Titanium and zircon miner Kenmare Resources said today it expects the fourth quarter to be the best quarter of 2022 for both shipments and production.
In a trading update for the quarter to the end of September, Kenmare said its ilmenite production increased 25% in the third quarter compared to the second quarter.
This saw it return to an annualised run rate of 1.2 million tonnes a year as it benefited from higher mining rates and ore grades.
Shipments increased by 48% after the return of the company's largest transshipment vessel from scheduled maintenance.
Kenmare operates the Moma Titanium Minerals Mine in northern Mozambique and its products are consumed in items, such as paints, plastics and ceramic tiles.
In today's trading update, Kenmare also said that pricing for its products increased again in the latest three month period under review, adding that its order book for the fourth quarter is largely committed.
But it also noted that pigment demand weakened through the quarter, affected by Chinese and European market conditions.
Kenmare reported a stronger sales performance in the third quarter of 2022, supported by increased shipment volumes and higher prices for its ilmenite and zircon products.
It also said the quarter marked the eighth consecutive quarter of ilmenite price increases.
Meanwhile, the supply of titanium feedstocks continued to increase, mainly from Chinese producers in Mozambique and producers in the US.
However, a weaker iron ore market in China has resulted in lower production of ilmenite as a by-product from producers in China, which it said is helping to balance the market.
A weaker pigment market is likely to impact demand for ilmenite in the fourth quarter.
Kenmare said, however, that it has contracts in place for the majority of its expected sales in the quarter, with pricing continuing to be strong as high-quality ilmenite remains in short supply.
Kenmare also said that although demand for its zircon products remains robust, the zircon market has been exhibiting similar dynamics to the pigment market.
It noted that demand in China is weak and European ceramics producers have been impacted by higher energy costs.
"Prices in the spot market in China moved significantly above prices in the rest of the world but have declined in recent weeks, and this will result in lower prices for Kenmare's concentrates products sold to China," it said.
"However, zircon supply remains constrained and prices outside of China are stable, which benefits Kenmare as the majority of its primary zircon is sold in Europe," it added.
"We expect demand for titanium feedstocks to moderate in 2023, but we believe the fundamentals of our product markets remain robust," the company's Managing Director Michael Carvill said.
Mr Carvill also said that the company had a Lost Time Injury in late September. Before this, he said the company had almost 12 million LTI-free hours worked at the Moma Mine, which he said was a testament to the commitment of the team on site to achieving an industry-leading safety performance."
