Property price falls in China could benefit mineral sands miner Iluka Resources as it continues to cut production.
Managing director David Robb said investment in Chinese real estate and construction was important in the long-term, but the focus in the near-term would be on housing completions and housing sales.
"I can think of a scenario where price corrections incentivise developers to offer better deals to get occupants into their properties and make it easier for people to become home owners," Mr Robb said.
"That would be good for us."
Iluka's mineral sands products, including zircon, rutile and synthetic rutile, are used in a range of products, including home building products, from pigment production for paints and plastics, floor and wall tiles and chemicals.
Mr Robb's comments come after home prices fell in 64 of 70 surveyed cities in China in July, the third straight month of declines.
Iluka blamed lower product prices for a 66 per cent fall in first half net profit to $11.7 million.
The company said it will continue cutting production until conditions improve.
The fall in profit reflected a 13.8 per cent fall in prices and 3.5 per cent fall in sales.
Despite difficult trading conditions, Iluka says the zircon and titanium dioxide markets it serves are improving and the company is looking at future growth options.
Iluka also increased its dividend to six cents a share fully franked, from five cents in 2013.
Shares in the company rose 29 cents, or 3.4 per cent, to $8.88 at 1456 AEST due to the positive outlook and increased dividend on Friday.
Morningstar Resources analyst Mathew Hodge said Iluka had been suffering for several years as it continued to operate near the bottom of the cycle.
"The price is too low, you've got potential for improvement in demand in the short to medium term and if things don't improve new mines won't be built so supply would remain tight," Mr Hodge said.
The company's shares had risen on signs of improved demand for titanium minerals and rutile while zircon looked pretty stable.
He said the company benefited once people had moved into their homes.
Mr Hodge added that the company had maintained a solid balance sheet, kept costs down and paid a dividend while trying to develop options.
ILUKA CONTINUES TO CUT PRODUCTION
* Half year net profit of $11.7m, down 66 pct from $34.3m in previous period
* Revenue of $343.2m, down 10.1 pct from $381.7m
* Interim dividend of 6.0 cents a share, up from 5 cents full franked
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