Titanium miner Kenmare Resources said today that it remains on track to achieve its 2019 production and cost guidance.
In a trading statement for the third quarter to the end of September, Kenmare said that shipments were lower than expected due to poor weather conditions impacting loading rates.
But it said it expects shipments to increase significantly in the fourth quarter, due to strong customer demand and seasonally improved weather conditions.
The company, which operates the Moma Titanium Minerals Mine in Mozambique, said that total shipment of finished products for the full year 2019 are expected to be in excess of 1 million tonnes, down from 1,074,400 tonnes in 2018.
Kenmare said that demand for pigment, the main consumer of titanium, remains subdued due to global economic uncertainties affecting purchasing behaviour in key regions.
"However, market conditions for titanium feedstocks were tight in Q3 2019 as a result of constrained titanium feedstock supply," it added.
It said it believes that demand for products of a comparable quality to its ilmenite exceeds the available supply.
As a result, higher prices were achieved in the third quarter of 2019 compared to the second quarter and further spot price increases have been agreed with customers for the final quarter of the year, it added.
Kenmare said the increase in demand for its ilmenite is being driven by purchases for upgrading into high grade feedstocks, for which Chinese domestic ilmenite is unsuitable.
"Coupled with this, supply remains constrained from historically large ilmenite producers, such as India and Vietnam," it added.
It also said that the zircon market weakened in the third quarter, mainly due to slower global growth and disruption to downstream industries in China.
The company said it expects global zircon supply constraints to emerge as existing mines deplete and production reduces in the coming years, which should aid pricing levels in the medium term.
Kenmare is due to pay out its first dividend this month, which it has described as a "watershed moment" for the company.
"We believe the fundamentals for all of our products remain positive due to emerging supply constraints," the company's managing director Michael Carvill said.
"We are delighted to be paying our maiden dividend on 25 October 2019, delivering on our strategy to provide shareholder returns, in addition to growth and margin expansion," he added.