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Jun 18

‘Best market conditions in five years’ prompts Iluka to raise zircon, rutile prices

Iluka Resources will raise prices for its zircon and rutile products, amid strong demand, weakened supply and what it says is a “trend towards high grade feedstocks and chloride feedstocks across the board.”

 

Iluka Resources will raise its zircon price as of April 1 and has already raised its rutile price for the first half of this year, it said, citing robust market conditions.

The minerals sands mining and exploration company will raise its zircon reference price to $1,410 per tonne from April 1 for the following six months from $1,230 per tonne, its price as of October 1 last year.

It has also raised its price for contracted rutile sales by 8% or $70 per tonne for the first half to $895 per tonne.

Its zircon reference price is now 48% higher and realised prices are 60% higher than the lows of the second quarter of 2016, it also noted.

Industrial Minerals recently assessed zircon, premium grade, min 66.5% ZrO2, bulk, cif China prices at $1,350-1,450 per tonne.

Industrial Minerals assessed the price for rutile concentrate min 95% TiO2 bulk cif China prices at $850-950 per tonne, rutile concentrate min 95% TiO2 large volumes for pigment fob Australia at $800-900 per tonne and rutile concentrate min. 95% TiO2 bagged, fob Australia at $950-1,200 per tonne.

In a conference call to discuss its full-year results, Iluka described market conditions as the “best in five years,” noting strong demand for both its zircon and titanium feedstocks. “Zircon supply is expected to remain tight [but there is] limited scope for short-term supplier response,” it said.

While Iluka did not provide guidance for 2018 on its zircon production, it said that its sales are likely to exceed production. The company also painted a positive picture for titanium feedstocks, stating that there is a universal trend towards high-grade feedstocks and chloride feedstocks. Iluka therefore has a positive outlook on pricing, repeating its aim to “maintain sustainable pricing.”

“We are not a speculator – we don’t think speculating the market is useful,” it added. Despite a full-year loss of $172 million due to impairments, strong market conditions have allowed the company to slash debt by 64% to $183 million.

The company has also reinstated a final fully franked dividend, declaring a payout of 25 cents per share. Iluka’s full-year production in 2017 exceeded expectations, it said last month, mainly due to Sierra Rutile contributing 171,000 tonnes of zircon and rutile.

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