August 16 2005 - Australasian Investment Review
Iluka (ILU) is scheduled to report its FY05 results in 2 days (August 18) and UBS believes there’s plenty of scope for positive surprises.
Management has already given guidance for the result, so the analysts suggest it will be better to zoom in on any commentary on the zircon market, any progress on the Eucla Basin Project, and an update on the Douglas project. All three elements are considered key to the performance of the stock post this Thursday.
Indications with regards to the state of the zircon market are currently very, very positive. UBS analysts state they are now hearing the zircon price is around US$750/t. In addition, Ticor (TOR) commented last week that prices of US$800/t can be achieved for 2006 delivery.
If these price levels are true, Iluka’s share price is bound to shoot higher, the analysts suggest. In general, UBS believes zircon prices should be supported in the medium term as there is limited supply due to come on stream in the next two years.
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