Matilda Zircon sees boost in demand for zircon from Chinese tiles craze

High grade mineral sands developer Matilda Zircon (ASX: MZI) has provided a market update on zircon demand as the company moves towards commencing the Tiwi Islands project in the Northern Territory.

Zircon is primarily used to produce ceramic and porcelain products, with demand driven by global urbanisation trends, particularly in countries such as China and India.

As the global economy has stabilised and is showing signs of recovery, so too has the Chinese demand for zircon improved substantially in the second half of 2009.

According to Barry Fitzgerald of The Age Newspaper 22nd March, "the Chinese are crazy for ceramic tiles. So much so that on most recent estimates, they are laying an amazing 2.8 billion square metres of tiles on an annual basis. And as the "floor space" in the country rises exponentially in line with the massive urbanization that is under way, the figure is only going to get bigger."

Indications are that Chinese demand is robust with increasing signs of supply tightness in the market and it also appears that many Chinese firms are running close to capacity.

Price increases have been signaled to the market by major producers with indications that a price increase of between US$20 and US$50 per tonne of zircon could occur in April with a further price increase in the third quarter.

http://www.proactiveinvestors.com.au/companies/news/6003/matilda-zircon-sees-boost-in-demand-for-zircon-from-chinese-tiles-craze-6003.html