TZMI Analysis Concludes That a Zircon Supply Shortage is Inevitable in the Next Decade

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The Global Zircon Industry: The Next Decade is a 322-page document that is the eighth in a series of comprehensive reports on the zircon industry which have been published by TZ Minerals International Pty Ltd (TZMI) since 1994.

Short-term zircon price weakness, but prices beyond US$1,000/t a medium-term reality

[23 December 2009: Perth, Australia (PR Web)] The global zircon industry has encountered a period of great uncertainty as a result of the global financial crisis. Consumption in 2008 was virtually the same as in 2004 and 7.4% below the record 2007 level, due to the sudden collapse of demand in the last quarter, as uncertainty gripped all markets. This trend continued into 2009, where a further decline in demand has occurred. However, there are signs of improvement as China, the largest market for zircon, leads a now-recovering world economy out of the crisis. On the supply side, where significant stocks had been built up in late 2008 and early 2009, production had to be adjusted downwards.

The analysis of the global zircon market presented in this publication reveals and details the expected transition from oversupply to significant structural deficit in the next decade. This shift in the market supply/demand balance holds consequences for all industry participants. TZMI expects the next decade to unfold in three phases.

The first phase, starting in 2010, will be characterised by higher than normal opening inventory levels and a supply surplus with recovering demand. This situation is expected to last until 2012.

The second phase will be one of transition and likely to occur from 2012 until around 2015. In this phase the market is expected to achieve balance with growth in zircon demand and a flat supply level. Few new projects are expected to contribute to zircon supply and some decline is predicted from existing operations.

The timing of the third phase is dependent on the relative movements of the supply and demand components of the zircon market and is likely to start before 2015. The third phase onset will be caused by significant reductions in output from existing producers and limited contribution from new projects. This phase will see the market move into structural deficit.

The zircon price is not expected to fully react to the supply/demand situation in the short term as a result of pricing discipline by some of the leading zircon producers. This should be reflected in steady to slightly declining prices despite the comparatively high inventory levels currently seen in the market. As the transition from short term surplus to structural deficit occurs it is highly likely that the zircon price will move above US $1,000 per tonne on a nominal FOB basis. The only uncertainty in TZMI’s price forecast is the timing of the price move above US $1,000 per tonne.

The zircon book examines this outlook in greater detail with analyses of individual end-use sectors and potential new supply sources. It also includes an annual zircon price forecast out to 2015 with high, low and base case scenarios. The level of detail and breadth of coverage make this publication indispensible for all participants in the global zircon market.

Established in 1994 and headquartered in Australia, TZ Minerals International (TZMI) is an independent consulting and publishing company operating a team of expert consultants from global locations including Australia, the US, South Africa, China and Europe. TZMI’s team of principals and specialist consultants have been closely involved in the mineral sands and TiO2 pigment industries since the 1970’s. With well over 100 years of experience, TZMI helps industry participants with practical technical-commercial data, analysis and solutions as well as publishing specialised market studies and reports based on its comprehensive database of production and market data.


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Gavin Diener
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