JINCHUAN Group Co, Asia's biggest nickel producer, has suspended preparatory work for an initial public offering after China's benchmark index slumped 40 percent from its October peak and nickel prices dropped.

Work on shareholding reform has been halted since December because of "changes" in capital markets, the Gansu Province-based company said in a Website statement, which was posted late Tuesday. The board will decide when to restart the sale process according to market conditions, it said.

China's CSI 300 Index has slumped 34 percent this year on concern that corporate earnings may decline as the government tries to rein in inflation. Jinchuan had planned to raise about 30 billion yuan (US$4.3 billion) in the Shanghai offering to fund takeovers, two people involved in the potential sale have said.

"In a down market, companies are cautious to sell," Zhou Dexin, who helps to manage more than 50 billion yuan of bonds and equities at China Merchants Fund, said by phone with Bloomberg News yesterday.