Chinese titanium and zirconium buyers shift to low-grade ore as margins shrink

Zirconium

Chinese titanium and zirconium buyers shift to low-grade ore as profits shrink across ceramics and coatings markets. Demand has weakened with China’s real estate slowdown, compressing margins for titanium dioxide and zirconium producers. As a result, producers prioritise cheaper feedstocks even if processing costs and impurity levels rise.

Demand slump pushes buyers down the grade curve

Low demand in ceramics and coatings has shifted ore preferences down the grade curve. Downstream titanium dioxide producers now favour low-grade titanium ore to defend eroded operating margins. Conference delegates heard that low-grade ore currently outsells high-grade alternatives in China’s spot market.

Import data shows where Chinese titanium and zirconium buyers shift to low-grade ore geographically. China increased low-grade titanium ore imports from Mozambique and Nigeria while cutting Vietnamese high-grade purchases sharply. Mozambican volumes rose to 1.3mn tonnes, up 5.6pc year on year during January–July. Nigerian shipments grew 18pc to 153,500 tonnes, while Vietnamese supply fell 85pc to 20,800 tonnes.

Zircon feedstock downgrades and weak ceramics utilisation

Zircon buyers mirror this trend, shifting toward low-grade zircon sand and zirconium silicate feedstocks. Manufacturers increasingly accept 63pc or 63.5pc grades instead of traditional 64pc or 64.5pc material. China’s imports of Nigerian zircon ore jumped 367pc to 117,300 tonnes, while South African volumes edged lower. Meanwhile, ceramic tile demand has slumped, with industry run rates below 50pc so far this year.

Despite today’s weakness, executives expect Chinese titanium and zirconium buyers shift to low-grade ore to be temporary. They cite potential macroeconomic recovery, export growth and government support as medium-term demand drivers. In addition, planned output cuts at major titanium and zirconium producers could tighten markets and lift prices. As inventories normalise, buyers may gradually return to higher-grade feedstocks to maximise efficiency and product quality.

The Metalnomist Commentary

Today’s grade downgrades highlight how sensitive titanium and zirconium chains remain to construction and ceramics cycles. Producers able to flex between ore qualities and regions will manage this downturn best and capture upside later. For investors, Mozambique and Nigeria’s rising low-grade exports deserve close monitoring as potential leverage points.