Iluka Resources (ILU) has posted a fall in March quarter mineral sands production, as it continues to operate at below full production rates, but expects a recovery in zircon demand this year.
Total mineral sands production fell to 221,200 tonnes in the quarter, compared with 271,800 tonnes in the March 2013 quarter.
Iluka attributed the decreased production to asset idling and lower use of its mineral separation plant.
Mineral sands revenue also fell to $130.7 million, compared with $139.9 million in the previous corresponding period, due to subdued sales volumes and materially lower received prices.
Zircon production rose to 77,800 tonnes, compared with 56,100 tonnes in the previous corresponding period. Analysts surveyed by Bloomberg had expected zircon output of between 76,000 and 90,000 tonnes.
Iluka said the lift in zircon production was in line with a planned increase in 2014 as demand recovers and finished goods inventory is drawn down.
The miner noted positive on-ground market indications in the first quarter, including an increase in enquiries and inventory normalisation downstream of the company, pointing to a likely recovery in demand for zircon and high grade titanium dioxide feedstocks during 2014.
Zircon demand continues to lift in North America and China but market conditions remain subdued in Europe, with some pressure on prices causing Iluka to step away from some potential sales.
Rutile production lifted to 33,200 tonnes in the quarter, from 25,800 tonnes in the previous corresponding period, as the miner returned to normal operations in the Murray Basin.
But there was no synthetic rutile production in the quarter after capacity was idled in the June 2013 quarter.
Ilmenite production fell to 110,200 tonnes, from 160,900 tonnes in the previous corresponding period, due to the idling of two mining operations in Western Australia and lower ilmenite production from its Virginia operation.