Iluka revenue drops despite higher prices

Iluka expects subdued demand for zircon in the first quarter of 2020 with the current economic conditions.

The Iluka synthetic rutile kiln. Picture: Colin Murty

Iluka Resources said production and sales revenue of zircon and rutile declined in 2019, but prices rose.

The company said full-year zircon, rutile and synthetic rutile revenue was $1.1bn, down 4 per cent on the prior year. But it said rutile prices rose 20 per cent and zircon prices rose 10 per cent in the year.

Full-year zircon production was 322,000 tonnes, down from 349,000 tonnes in 2018. Full-year rutile production, however, was 184,000 tonnes, up from 163,000 tonnes the prior year, reflecting completion of expansion projects in Sierra Leone and the start of production at Cataby in Western Australia.

Iluka added that full-year zircon sales were in line with guidance, while full-year sales of titanium products - rutile and synthetic rutile - exceeded production, reflecting high demand. It said rutile sales were “production constrained with limited inventories,” and that zircon sales were affected by a subdued outlook for global economic growth.

The zircon outlook for the first quarter of 2020 is still of subdued demand in light of both current economic conditions and the seasonally low first quarter of the year, Iluka said.

Iluka also said it signed a sales take-or-pay offtake agreement with Kronos Worldwide for 75 per cent of standard-grade rutile produced from the Sierra Rutile operation, effective through to December 2022.

Dow Jones Newswires