, at lower profit margins. However, we expect a gradual ramping up of
our wire production facilities and thus we will likely be able to utilize a substantial proportion of our copper rod production capacity as raw
material for our copper wire production. As a result, we expect to sell more copper wire at higher profit margins than copper rod over time.