Shares of mineral sands producer Iluka Resources Limited (ASX: ILU) have edged higher today following the release of its quarterly production update.

Although total mineral sands production for the quarter was down year over year, the company’s production levels are still up 5.6% year to date thanks to a strong showing in the first quarter.

Unfortunately the same cannot be said for its sales however. The company reported that total mineral sands sales year to date are down 23.3% to $334.1 million, from $435.4 million in the prior corresponding period.

This was largely the result of an incredible drop in sales for ilmenite. For the first two quarters of FY 2015 the company produced 195.1kt of ilmenite with sales of $159.5 million. In 2016 production may have dropped around 16% to 164.1kt and sales dropped by almost 90% to just $17.7 million as demand evaporated.

It wasn’t all bad news though for shareholders. Unit revenue per tonne of zircon, rutile, and synthetic rutile may have come in 10.2% lower at A$1,015, but Iluka’s unit cash cost per tonne of zircon, rutile, and synthetic rutile production decreased by 34.7% to $402 per tonne.

Iluka’s management has advised that it has seen encouraging trends in terms of demand for high grade feedstock, including several customers bringing forward contracted volume. It believes this is a positive indicator in terms of the potential for additional volumes in the second half, as well as in terms of conditions leading into 2017.

Whilst management paints a better picture for the second half of the year and 2017, I personally remain cautious on its future. Demand for mineral sands is hard to predict, especially with China’s economic growth looking as though it is slowing.

Instead of an investment in Iluka I believe investors would be better off focusing on other S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) shares in more predictable industries such as Retail Food Group Limited (ASX: RFG) and even Telstra Corporation Ltd (ASX: TLS). Both of these shares look to be great value at present and provide a strong dividend.

Alternatively, these are three fantastic blue chip shares which I believe would make a great addition to most portfolios. Each provides a solid fully franked dividend and could climb higher in the next few months.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.