Commodity price woes weigh on Australian miners – by Tess Ingram (Australian Financial Review – July 16, 2015)

Challenging market conditions continue to batter miners exposed to mineral sands, nickel and uranium, as quarterly reports reveal the extent of the sustained downturn on Australian producers.

Mineral sands prices are languishing well below their 2012 peaks, with prices for rutile sitting at about $US800 ($1085) a tonne, compared to a high of $US2050 a tonne, Deustche Bank said.

On Tuesday, Citi commodities analysts dropped their 2015 average nickel price forecast to $US13,960 a tonne “in light of year-to-date price weakness”, with the price trading as low as $US11,495 a tonne on the London Metals Exchange overnight.

Uranium is also in the doldrums, with prices about $US36 a pound, a long way from their high of $US130 a pound set in 2007.

In its June quarter report on Thursday, mineral sands miner Iluka Resources said revenue for the first half increased by 2 per cent to $349.6 million compared to the previous corresponding period, despite a dip in production volume across its suite of products.

Lower production costs, a weaker Australian dollar and stronger production in the June quarter helped to stabilise revenue for the period.

Iluka, Australia’s largest producer of zircon, which is used to make ceramics, said demand in zircon markets remained variable during the quarter but noted “indications of a recovery in demand” for higher-grade titanium feedstocks.

For the rest of this article, click here: