Iluka Resources’ share price slid more than 6 per cent after the mineral sands miner posted a big fall in third quarter sales revenue due to lower production and demand.
Iluka said today its sales revenue in the three months to September 30 was $224.5 million, down 58 per cent from $532.5 million in the same period in the previous year.
Sales revenue in the nine months to September 30 of $887.3 million was down 19.5 per cent from the previous corresponding period.
Its shares closed 64 cents, or 6.6 per cent down, at $9.00.
The revenue fall reflected significantly lower demand for zircon and high-grade titanium dioxide products, which had been a feature of 2012, Iluka said.
Analysts said the global Zircon market may now have reached the bottom.
Zircon is used in ceramic tiles, and titanium dioxide is used in pigments for paints, plastics and paper.
Iluka’s sales in the three months to September were affected by the northern summer holiday period, when customers closed their production facilities for extended periods.
The company said customer confidence levels remained weak, while it refused to comment on sales volumes or prices.
Production in the three months to September was lower than in the previous corresponding period, in line with the company’s strategy to reduce production in line with demand.
Combined zircon, rutile and synthetic rutile production in the three months to September was 202,100 tonnes, down 35 per cent from the same period in the previous year.
For the year to September, production was 645,900 tonnes, down 27 per cent from the previous corresponding period.
Hartleys Resources analyst Ben Crowley said Iluka’s production and revenue were down in the midst of weak demand as customers were running down inventory, but it appeared the Zircon market might have bottomed out.
"For the sector, it looks more positive,” Mr Crowley said.
"They’re hopeful that the next quarter will see an improvement in sentiment, with better housing data coming out of the United States and China."
Iluka seemed to be relatively comfortable with its strategy of restricting production in times of depressed commodity prices.
However, the company had now put itself up against the might of the Chinese consumer and pigment and ceramic producers.
Iluka shares are well off their record high of $18.90 in July 2011.