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All data of this report are from Ruidow and other channels of compliance, and the
analysis is on basis of authors’ professional understanding. The report correctly
states authors’ view in an independent, objective, and just way, and the conclusions
are not affected by suggestions of any third party.
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China’s Zircon Supply - Overview
4
2015 2016 Y-O-Y
Domestic sands 22 18 -18%
Imported sands 422 417 -1.2%
Sands separatedfrom imported concentrates
186(465) 291(605) 56.4%
Total (kt) 630 726 15.2%
Source: Ruidow, Customs
5
Domestic3%
Imported97%
Domestic
Imported
China’s Zircon Supply – Domestic zircon sands
Zircon supply structure 2016
7
China’s Zircon Supply – Zircon sands import origins 2016
Australia 53.1%
Indonesia 5.4%
Kenya 5.6%
South Africa 32.3%
8
China’s Zircon Supply – Concentrate import origins 2016
Mozambique106 kt, 17.5%South Africa
9.5%
Sierra Leone10.1%
Nigeria1.9%
Pakistan4.2%
Australia 270kt, 44.6%
Kenya 2.3%
China’s Zircon Sands Supply – Import volume 2016
9
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
2016/1 2016/3 2016/5 2016/7 2016/9 2016/11
t
Finished Zircon Sands Concentrates
417kt finished zircon sands 605kt concentrates and tailings
China’s Zircon Supply – Australia Import 2016
10
Australian sands
0
200
400
600
800
1000
1200
0
10000
20000
30000
40000
50000
60000
70000
2016/1 2016/2 2016/3 2016/4 2016/5 2016/6 2016/7 2016/8 2016/9 2016/102016/112016/12
USD/tt
Finished Zircon Sands Concentrates & Tailing Price of Finished Price of Concentrates
260 222
161
113
0
100
200
300
400
500
2012 2013 2014 2015 2016
Finished Zircon Sand Zircon Concentrates & Tailing
39.0%
24.5%
23.7%
5.8%7.0% Xiamen
Nanjing
Qingdao
Huangpu
Others
Finished Zircon Sands by Customs
Concentrates & Tailing by Customs
49.5%
37.5%
8.1%
2.1%1.9% 0.9%
Xiamen
Shantou
Haikou
Zhanjiang
Guangzhou
Others
kt
China’s Zircon Supply – South Africa Import 2016
11
0
200
400
600
800
1000
1200
0
5000
10000
15000
20000
25000
30000USD/tt
Finished Zircon Sands Concentrates & Tailing Price of Finished Price of Concentrates
38.9%
24.2%
20.7%
8.5%
4.8% 2.8%
Qingdao
Xiamen
Nanjing
Huangpu
Dalian
Others
Finished Zircon Sands by Customs
Concentrates & Tailing by Customs
32.4%
28.7%
12.1%
11.2%
6.5% 9.1% Xiamen
Guangzhou
Qingdao
Haikou
Zhanjiang
Others134
46
0
50
100
150
200
250
2012 2013 2014 2015 2016
Finished Zircon Sand Zircon Concentrates & Tailing
South African sands
kt
China’s Zircon Supply – Kenya and Indonesia Import 2016
12
0
200
400
600
800
1000
1200
0
500
1000
1500
2000
2500
3000
3500
2016/1 2016/2 2016/3 2016/4 2016/5 2016/6 2016/7 2016/8 2016/9 2016/10 2016/11 2016/12
USD/tt
Kenya Indonesia Price of Kenya Price of Indonesia
Kenya and Indonesia sands
Kenya 25.5 kt for 2016Indonesia 22.8 kt for 2016
China’s Zircon Supply – Concentrates Import 2016
13
Import Originsvolume(t)
Averageimport price(USD/t)
Major import areas
Mozambique 105573 394 Haikou、Zhanjiang、Xiamen
Sierra Leone 61255 184 Xiamen
Pakistan 25176 417 Zhanjiang、Maoming、Wanning
Sri Lanka 22104 227 Maoming
Madagascar 8500 577 Qingyuan、Zhanjiang
Vietnam 6814 473 Qinzhou
China’s Zircon Supply – Concentrating process
14
Concentrate
Magnetic separation
Ilmenite Non-magnetic ore
Gravity separation
Rutile Crude sand
Electric separation
Magnetic separation
Zircon sand
Dry
