In a statement filed to the Shanghai Stock Exchange, Bluestar said demand for new chemical materials had fallen in 2009 due to the economic slowdown. Prices of its products dropped while raw material prices kept increasing, it said.

The Beijing-based company said it had suffered a loss of 154 million yuan in 2008.

Earnings per share stood at minus 0.29 yuan in 2008. Bluestar is yet to announce its final annual report of 2009.

On Wednesday, Bluestar tumbled 4.79 percent from the previous closing to end at 12.32 yuan per share in the morning session.

The company had said its operating revenue dropped 17 percent to 5.32 billion yuan in the first three quarters of 2009.

Bluestar's current market value stood at around 6.5 billion yuan. It is one of the three listed companies under the China National Bluestar (Group) Co., Ltd, which is owned by ChemChina, the country's largest chemicals producer.

Earlier this month, Bluestar New Chemical Materials had signed an agreement with Cabot (China) Ltd, a subsidiary of Boston-based Cabot Corporation, to expand fumed silica capacity of the companies' joint venture in South China's Jiangxi Province.

The two companies would increase production at the Jiangxi plant to 15,000 tons by 2011, making it the largest producer in the world, according to Bluestar.