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THE horror 18-month period of a weak market for Iluka Resources' mineral sands products could be over after the miner said demand and prices were up.
A slowdown in China's property sector amid a credit crunch last year brought demand for Iluka's zircon and rutile, used in ceramic tiles and paint respectively, almost to a standstill.
Based on a strong first half, zircon sales in 2013 would exceed its production, Iluka said in a statement.
It sold 211,000 tonnes of zircon in the first half of 2013, almost as much as the 214,000 tonnes it sold for the entire 2012 year.
The better outlook overshadowed the unsurprisingly weak overall sales revenue and volumes for the first half it released on Wednesday.
Traders sent the company's share price up 49 cents, or 4.7 per cent, to $10.91.
"Aggregate zircon demand has improved significantly", the company said in a statement.
It is now planning to produce 280,000 tonnes of zircon, instead of 220,000.
China is its biggest customer and floor space sales there of 500 million square metres for the half were up 30 per cent and estate loan growth was at two-year highs, which are positive indicators for tile production.
However, demand is still weak for rutile and synthetic rutile used to make titanium dioxide for paint and it has cut sales forecasts for that to 200,000 tonnes from 275,000.
Revenue for the first half $382 million is 42 per cent weaker than the $663 million it received last year.
Revenue per tonne of product was worse, at $1,178 a tonne compared to $2,255 for the same period in 2012.
The mineral sands market began to deteriorate in late 2011 after Iluka had enjoyed record profits and been the top share market performer among the largest 100 stocks.
It responded by dramatically cutting production by almost two thirds and its costs, also costing hundreds of mostly Australian jobs.
Production in the first half was 46 per cent down on last year.
Iluka is the world's largest mineral sands player along with Rio Tinto, and the latter's failure to also cut production and hold the line on prices had contributed to the plunge in prices, said Morningstar analyst Matthew Hodge.
"I think some of the things were out of their control like Rio's behaviour, which was really quite irrational," he told AAP.
He said Iluka had improved how prices were reached at in the industry and when the market tightened again it was well positioned to increase prices.
The share price rise indicated that the market believed the mineral sands industry was set to rise, he said.