China’s advantages• Cheap labor• Monazite easily imported• Professional process and equipment
Schematic process diagram
Monazite
China’s Zircon Supply – Domestic concentrator distribution
15
regionsEstablished
ones
Hainan 8
Fujian 4
Guagndong 8
Guangxi 6
Shandong 3
Liaoning 2
Wanning, Hainan
Zhanjiang, Guagndong
Qinzhou, Guangxi
Zhangzhou, Fujiang
Zibo, Shandong
China’s Zircon Supply – Zircon Sands applicability
16
Zircon sands
Chemical
Refractories
Precision casting
Silicate & powder
Australian sandsIndonesian sandsKenya sands
South African sandsHainan sands
Australian sands
All sands
China’s Zircon Demand – Zircon Sands downstream application
17
Zircon sands
Zirconium silicate
ceramics
Zircon powder
Ceramics
Precision casting
ZOCChemical products
Fused zirconia
Ceramics
Refractories
Refractories
Precision casting
China’s Zircon Demand – Demand Overview 2016
18
Demand breakdown
41.4%
22.9%
11.7%
13.3%
10.8%Zirconium silicate&zircon powder
ZOC
Fused zirconia
Refractories
Precision casting
Zircon sands demand 603.4 kt in 2016, y-o-y 4%
China’s Zircon Demand – Silicate manufacturer distribution
19
Guangdong 10
Jiangsu 4
Shandong 6
Fujian 7
Henan 1
Anhui 1
Guangxi 1Capacity 500 kt/Y
China’s Zircon Demand – ZOC manufacturer distribution
20
Guangdong 1
Zhejiang 2
Shandong 5
Jiangxi 2
Capacity 300 kt/Y
China’s Zircon Demand – Fused zirconia manufacturer distribution
21
Guangdong 1
Anhui 1
Liaoning 2
Fujian 3
Henan 4
Shandong 1
China’s Zircon Demand – Ceramics
22
Resource:Chinese website
It hit historic high in 2016. 50 cities transaction area was 37.1 million sqm2 per month, up 20% y-o-y.
China’s house transaction volume (unit: 0,000 sqm2)
Monthly turnover area Yearly turnover area
China’s Zircon Demand – Ceramics
23
Resource:房天下
Housing price rose significantly, Average price close to RMB 50,000 - 60,000 per sqm2 in Beijing and Shanghai.
China’s house transaction price ( average for 100 cities, unit: RMB)
China’s Zircon Demand – Ceramics
24
China’s tiles production
In 2016, tiles production output was 11 billion sqm2, up 1.81% y-o-y;of which, ceramic tiles output was 8.3 billion sqm2, up 0.23%; porcelain tiles output 2.7 billion sqm2, up 7%.
• Glazed porcelain tiles would be the mainstream• Large size more popular• Full-body marble tiles more popular than ever
China’s tiles trend
China’s Zircon Demand – Ceramics
25
1
Henanmore than 200
bathroom enterprises
production halt and rectification
2
Jiangximore than 20
ceramic factories rectified within
specific time
3
Ziboceramic manufactures emission was forbidden at night and production was suspended or cut during G20 Summit.
4
Hebei
coal burning replaced by gas burning
China’s environmental protection policies 2016
China’s Zircon Price – Historical price
26
0
500
1000
1500
2000
2500
3000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
22,000
CIF (USD/t)Incl.Tax (RMB/t)
Hainan Zircon sand Iluka-MB Zircon sand
Price for 2010 - 2016
China’s Zircon Price – Price for 2016
27
920
970
1020
1070
1120
1170
6500
6700
6900
7100
7300
7500
7700
2015/12 2016/2 2016/4 2016/6 2016/8 2016/10 2016/12 2017/2
CIF (USD/Ton)Incl.Tax (RBM/Ton)
Hainan Zircon sand Iluka-MB Zircon sand
$50 /t
$75 /t$30 /t
$50 /t
Price for 2016
Future Outlook
28
• Going Global
• Speeding up IPO process
• Aiming for future merger
• Expanding industrial chains
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