Iluka Earnings: Weaker Result Driven by Subdued Mineral Sands Markets

Iluka Resource’s first-half 2024 adjusted EBITDA of about AUD 260 million fell 28% on last year due to lower prices and sales volumes, and higher unit cash costs. Nonetheless, it was better than we expected. The main difference to our expectations was zircon sales of around 110,000 metric tons compared with our estimate of about 160,000 metric tons for the year. China’s weak residential property sector along with slower Western real estate markets due to higher interest rates means mineral sands markets are subdued. Yet the industry remains disciplined, with producers managing production to maintain a balanced market and support a relatively stable pricing environment. For its part, this has seen Iluka reduce sales and build inventory in recent years, which it is now starting to draw down to meet solid demand.