Iluka Resources Ltd. said it produced more of its key mineral sands, such as zircon, in the third quarter of 2021 versus the three months prior. Here are some remarks from its quarterly operational report.

On recent zircon demand:

"Strong demand for all zircon products continued in Q3, with sales of 89,000 [metric] tons, including zircon-in-concentrate. Chinese tile production rates were steady over the quarter after returning to pre-pandemic levels in Q2. Power supply restrictions emerged towards the end of the period causing some disruption to production lines. Tile production rates in India continued to recover throughout the quarter despite exports being negatively impacted by container shortages and subdued domestic tile demand. European tile production continued to outperform, and production rates in key tile producing countries in South America and in Turkey continued to improve, with production returning to pre-pandemic levels."

On the outlook for zircon demand:

"The outlook for refractories and foundries remains positive and demand for fused zirconia is robust. Overall, the ceramics industry is experiencing sustained growth in sales. However, profitability is being challenged by increasing costs throughout the supply chain. The Covid-19 pandemic and associated logistics disruptions remain a headwind, while energy supply shortages are presenting new challenges in some tile producing countries. A number of Iluka's customers and suppliers are closely monitoring developments in the Chinese real estate industry."

On zircon prices:

"Iluka has increased pricing of zircon sand for Q4 2021 by US$120-US$170 per ton, effective from Oct. 1. Prices vary by region and also reflect responses to increased logistics costs associated with dislocated supply chains. While Q4 is typically a seasonally slower sales period, Iluka's Q4 2021 zircon sales are fully committed, providing an indication of ongoing supply-side tightness in this market. The company expects Q4 sales volumes in line with those achieved in Q3, though with a higher proportion of zircon-in-concentrate."

On titanium-dioxide feedstock markets:

"The global pigment market remains robust with demand in all regions outpacing supply. Pigment pricing momentum is continuing, with increases of US$175-US$200 per ton announced by all major producers for Q4. In China, the production of both pigment and titanium feedstocks was impacted by energy shortages throughout the period. Exports from China continue to be impacted by unprecedented logistics costs associated with container shortages. More broadly, pigment inventories are well below seasonal norms and long lead times persist as North American and European pigment producers continue to face shortages of chlorine. In order to manage high chlorine costs and constrained supply, pigment producers are increasingly looking to boost head grades in an attempt to reduce their requirements for chlorine. These developments are driving increased demand for high grade feedstocks such as synthetic rutile and natural rutile. All of Iluka's synthetic rutile and natural rutile is under contract for the remainder of 2021."

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

(END) Dow Jones Newswires

10-20-21 1901ET