The zirconium chemical industry has been the fastest
growing zircon end-user sector in China, a fact that is easy
to miss if you only read company announcements.
Iluka’s 2017 investment day presentation
revealed that the ceramics market demands 50% of zircon
supply, making it the largest end-user for the mineral. Iluka
is on track to produce 310,000 tonnes of zircon in 2017 after
producing 347,000 tonnes in 2016. In that year, Iluka sold
65% of its zircon into the ceramics sector.
In 2012, Iluka estimated that zircon in the use of ceramics
constituted about 55% of global demand. That year, Iluka
produced 213,800 tonnes of zircon, a 58.4% decrease from the
year before, a downshift in demand that would prove hard to
Looking back to 2006, the company produced about 450,000
tonnes of zircon, and estimated ceramic demand was around 52%
of the total.
It is not until you look back to 2000 that Iluka estimated
that less than 50% of total demand was being derived from
ceramics. In 2000, Iluka was producing about 33% of the
world’s zircon, a volume of about 315,000
Looking back as far as 1990, demand from ceramics was around
40%, in 1985 it was 32%, and it was below 20% in 1980. At this
point, zircon demand was dominated by refractory and foundry
Demand for zircon has been heavily linked to the fortunes of
the ceramics industry since the turn of the 21st century,
when Chinese ceramic and zirconium chemical industries
expanded, and the Japanese economy strengthened.
The Chinese economy has continued to grow, and with it,
demand for ceramics. However, due to process modernization,
substitution and thrifting, this has not translated into
continual growth in zircon demand.
But recent developments may be about to change this trend,
with Iluka stating in its most recent announcement that the
"decline of zircon intensity in ceramics has now stabilized,"
and that the growth of digital printing "remains a positive
development for zircon consumption."
The current market is also characterized by declining supply
due to reserve, resource and inventory depletion as well as
deposit grade and assemblage decline. This has resulted in a
strong zircon price for suppliers.
What is not mentioned in this most recent investor
presentation from Iluka is the continuing rise of the
manufacture of zirconium chemicals, particularly in China. In
2012, Iluka said boldly that "it is possible that
zircon’s use in zirconia chemicals may supplant
its use in ceramics over the next five years".
In a presentation earlier this year, Dr Xue Wang, of Leeds
University in the UK, said that consumption of zirconium
chemicals in China has more than doubled over the past seven
years to reach 138,000 tonnes in 2016.
Xue added that China accounts for 90% of the
world’s capacity, and that about 80% of
China’s zirconium chemicals capacity is accounted
for by zirconium oxychloride (ZOC).
According to the Zircon Industry Association (ZIA), ZOC
(ZrOCl2.8H2O) is "primarily used in white TiO2 pigment
application, antiperspirants and catalysts. It is also the most
popular precursor for manufacturing other zirconium
According to a 2015 report by Artikol’s Reg
Adams, world capacity for zirconium chemicals currently amounts
to 523,000 tonnes per year, with ZOC accounting for nearly
420,000 tonnes of this.
To get this into the right perspective for primary
producers, Murray Lines of Stratum Resources noted in a
presentation in 2010 that the production of 100 tonnes of ZOC
requires 65 tonnes of zircon.
Alkane Resources, a gold miner known for its zirconia and
rare earth Dubbo Project in New South Wales, Australia, said
that zirconium chemical prices at the end of the 2017 financial
year were 40% higher than end-2016, "particularly due to the
Chinese government-led clean-up of the industry, which resulted
in reduced production of ZOC, and also due to the increased
prices of the raw material zircon."
The announcement went on to say that "further increases in
ZOC price seems likely, as China increases the focus on ZOC
Alkane sees a likely decline in production coming out of
China’s Shandong province, but stresses its
overall importance as a chemical, in that "ZOC is the primary
precursor for producing downstream zirconium chemicals and
zirconium dioxide products worldwide".
Alkane therefore sees itself as an "important alternative"
to ZOC production in China.
The fact remains that there has been a rise in demand for
ZOC that shows no sign of stopping. While this may influence
global demand for zircon, it is worth noting that not all
zircon is made equal.
Premium zircon is typically used for ceramics manufacture
such as tiles and sanitary ware, as well as in high-end foundry
applications and additive manufacturing.
On the other hand, a standard or "universal grade" zircon
may be used more widely in zirconium chemicals. Iluka also
notes in a briefing paper dated June 2016 that digital printing
and low-quality ceramics may also use standard-grade
The switch in Iluka’s sales compositions since
2011 reiterates this point; in 2011, 88% of zircon sales were a
premium grade, in 2015 only 60% of sales were premium grades.
Meanwhile, standard-grade zircon has increased to 27% from 5%
as a proportion of sales in the same period.
While a rise in ZOC demand, the end to increasing
substitution, and the switch to digital printing are positive
signs, these changes will also have an unknown effect as
end-users search for lower prices and manufacturers search for
ways to provide this.