As zirconium silicate (zircon) prices have tripled in the space of 18 months it is timely to review the effects on downstream zirconium product prices and provide an outlook for the future.
The dramatic rise in zircon prices has been a welcome change of fortune for mineral sands companies, where the price has broken through historical resistance levels to settle at about $2,500/tonne, FOB Australia. However, this has created endless headaches for downstream customers, who have found it difficult to pass on price increases, as well as balance stocks to meet customers’ needs, and manage working capital.
As we enter 2012, the outlook for zircon demand has been clouded by a significant slowdown in Chinese demand, as well as concerns over European debt and liquidity levels. Is reduced zircon demand due to substitution or to a general economic slowdown?
Table 1 shows the changes in zircon and...