Iluka Drops on Weaker Second Half Sales Outlook: Sydney MoverDavid Stringer
Iluka Resources Ltd., the world’s biggest zircon producer, fell to the lowest in more than three months in Sydney trading after saying China’s demand declined.
The Perth-based company slipped 4.4 percent to A$10.00, the lowest since July 1. Australia’s benchmark S&P/ASX 200 Index was little changed.
Residential housing construction growth in China slowed to the equivalent of 1.8 million apartments in August, according to data compiled by Bloomberg Industries. About 75 percent of floor coverings in new homes in China are tiles, according to Iluka, which is opening new offices in the country to target sales in inland provinces. Zircon is used to glaze ceramics, including tiled floor coverings favored in China, the biggest consumer of the mineral.
Weak demand in the quarter is “unlikely to be offset in full by stronger sales volumes in the fourth quarter,” Iluka said today in a statement.
Revenue from mineral sands declined 35 percent in the quarter to A$147 million ($140 million) from A$224.5 million in the same period a year earlier on lower prices.
Production of zircon was 98,100 metric tons in the quarter, from 77,700 tons in the same period the previous year, Iluka said. The median of five analyst estimates compiled by Bloomberg was 80,000 metric tons.