IM Prices

By Laura Syrett
Published: Monday, 22 September 2014

Zircon buyers thrift; ilmenite further to fall

Zircon buyers thrifty and resentful of “unfair” prices

Zircon prices and demand are being undermined by solidifying downstream preference for cheaper substitute materials, industry participants have told IM.

European zircon-based chemical producers said that the sharp price jumps for zircon seen in 2010 and 2011 forced buyers into thrifting (using as little zircon as possible in compounds) and, where possible, replacing zircon altogether.

Even though prices have come down from the $1,800/tonne highs seen three years ago, zircon buyers are continuing with their frugal habits.

“There are several products now being used where the zircon has been diluted with the addition of other items, such as aluminas,” one source said.

“Whilst this has brought some changes to the manufacturing process at the customers’ plants Ð requiring changes in viscosity of glaze, for example Ð in general these new formulations are working and are saving at least 10% on zircon costs. Sometimes more than this,” they added.

Major zircon suppliers are reportedly working with customers to try to persuade them that these new low- or no-zircon formulations are not as attractive as they seem.

But, as one source pointed out, “a saving is a saving”.

Participants on both the buy and sell side of the industry have expressed concerns that if zircon prices suddenly jump up again, customers will try to abandon it altogether.

There have been calls throughout the supply chain for sustainable pricing that will benefit the entire industry, but part of the problem lies in the fact that many zircon producers are also battling with low margins in titanium dioxide (TiO2) feedstocks and see zircon as an opportunity to recoup losses.

“Customers are fully aware of the actual costs of mining zircon and have deeply resented big mark-ups,” one source said.

“When zircon products are being sold at $2,500/tonne - up to three times cost of production - and with volumes [for some, of] over 500,000 tpa, the profits [made] are seen by many to be unfair,” the source added.

Major zircon producers contacted by IM and asked to respond of accusations of unfair pricing in September declined to comment.

Buyers said that prices are now just about sustainable with the current volumes of business available, but warned that any further increase will be seen as detrimental to the downstream businesses.




No floor in sight for ilmenite

Traders told IM in September that large mineral sands producers may be partly to blame for the sliding ilmenite price, as established companies attempt to protect their market shares.

“From a cynical point of view, it would appear to be in the interest of larger miners, who dominate the mineral sands market, to keep ilmenite prices low in order to see off smaller competitors and maintain market share,” one trader said.

Sources familiar with the market in China said that, although the country is not exporting huge amounts of ilmenite at present, it has the impetus to be very competitive in the future and can significantly undercut Western producers.

As the Chinese economy slows, the country is likely to export more, a trader commented, adding that the “quality gap” between Chinese minerals sands, including zircon, and that produced by other countries such as Australia and South Africa, is getting narrower.




IM’s full price listing will now only be published online at www.indmin.com/PricingDatabase. If you have any comments or concerns, or wish to discuss any of the grades or prices listed, please contact Laura Syrett, Prices Editor, at lsyrett@indmin.com.

For in-depth fluorspar and graphite price analysis, please visit the IM Data mineral tracker pages online.

Bold indicates a price change from the previous month (it may have changed more than once during the month). All prices are listed in US$ and quoted per tonne unless indicated.