Ownership Submission
FORM 4
Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940
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(Print or Type Responses)
1. Name and Address of Reporting Person *
JAYHAWK CAPITAL MANAGEMENT LLC
   2. Issuer Name and Ticker or Trading Symbol
LSB INDUSTRIES INC [LXU] 		5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
_____ Director __X__ 10% Owner
_____ Officer (give title below) _____ Other (specify below)
(Last)
(First)
(Middle)
8201 MISSION ROAD, SUITE 110		 3. Date of Earliest Transaction (Month/Day/Year)
12/29/2006
(Street)

PRAIRIE VILLAGE, KS 66208		 4. If Amendment, Date Original Filed(Month/Day/Year)
 6. Individual or Joint/Group Filing(Check Applicable Line)
_X_ Form filed by One Reporting Person
___ Form filed by More than One Reporting Person
(City)
(State)
(Zip)
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1.Title of Security
(Instr. 3)		 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code
(Instr. 8)		 4. Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4 and 5)		 5. Amount of Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 3 and 4)		 6. Ownership Form: Direct (D) or Indirect (I)
(Instr. 4)		 7. Nature of Indirect Beneficial Ownership
(Instr. 4)
Code V Amount (A) or (D) Price

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security
(Instr. 3)		 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code
(Instr. 8)		 5. Number of Derivative Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4, and 5)		 6. Date Exercisable and Expiration Date
(Month/Day/Year)		 7. Title and Amount of Underlying Securities
(Instr. 3 and 4)		 8. Price of Derivative Security
(Instr. 5)		 9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 4)		 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 4)		 11. Nature of Indirect Beneficial Ownership
(Instr. 4)
Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Class C Preferred Series 2 (1) 12/29/2006   J(2)   1,600     (1)   (1) Common Stock 6,926.4 $ 0 151,210 I By Jayhawk Investments, L.P. (3)
Class C Preferred Series 2 (1) 12/29/2006   P   100     (1)   (1) Common Stock 432.9 $ 89 151,310 I By Jayhawk Investments, L.P. (3)
Class C Preferred Series 2 (1) 01/04/2007   P   162     (1)   (1) Common Stock 701.298 $ 78 151,472 I By Jayhawk Investments, L.P. (3)
Class Preferred Series 2 (1)               (1)   (1) Common Stock 0   171,390 I By Jayhawk Institutional Partners, L.P. (3)

Reporting Owners

Reporting Owner Name / Address Relationships
 Director  10% Owner  Officer  Other
JAYHAWK CAPITAL MANAGEMENT LLC
8201 MISSION ROAD
SUITE 110
PRAIRIE VILLAGE, KS 66208		     X    

Signatures

 Kent C. McCarthy, Manager   01/04/2007
**Signature of Reporting Person Date

Explanation of Responses:

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1) Each share of Class C Preferred Series 2 Stock is convertible into 4.329 shares of Common Stock at any time, and has no expiration date.
(2) Pro rata distribution from BCS Capital, LP ("BCS Capital") to Jayhawk Investments, L.P. ("Jayhawk Investments"). Jayhawk Investments is a limited partner of BCS Capital. The relationship of the reporting person to Jayhawk Investments is described in Footnote 3.
(3) This Form 4 is filed by Jayhawk Capital Management, L.L.C. ("Company"). A Form 4 reporting the transactions reported herein was also filed by Kent C. McCarthy, the manager of the Company. The Company is the general partner and manager of Jayhawk Investments and Jayhawk Institutional Partners, L.P. ("Jayhawk Institutional"). As of the reporting date, Jayhawk is the indirect benefical owner of 151,472 shares of Class C Preferred Series 2 Stock owned by Jayhawk Investments and 171,390 shares of Class C Preferred Series 2 Stock owned by Jayhawk Institutional. The Company disclaims beneficial ownership of all securities covered by this statement (except to the extent of any pecuniary interest therein) and this report shall not be deemed an admission that such reporting person is the beneficial owner of such securities for purposes of Section 16 or any other purpose.

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