Import prices of zircon ore in China to keep softly stable
----Interview with Shunfeng Luo
Executive Director
Roche Commodities (Hongkong) Limited
- Roche Commodities (Hongkong) Limited was established in 2009 and mainly engaged in the imports of zircon concentrates from Pakistan, South Africa, Kazakhstan, and Brazil. The company provides raw materials for domestic MSPs in China and supplies high-quality raw materials, mainly including zircon concentrate. Holding about 10,000t of annual supply capacity, the company has good business management and is renowned for its credibility.
- Asian Metal: Welcome Mr. Luo to our interview, and please give us a brief introduction about your company and your working background.
- Mr. Luo: Roche Commodities (Hongkong) was founded in 2009, and is mainly engaged in the import business of zirconium and titanium raw materials and currently imports zircon concentrates from Kazakhstan and Brazil. I joined the RBM Chinese distributor team in 1994 and have engaged in the zircon sand business for 30 years. I was once responsible for the import business for Hainan Wensheng New Material Technology Co., LTD. At present, our company supplies high-quality feedstock to several long-term cooperating Chinese MSPs. We can sustainably supply about 10,000t per year and have a good reputation for our experienced management and credibility.
- Asian Metal: You mainly import Kazakhstan zircon concentrate, and what are the characteristics of Kazakh zircon concentrate?
- Mr. Luo: there are two main mines in Kazakhstan with high grade zircon concentrate. The largest one named OBUKHOVSKY with the monthly output of around 3,000 tons has been closed and auctioned due to legal issues. We don't know when it will restart production. Our company is the first Chinese importer of its zircon concentrate, and the characteristics of this material are the fine-sized particles resulting in low concentrating efficiency, and high content of ZrO2+HfO2 (more than 40%), but standard whiteness. Another mine owns a monthly output of only around 600t due to the power and water supply problems but with a high content of ZrO2+HfO2 and good whiteness.
- Both Kazakhstan zircon mines face the same problem. First, the low temperature in the long winter affects the mining efficiency; the second is the high cost and uncertainty of railway transportation; the third is that their fine-sized zircon concentrate needs higher requirements for MSPs. There are some other exploitable titanium and zirconium mines, which have been explored in the former Soviet Union. The reserves are not big and the content of HMC is average. Especially due to the high impurity of ilmenite, this main mineral is hard to be accepted by Chinese end users.
- Asian Metal: In April, China imported 12,998 tons of zircon ore from Brazil, and the import volume of Brazilian zircon concentrate keeps increasing in recent months. What are the characteristics of Brazilian zircon ore and what's the background of the import increase?
- Mr. Luo: The exploitation of Brazilian beach placers with tantalum niobium ore, tin ore, and monazite ore has a long history, and there are a lot of usable tailing ponds left with very considerate value and volume for secondary utilization. Some companies in China and other countries are aware of the values and started to be involved in the business. However, the state laws in Brazil vary from different states and the exports of zircon concentrate are managed and controlled by complicated and strict laws. Some foreign companies intentionally or unconsciously break the law and get penalties or the cargo is confiscated. Additionally, the transportation in domestic Brazil and to China are both very high in cost, and the time is quite long and uncertain.
- The quality of zircon concentrates in Brazil varies due to the different ore-forming conditions and associated minerals. After the separation, zircon sand from different sources can reach the quality of ZrO2+HfO2 65% min, but the whiteness and radiation levels are various. Recently, it is said that an Australian company started the development of a titanium and zirconium beach placer mine in Brazil, which owns good reserves and grades. But it would take a long time to have the output.
- For the 12,998t of import of zircon concentrates from Brazil to China according to the customs statistics, our best understanding is that the so-called zircon concentrates are the tailings after the magnetic separations of HMC mines for many years, in which are mainly ilmenite ores with ZrO2+HfO2 content of 2-9%. Regularly, the principle of product classification by China Customs is based on the main mineral or the mineral with higher value. These years, quite some big cargos of HMC of Ti&Zr imported to China have been classified as zircon concentrate even though the zircon content is low. Regarding the standards for zircon concentrate, in the “Zirconium Concentrate" non-ferrous industry standard that I participated in formulating, it is determined that the heavy mineral sand containing Zr(Hf)O2 higher than 5% will be recognized as zircon concentrate.
