Iluka Resources, a leading producer of mineral sands, has announced a significant boost in the production of zircon, rutile, and synthetic rutile during the second quarter. Moreover, the company’s sales have risen by an impressive 74%. Here are some key points from Iluka Resources’ second-quarter production report.
Impact on China’s Market
In Q2 2023, China’s recovery was relatively slow. The subdued performance of the real estate market had a direct effect on the ceramic industry, consequently slowing down industrial activity across various zircon sectors. However, the Chinese government has taken measures to revitalize the economy, such as lowering interest rates and implementing other supporting policies.
Stable European Demand
Despite the generally quieter summer quarter, European demand remained stable throughout Q2 2023. Nevertheless, it is anticipated that activity will reduce slightly during this period.
Resilient Ceramic Industry in India
India’s ceramic industry continues to defy odds, showcasing remarkable resilience. Although production was briefly interrupted due to cyclone Biparjoy, which affected the Morbi area, the Indian property market is projected to maintain robust growth.
Inventory Challenges and Macroeconomic Uncertainties
Throughout the supply chain, consumers seem hesitant to hold or build inventory due to broader macroeconomic uncertainties. This cautious approach is being observed across multiple industries.
Titanium-Dioxide Feedstock Markets
The pigment market’s demand for titanium-dioxide feedstock remains subdued, mainly attributed to reduced paint and coatings orders from customers. This decline follows a two-year period of high demand driven by an increase in do-it-yourself (DIY) projects and home construction activities in North America and Europe.
Looking ahead to Q3 2023, it is expected that zircon prices will remain stagnant compared to Q2 2023 pricing.
Iluka Resources’ continuous focus on increasing production and adapting to market dynamics positions them favorably within the mineral sands industry.
Pigment Industry Resilient Despite Lower Demand
Despite lower levels of demand, pigment prices have remained resilient in the current environment. Pigment producers have demonstrated their ability to adjust operating rates to meet demand, unlike in previous soft demand environments where excess stocks were built due to continued production at elevated levels. However, in the current scenario, the majority of producers across the pigment industry have curtailed rates to align production with demand.
Higher Chlorine Prices Drive Selection of High-Grade Feedstocks
The pigment industry in North America continues to face higher chlorine prices. Consequently, producers are opting for high-grade feedstocks to minimize chlorine consumption, thereby supporting stable pricing in H2 2023.
Mining Operations Update
Jacinth-Ambrosia Mining Operation in South Australia
The mining operations at Jacinth-Ambrosia in South Australia yielded 59,000 metric tons of heavy mineral concentrate (HMC) in comparison to 95 thousand tonnes in Q1 2023. The lower HMC production was a result of decreased ore grade; however, the production remained in line with the planned mining sequence.
Cataby Mining Operation in Western Australia
The Cataby mining operation in Western Australia witnessed a rise in HMC production, which increased from 118,000 tons in Q1 2023 to 144,000 tons. The higher HMC production can be attributed to increased ore treatment volumes and improved ore grade.
Processing Operations Update
Narngulu Mineral Separation Plant
The Narngulu mineral separation plant processed HMC from both the Cataby and Jacinth-Ambrosia mines. This processing yielded 107,000 tons of zircon, including zircon in concentrate, and 23,000 tons of rutile. The boost in zircon production was a result of higher zircon-in-concentrate (ZIC) sales compared to Q1 2023, with ZIC production being recognized upon sale.
Synthetic Rutile Production at Capel
The Capel facility witnessed a total synthetic rutile production of 87,000 tons, with both SR1 and SR2 operating at full capacity. SR1 is scheduled for a two-week planned maintenance event in July, while SR2 is expected to undergo a major maintenance outage lasting approximately two months in H2 2023. The planned major maintenance outage for SR2 is currently slated to commence in November.