Ilmenite price up BSE29 Apr 2019 12:57
MARKETING
Constraints on the global supply of sulphate ilmenite and high-grade chloride feedstocks (including rutile) have continued into the quarter. In particular, supply of ilmenite from two of the major ilmenite producing countries, India and Vietnam, has declined sharply. In India, a recent blanket ban on private mining of mineral sands by the national government has added to existing bans on mining and exports by state governments in the major producing states of Tamil Nadu and Andrah Pradesh. In Vietnam, export quotas for ilmenite need to be renewed for some producers and the relatively high cost of production, together with the uncertainty of obtaining future export quotas, is restricting mining activity.
Chinese pigment experienced a strong increase in demand following Chinese New Year and pigment producers were able to secure price increases for their pigment through the quarter. The improved conditions have resulted in increased pigment production activity which has maintained a high demand for ilmenite. These conditions have continued into the start of the seasonally strong June quarter.
The emerging ilmenite deficit being created by strong demand and supply restrictions has resulted in a strengthening ilmenite price through the end of the quarter and into the June quarter. Demand for Base Resources ilmenite from existing customers exceeded the Company’s ability to supply and there has been a significant increase in enquiries from new customers globally.
Some western pigment producers have reported that the pigment de-stocking from their customers, which took place through the latter part of calendar 2018, continued into the early part of calendar 2019, but the rate of such de-stocking has slowed. The consensus is that this de-stocking will be completed during the June quarter with pigment demand expected to bounce back by the middle of calendar 2019. Chloride ilmenite pigment production remains strong and the constraints on high grade feedstock supply has continued to support price improvement for rutile. Rutile prices continued to strengthen in the quarter and further improvement is expected in coming quarters.
Zircon demand continued to moderate through the seasonally slow March quarter as a result of global trade tensions and softer economic conditions across most markets. After a period of significant gains, zircon prices stabilised through the December and March quarters but retreated slightly in the early part of the June quarter. The extent of a rebound in zircon demand during the seasonally strong June quarter will largely depend on the general economic performance in China and other major zircon markets.
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