China Zircon Sand Market – Status and Outlook in 2013

Liu Li, Zircon Industry Assistant Analyst www.Ruidow.com

Contents

Zircon Sand Price Trend in Chinese Market

Domestic Zircon Sand Supply

Zircon Sand Consumption Structure in Chinese Market

Zircon Sand Outlook in Chinese Market

1、Price Trend Australia , Indonesia, Hainan Sand Price Review In China

0

5,000

10,000

15,000

20,000

25,000

Price (RMB/t)

Australia 66% Premium Grade Indonesia 66% Premium Grade Hainan 65% Premium Grade

1、Price Trend Indonesia Zircon Sand Concentrate Price Review

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

Jan-

10

Mar

-10

May

-10

Jul-1

0 Se

p-10

N

ov-1

0 Ja

n-11

M

ar-1

1 M

ay-1

1 Ju

l-11

Sep-

11

Nov

-11

Jan-

12

Mar

-12

May

-12

Jul-1

2 Se

p-12

N

ov-1

2 Ja

n-13

M

ar-1

3 M

ay-1

3 Ju

l-13

Sep-

13

Nov

-13

Jan-

14

CIF Price (USD/t)

Indonesia Zircon Concentrate

15.5

2、Zircon Supply Domestic and Import-(Zircon Sand, Equaled to Finished)

599

30

0

100

200

300

400

500

600

700

800

2009 2010 2011 2012

2013

Supply (kt)

Import Domestic

2、Zircon Supply Zircon Sand Import 2009-2013

(kt)

404

377

0 100 200 300 400 500 600 700 800 900

1000

2009 2010 2011 2012 2013

Finished Zircon Sand Zircon Concentrates & Tailing

2、Zircon Supply Zircon Sand Supply 2009-2013 (By Destinations)

49% 56% 56% 47% 53%

22%

27% 15%

17% 19%

10%

6%

10% 13%

7%

12% 7%

7% 6% 5%

8% 3% 13% 17% 16%

2009 2010 2011 2012 2013

Australia South Africa Indonesia Domestic Others

2、Zircon Import

1.6

29.1

26.2

5.6

0

10

20

30

40

50

60

70

2009 2010 2011 2012 2013

Import (kt)

Madagascar Mozambique Sierra Leone

27

43

60.7 60.9

3、Zircon Demand

Zircon price falling, less ZrSiO4 substitutes More zirconium chemicals export, downstream products vigorously develop Daily glass slightly recover

3、Zircon Demand ZOC Export

kt

0

10

20

30

40

50

60

2009 2010 2011 2012 2013

Japan America Europe Others

41.9

3、Zircon Demand Consumption Structure 2013

Total Demand: 614kt

43%

20%

11%

15%

11% Ceramics

Zirconia & Zr Chemicals

Fused Zirconia

Refractories

Foundries

4、Outlook

New Supply

Changcheng Mining MZI

Hainan Haiyu Guangxin Sino-Africa Resource

Wogen Metal Commercial Tizir

Avg. annual production 85kt Avg. annual production 25kt

Avg. annual production 31kt Avg. annual production 13kt

Sales aggreement with Tricoastal Avg. annual production 55kt

4、Outlook

Import and Price of Indonesia Zircon Sand

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000 Ja

n-10

Mar

-10

May

-10

Jul-1

0

Sep-

10

Nov

-10

Jan-

11

Mar

-11

May

-11

Jul-1

1

Sep-

11

Nov

-11

Jan-

12

Mar

-12

May

-12

Jul-1

2

Sep-

12

Nov

-12

Jan-

13

Mar

-13

May

-13

Jul-1

3

Sep-

13

Nov

-13

Jan-

14

CIF (USD/MTU) Import (t)

Zircon Concertrates Finished Zircon Sands Cenceratrate CIF Price

4、Outlook

Challenges Air pollution

Over capacity

Opportunities Actively promote urbanization process

Improving export market

4、 Outlook

Less ZrSiO4 substitutes in tiles

Actively develop downstream processing products

Ink-jet technology popularity

In 2014, the downstream demand for zircon is

expected to increase slightly in China, but the

supply growth would be stronger. Imbalance

between supply and demand is still outstanding.