Month-end Awaiting New Price Guidance, Aluminum Fluoride Market Stable with Wait-and-See Attitude [SMM Fluoride Salt Weekly Review]

SMM February 26:

This week, aluminum fluoride enterprises focused on fulfilling orders. Approaching month-end, the market awaited new price guidance, resulting in sluggish trading activity and stable prices. To date, SMM aluminum fluoride prices closed at 10,480-10,750 yuan/mt; cryolite prices remained largely stable, with SMM cryolite quotes at 7,000-9,000 yuan/mt.

Raw material side: Prices of core raw materials for aluminum fluoride were largely stable. Specifically, delivery-to-factory prices for 97% fluorite powder held steady, currently concentrated in the range of 3,100-3,400 yuan/mt. Supply side, production halts in north China due to low temperatures and the Chinese New Year holiday reduced market supply. Coupled with routine environmental and safety supervision, small and medium-sized mines experienced unstable operations. Imports were mainly medium and low-grade, with limited high-grade supply, prolonging structural tightness. Although supply contracted, high inventory in some regions and sluggish shipments exerted some downward pressure on prices. Demand side remained weak, with core downstream hydrofluoric acid industry operating at low rates, resulting in weak digestion of fluorite powder and lack of strong momentum. Current market transactions were sluggish, and prices saw no major adjustments. Aluminum hydroxide prices held steady, with the SMM weighted average price at 1,611 yuan/mt, flat MoM. The sulfuric acid market continued to fluctuate at highs, providing some cost support for aluminum fluoride. Overall, rigid cost support for aluminum fluoride raw materials remained.

Supply-demand side: In terms of supply, some previously idled enterprises in the domestic aluminum fluoride industry gradually prepared to resume production after the holiday, raising expectations for supply recovery. However, some enterprises conducted planned maintenance, and high costs constrained production enthusiasm. Industry-wide operating rates remained in the doldrums, with relatively ample spot supply in the market. Demand side, operating capacity in the downstream aluminum industry stayed stable, providing rigid support for aluminum fluoride demand. Post-holiday, downstream enterprises gradually resumed procurement pace, and market activity recovered. However, cautious procurement sentiment led enterprises to restock as needed and maintain low inventory, resulting in limited actual purchases and insufficient support for aluminum fluoride price increases.

Brief comment: Current stable trends in raw material prices such as fluorite and sulfuric acid provided strong bottom support for aluminum fluoride prices. Supply side, ample spot supply and post-holiday production resumptions were expected to increase supply further. Demand side, only rigid restocking from the aluminum industry drove a slight rebound, lacking significant boosts. Considering multiple factors, SMM expected aluminum fluoride prices to fluctuate rangebound in the short term. Future monitoring should focus on dynamic changes in raw material costs and marginal adjustments in procurement pace of downstream aluminum enterprises.