Demand broke out and prices soared by 90% during the year!

The price of zircon sand soared by 90% during the year! Zirconia rose more than 14% in a single day, and the price hit a new high!

　　Since the beginning of this year, the Zirconium market has experienced a high degree of tolerance and product prices have risen sharply. A-share related production companies have also rushed to increase prices and expand production. As an important metallurgical and chemical raw material, what is the future trend of zirconium products? Which listed companies in the industry chain deserve attention?

Tight supply and demand push up the price of zirconium products

According to Baichuan Information, since 2021, the price of zircon sand in Hainan has risen from 8,700 CNY/ton at the beginning of the year to 16,650 CNY/ton, an increase of more than 90% during the year. The latest prices of Zirconium oxide and Zirconium Oxychloride are 59,000 CNY/ton and 18,750 CNY/ton respectively, which are both an increase of over 60% from the beginning of the year.

Why has the price of zirconium products soared?

As an important metallurgical and chemical raw material, zirconium has a wide range of applications, mainly in the form of zirconium silicate and zirconium oxide in ceramics, refractory materials and other fields. Metal zirconium (or sponge zirconium) is further processed into various zirconium materials and used in nuclear fuel assemblies and other industrial fields.

Analysts said that since the beginning of this year, the zirconium market has been volatile, and the shutdown of zircon sand miners in South Africa has aggravated the tight global zircon sand supply situation, superimposed on the strong demand for downstream products in the zirconium market in my country, and the price of zirconium products has maintained a strong operation.

The reporter learned that currently, the global supply of zirconium ore is in an oligopoly pattern. ILUKA, TRONOX and RIO TINTO are the three leading companies in the world for zircon sand, and they control the world. For most of the reserves and production, more than 80% of the domestic zirconium resources required depend on imports.

Since the beginning of this year, the global giant Iluka has continuously increased prices, affecting the price of zircon sand in the international market. In addition, Rio Tinto announced at the end of June this year that South Africa's Richards Bay Mining Company (RBM) has stopped all mining and smelting operations due to security issues.

In the short term, it is difficult to alleviate the tight supply of zircon sand. The demand in traditional industries such as downstream refractory materials and ceramic glazes is stable. Capacitor zirconia has expanded the application fields of new materials and the demand has increased significantly. It is expected that the zirconium market as a whole will continue to maintain a strong trend.

Leading companies raise prices and expand production

In this context, related listed companies have also sent letters to raise prices many times.

On July 6, the domestic zirconium industry leader, Oriental Zirconium, issued a price increase letter: zirconium oxychloride products (including mother liquor) and zirconium dioxide products rose by RMB 1,000/ton and RMB 3,000/ton respectively.

According to Shanghai Securities News reporter's statistics, this is the fifth time that Dongfang Zirconium has increased the price of zirconium products this year. As for the reason for the increase, Dongfang Zirconium Industry stated that "the prices of various raw and auxiliary materials continue to rise and the supply is tight." The company previously disclosed in the announcement that the main overseas zircon sand mines will face a trend of exhaustion and reduced production in the next few years. The zircon sand market has entered a strong cycle in the industry.

Recently, the staff of the Securities Department of Oriental Zirconium Industry said that the company's spot supply is still tight, and production is basically at full capacity.

In addition, Sanxiang New Materials stated on the investor interaction platform on July 22 that the price of zirconium concentrate has risen rapidly recently, and the company's zirconium product quotations are adjusted in real time based on the latest raw material prices to ensure that the company's profit level is reasonable and stable.

As the industry picks up and downstream demand is booming, the pattern of both production and sales has triggered manufacturers to increase their capacity to expand production

Dongfang Zirconium announced on June 22 that it intends to restart the Mindarie project of Mingrui Zirconium; agreed to establish a joint venture with its wholly-owned subsidiary Australia Dongzirconium and Hong Kong Baisheng to promote the progress of the Australian WIM150 zirconium-titanium ore project; invest in the establishment of a subsidiary construction year The project to produce 60,000 tons of high-purity and ultra-fine zirconium silicate, and agree to invest in the construction of an industrial base with an annual output of 30,000 tons of fused zirconia.

Among the intensive layout of Dongfang Zirconium, the two most outstanding projects are the development of upstream resources.

According to disclosures, the Mindarie project of Mingrui Zirconium Industry is located in South Australia, Australia, with an investment budget equivalent to approximately RMB 97 million to RMB 126 million. Under the current mining rights, the project still has 6 mining belts available for mining, with an annual output of 125,000 tons of heavy minerals, and the remaining mining life is 7 to 10 years. The WIM150 zirconium-titanium ore project is located in Victoria, Australia, with 1.65 billion tons of heavy mineral resources, with an average grade of 3.7%. After the project is put into production, Oriental Zirconium has the underwriting rights of 50% of the products.

Western Securities stated that restarting the Mindarie project and advancing the progress of the WIM150 project will help the company obtain more zirconium resources from Australia, promote the adjustment of the company’s industrial structure, and expand the economic benefits of the company’s products. In addition, the new project can help digest the increased supply of zircon sand and at the same time consolidate the company's leading position in the domestic zirconium industry.

It is reported that Dongfang Zirconium is the only domestic listed company that has zirconium resources overseas. It has a zircon sand production capacity of 30,000 tons, a zirconium silicate production capacity of 20,000 tons/year, a zirconium oxychloride production capacity of 50,000 tons/year, and fused zirconium. The production capacity is 16,000 tons/year, and zirconia is 5,000 tons/year.