Released on June 16, 2011

Consumption of zircon, a sand used in some specialty metalcasting applications, rebounded in 2010 and is projected to grow 5.4% annually in the near future, driving material prices higher, according to metals and minerals research firm Roskill Information Services, London.

Use of zircon sand in metalcasting applications has not grown over the past decade, according to Roskill, but growth in other markets has pushed the demand, affecting metalcasters.

Consumption of zircon reached 1.33 million tons in 2010 following an 18% fall in 2009 due to the global economic downturn. Growth over the last decade has come mainly from the ceramics and chemical sectors, growing by 4.1% per year and 7.5% per year, compared to overall market growth of 2.6% annually. China now accounts for over half of total consumption, with the wider Asian region accounting for two-thirds of consumption.

Roskill said capacity for zircon production might rise by only 2.3% per year through 2015, as only a few new projects are scheduled to be commissioned. Zircon is produced predominately in Australia (40% of output in 2010), South Africa (29%) and the U.S. (8%). Output is controlled by four major producers—Iluka Resources, Richards Bay Minerals, Exxaro Resources and DuPont together accounted for two-thirds of capacity in 2010.

Roskill reports that continued price increases for zircon should be unsustainable, and reduction of zircon use or substitution may reduce demand. Higher prices are expected to prompt increased interest in new sources of supply.