Iluka Resources Ltd, the world's biggest zircon producer, may increase output as demand recovers in China and the US.

"It will be a progressive response to a progressive return in demand," CEO David Robb said on Wednesday. "It's not like all of a sudden the light switch goes on and we go back to running flat-out."

Iluka, based in Perth, Australia, expects demand to improve as consumers rebuild stocks in China and US residential construction picks up. Sales in the US and Europe this year are forecast to exceed those in 2012, while China demand in 2013 is almost equal to last year's, Robb said at the company's annual general meeting on Wednesday.