Ann: Corporate Presentation - TZMI Congress, page-30

@leggy I thought my point was simple and clear... despite TZMI consistently predicting demand growth equal to GDP or even higher like recently, demand growth has demonstrably failed to arrive. Thus, be careful relying on forecasts made by a consultancy on behalf of their clients wanting high demand growth outcomes, and which are inherently unreliable regardless. TZMI's higher than GDP demand growth forecasts may be related any or all of the zircon end-uses below (taken from Iluka presso 2019). Clearly I don;t know how they generate their demand growth... maybe they will finally get it right?,




High demand growth has not materialised historically due to zircon thrifting in tile production, and zircon and/or tile substitution for other materials and products imo. China's property growth really kicked into gear post-GFC stimulus, what drove the 2010-11 zircon price boom, then thrifting and substitution, then price falls into 2014. I can understand why TZMI kept predicting demand growth during China's epic decade long build-out, fact is it didn't happen. Part of the answer may be a global shift away from tile flooring outside wet areas towards naturals (100% or engineered) and laminates etc.

Plenty of commentators see China going ex-property growth for multiple reasons, though ultimately triggered at political levels to ween itself off an over-built, over-indebted property ponzi scheme. There is good news that Chinese property developers are getting bailed out to complete pre-paid but unfinished off the plan properties etc. Strikes me as a sensible 'common prosperity' measure bailing out the public buyers more than bankrupt developers. Not sure it means a return to the over-building boom.


Clearly there is a property building slowdown in the west under way also, although many properties ordered before the music stopped still haven't been completed. The run-off from the 2021 boom will take a couples of years to work through, supporting zircon demand and smoothing out the cycle. Tiles are only 50% of zircon use, so other end uses are also obviously important demand drivers.

I'm not claiming to be an expert in end use demand drivers, my point was historically the market hasn't grown despite China dominating global growth and property construction the last decade. Looking forward, superficially China looks to be slowing, the west is slowing, developing countries are a wild card but eventually economic growth will return as it always does. Supply is an easier metric to model. Build a list of all the producers and their quarterly/annual production forecasts and replacement of aging mines etc. Then follow all the wannabe new mine developers and see who in the zoo looks gets funded or looks like getting funded to develop. Then add it up ...

Good luck