PERTH (miningweekly.com) – The shareholders of embattled mineral sands miner Iluka have been given hope by MD David Robb’s statement that prices for the company’s zircon products seems to have stabilised.

Speaking at the company’s annual general meeting this week, he said zircon demand had increased during the three months ended March 31, with Iluka seeing a higher level of customer inquiry and a pick-up in orders throughout April and May.

“In key markets such as China and the US, and even now in Europe, albeit from a very low base, sales exceed last year’s levels. In fact, in China, to date, sales are at a similar level to full-year 2012 sales,” Robb added.

He noted that if the price stabilisation was sustained, it would provide essential confidence to underpin volume recovery and would represent a precondition for potential price increases.

In April, Iluka announced that it would further cut back production during the quarter to June, adding that it would idle all synthetic rutile production.

Iluka idled its synthetic rutile kiln 3 in December last year, with kiln 2 being the sole producer of synthetic rutile during the quarter to March, at a throughput of around 55% of normal capacity.

Kiln 2 was idled at the end of the second quarter, with Iluka relying on inventory to meet expected near-term market demand.

The company would also look to idle the Tutunup South mine and complete the idling of the Eneabba operation. It had also idled plant 1 at the Narngulu mineral separation plant from April, with plant 2 to operate at below 50% capacity until demand warranted restoration of normal throughput.

“I would emphasise that forecasting demand throughout 2013 and into 2014 remains challenging, due to factors such as the volatility of global and regional economic indicators and subsequent performance trajectories,” Robb said.

He added that the demand for rutile and synthetic rutile would be dependent on the strength and timing of downstream developments.