Ann: Iluka Resources June 2017 Quarterly Production Report, page-5

From AFR:

Iluka Resources says it expects demand for its mineral sands products to continue to improve this year after stronger first half conditions allowed it to reduce net debt by 40 per cent.

Joining its mineral sands peers in flagging a long-awaited improvement in market conditions, Iluka said revenue from the sale of zircon, rutile and synthetic rutile in the first half of 2017 had jumped 46 per cent year-on-year to $470 million.

The increase was largely driven by a 43 per cent surge in sales volumes, but Iluka was able to increase the prices it sets for its products as demand increased.

The Perth-based miner said the weighted average price it received for zircon was up 7 per cent in the first half to $US871 per tonne and rutile up 4 per cent to $US741 per tonne, both before further price increases from July 1.

Iluka is the world's largest producer of zircon, which is used in ceramics. Demand for zircon remained strong in the second quarter, Iluka said, and was expected to increase in coming months. "Iluka is of the view that, in the absence of a deterioration in global economic conditions, the demand outlook for zircon in 2017 and 2018 is for moderate growth," the company said.

Iluka said it believed it was the only zircon player with "significant inventories" and it would sell to meet customer demand "rather than fuel speculative trading", which would provide pricing stability.

In June Iluka announced it planned to restart mining in December at its Jacinth-Ambrosia project in South Australia in response to better market conditions.

The miner also produces the titanium dioxide feedstocks rutile and synthetic rutile, primarily used to make pigments for paint, for which it said it also expected demand to remain strong for the remainder of the year.

The positive outlook comes after similar market commentary from Rio Tinto, Base Resources, and Ireland's Kenmare Resources, which Shaw and Partners analyst Peter O'Connor said reflected "the first time in five years that [mineral sands] is starting to look quite robust across the board".

"It has taken a while to get a succession of quarterly price increases in both markets to get the confidence that things are moving in a favourable direction and to break the downtrend from 2011," Mr O'Connor said.

"Demand has been firm and rising, allowing modest price increases through. It would appear lessons have been learnt from 2010 to 2012 and the companies are moving a bit more cautiously on gradually increasing prices."

Iluka said it had reduced net debt to $305 million at the end of June from $506 million at the end of December, a 40 per cent reduction in six months, which Iluka credited to first half free cash flow of $180 million and a stronger Australian dollar revaluing the US dollar denominated debt.