- Asian Metal: The economy in China remains stagnant, and the demand of zircon sand from zirconium silicate reduced in Q2, while the demand of other industries couldn't offset the reduction, and how do you think the international zircon sand import prices in China in Q3?
- Mr. Luo: The global supply and demand of zircon sand both decreased in recent years, making the zircon sand market maintain a weak balance. The cornerstone for the relative stability is from large foreign mines, whose pricings are based on many factors such as economic cycle, market share, global supply, demand structure, inventory, and sales volume, and their price policy is inclined to maintain stability. However, one mainstream mine such as RBM has a very flexible price mechanism due to its small proportion of zirconium business in its whole Rio Tinto business. It would be hard for the market to predict its price trend. Taking the stable price strategy from mainstream international suppliers and the high import cost of raw materials for Chinese MSPs into account, the import price of international zircon sand in the Chinese market is expected to remain stable in Q3. The import price of Australian zirconium sand 66%min would maintain about $2,050 /t CIF China.
- Asian Metal: The import volume of zircon concentrates in China in April increased according to Chinese Customs data. Will these increases have an impact on the price of zircon sand? What do you think of the price trend in China in Q3?
- Mr. Luo: Generally speaking, the price of zircon sand would inevitably decrease in Q3. The increase of imported zircon feedstock from different mines such as Australian Strandline and Sheffield and others in Africa invested by Chinese companies has increased and enlarged the availability of zircon sand supplies in China. The spot market prices of zircon sand in China mainly come from the quotations of the local MSPs, and their sensitivity and reactions truly reflect the market situation. The current reduction in demand for zirconium silicate and its structural modification from the ceramic industry results in the decreased demand for zircon sand, and the root cause of this change is the downturn of the Chinese real estate industry. Additionally, the gradually decreased demands from fused zirconia, chemical zirconium, and the foundry industry have made the demands of the whole market further shrank. The downward price trend of zircon sand from the local MSPs has already formed due to the increasing supply and curtailed demand.
- The price trend differentiates for various grades of zircon sand. Zircon sand of premium grade would remain stable due to the lack of good raw materials, especially with a low content of Al203 and low radioactive and high whiteness, and the price would remain stable or slightly down to around RMB13,500/t (USD1,861/t), the similar price as the same period last year. For zircon sand of standard grade, the price mainly depends on the MSPs who own most of the Mozambique zircon ore, but the demand from chemical zirconium plants shrank at present. The prices of low-grade zircon sand such as 60%min or 63%min also vary based on differences of impurity and whiteness.
- Asian Metal: Will the reduced demand for zircon sand lead to a price decline for imported zircon ore?
- Mr. Luo: In Q3, Chinese MSPs are facing both difficulties of high costs of the import of zircon feedstock and the quiet and price-declining market. The pricing of zircon feedstock mainly takes the official prices of major international suppliers such as ILUKA, TRONOX, or RBM as the reference. Chinese MSPs are short of strong leverage when they negotiate or counter-bid with overseas suppliers due to various motivations and the large number of MSPs in China. Due to their stable pricing policies, the large suppliers of zircon feedstock would keep their prices to their customers in China, but as China is the biggest market in the world, the small and mid-sized suppliers are considering adjusting the prices lower to match the market changes.
- Asian Metal: Do you have any new plan for the future?
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- Mr. Luo: During the decades of working in the zircon industry, I have initiated the import of zircon concentrate from Vietnam, Indonesia, Sri Lanka, Nigeria, Zambia, Pakistan, and Kazakhstan. I'm the first person to import South African TRONOX tailing feedstock to China and one of the first traders to import Brazilian heavy minerals to China. As a pioneer for overseas zirconium and titanium minerals, I’m committed to seeking more suitable minerals for Chinese enterprises and making every effort to provide professional services for overseas suppliers.
