Iluka Resources Ltd., the world’s biggest zircon producer, fell the most in five months in Sydney trading after it said output dropped 49 percent and production will be further cut this quarter.
The stock slid 6.2 percent to A$8.71 at the close, its biggest drop since Nov. 14. That compares with a 1.6 percent decline in the benchmark S&P/ASX 200 index.
Production of zircon, rutile and synthetic rutile in the three months ended March 31 dropped to 110,900 metric tons, the Perth-based company said in a statement. Iluka, which said in February it would cut output of the minerals by half, will halt all synthetic rutile operations this quarter.
Output is “expected to decline further as a result, before restoration of more usual settings as demand recovers and a draw down of finished goods inventory occurs,” Iluka said. There’s evidence of improved zircon demand lead by China in markets other than Europe, which remains weak, it said.
“Europe continues to be the thorn in Iluka’s side,” said Evan Lucas, a markets strategist at IG Markets Ltd. in Melbourne.