Australia Markets closed

Iluka Resources shares fall on update

Shares in Iluka Resources had fallen by six per cent in early trade after it said sales volumes to the end of November were at the bottom end of guidance.

Shares in the mineral sands miner were down 52 cents, or 6.02 per cent, to $8.12 at 1100 AEDT after it provided an update on the mineral sands market.

The company has had a difficult year due to lower prices in all of its products caused by lower demand, with its share price plummeting 57 per cent since hitting a year-high $18.88 in late January.

It has had to sell zircon - used in ceramic tiles - at below market prices to match a Chinese competitor.

The average realised price for zircon in October and November was $US1,885 a tonne but the competitor had conducted an auction with a starting price of $US1,500 a tonne at the end of November.

"Iluka has responded in order to remain competitive, resulting in a continuation of the above pricing trend," the company said in a statement on Thursday.

Rutile and synthetic rutile prices have also plunged for those two months compared to the rest of the year.

Rutile prices are $US1,990 a tonne from $US2,505 in the first half and synthetic rutile is at $US1,290 a tonne from $US1,950.

It is estimating zircon/rutile/synthetic rutile sales volumes of 475,000 tonnes to the end of December and 425,000 tonnes of ilmenite sales.

Combined with lower prices due to lower Chinese demand for tiles and pigments, that means revenue will be well down after it posted sales volumes last year of 1.61 million tonnes.

A soaring share price propelled it into the top 50 stocks on the ASX in 2011.