Jan. 3 (Bloomberg) -- Baoji Titanium Industry Co., the Chinese supplier of the metal to Boeing Co., plans to raise as much as 3.2 billion yuan ($439 million) selling shares to build additional capacity to meet global demand.

Baoji Titanium, China's biggest producer, will sell no more than 50 million yuan-denominated A shares, at 64.06 yuan apiece, in Shanghai, the Baoji, Shaanxi province-based company said today in a statement to the Shanghai stock exchange. The sale is priced at a 7.2 percent discount to yesterday's closing share price.

Global demand for titanium products, used by Boeing and Airbus SAS to make lighter, more fuel-efficient planes, may rise to 236,000 metric tons by 2017 from a projected 154,000 tons in 2012, Baoji Titanium said in the statement. China, the biggest producer of the metal, used 13,985 tons last year.

Baoji Titanium will use 1.5 billion yuan from the proceeds to fund seven projects including a titanium strip production line and a sponge plant, the company said. The balance will be used to replenish capital, it said.

Baoji Titanium fell as much as 2.8 percent to 67.10 yuan, trading at 67.15 yuan as of 11:10 a.m. in Shanghai.

Domestic demand for titanium is also rising, and may reach 40,000 tons by 2017, the company said.

The company aims to produce 16,000 tons of titanium and alloy products by 2010, accounting for 10 percent of the global market, it said. China accounts for 46 percent of global reserves, it said.

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

Last Updated: January 2, 2008 23:39 EST