The mineral sands industry has proven a constant performer through even the onerous economic conditions experienced in past months, and Exxaro executive GM for the mineral sands and base metals commodity division Trevor Arran has predicted a positive future for the industry.

Arran tells Mining Weekly that one arm of the mineral sands market, the zircon industry, glided 
through the global recession without much of a speed bump, with prices remaining relatively fair to strong.

Zircon prices peaked earlier this year, reaching $900/t to 
$1 000/t, and dipped to about $750/t through the slump, and currently zircon is trading between $820/t to $850/t.

“The industry has certainly 
experienced a drop-off in volume, especially during the first quarter of the year, straddling the second quarter. Nonetheless, owing to tight supply-side fundamentals and demand remaining reasonably decent, zircon prices have continued to stay high throughout – and even in the midst of a recession,” says Arran.

He adds that, going forward, it looks like the zircon market will continue to tighten, which will probably bring about a further firming of prices around the mid-$800s, “particularly with demand starting to pick up from the US, and some of the Mediterranean countries”.

“The zircon market is still under-
pinned by demand from China, which has supported the global market greatly. When the economic crisis hit, China simply implemented stimulus packages and infrastructure development, ensuring continued economic growth.

“Currently, markets are experiencing a fair amount of supply constraint. Pair that with a growing global demand, and the industry can expect prices to remain strong with even further uptaking for zircon prices in the coming year.

“Zircon is a well-balanced market from a supplier perspective, and those fundamentals bode well for the zircon market going forward. The interim-, medium- and long-term picture for zircon is very positive.”

Further, Arran tells Mining Weekly that titanium dioxide feedstock markets have also experienced some demand pick-up in the second half of the year, which he expects will flow over into 2010.

However, Arran expects that the titanium dioxide feedstock market, unlike the zircon market, may experience an oversupply as pigment producers are starting to restock.

“Prices are certainly firming and we have seen some volume increases on the feedstock side, with demand coming from China and the Far East. In addition, 
demand from the US has also been picking up; however, European markets are still showing a flat trajectory.”

Arran explains that, a year ago, the feedstock market experienced excellent global growth rates, particularly out of China and Organisation for Economic and Development countries.

“With this lucrative outlook and in anticipation of a production run, pigment producers 
started stocking up. However, when the economic crisis hit, the market retracted just as harshly 
as the rest of the commodity markets, with producers significantly cutting back on pigment production. This obviously impacted heavily in terms of sales of feedstock to pigment producers, owing to the stock build-up.

“To manage cashflows, companies had to run down inventories, particularly stocks.

”