Cost Pressure Continues to Be Transmitted, Support Below Aluminum Fluoride Prices Strengthens [SMM Fluoride Salt Weekly Review]

SMM, June 25:

This week, aluminum fluoride enterprises focused on delivering orders. Approaching month-end, the market awaited new price guidance. Trading sentiment was sluggish, and prices remained stable. As of now, SMM aluminum fluoride prices closed at 11,280-11,700 yuan/mt; cryolite prices held steady, with SMM quoting 7,000-8,500 yuan/mt.

Raw material side: China’s 97% wet-process fluorite market was generally stable this week, with mainstream delivered prices at 3,100-3,400 yuan/mt and regional price differences persisting. On the supply side, high-grade resources remained tight due to safety and environmental protection inspections and production restrictions at small mines. This was compounded by a slowdown in imports from Mongolia and limited spot circulation, keeping inventories low and strengthening miners' willingness to hold prices firm. Demand side showed clear divergence. Traditional refrigerants were in the off-season, with losses at hydrofluoric acid firms suppressing purchases, which remained predominantly need-based and under long-term contracts. However, demand for lithium battery electrolytes and electronic-grade hydrofluoric acid was stable, providing support for high-quality fluorite. Overall, the supply tightness is unlikely to ease in the short term, and incremental imports are limited, with prices most likely holding up well. Nonetheless, downstream appetite to chase higher prices was insufficient, capping any gains. China’s aluminum hydroxide market edged up within a narrow range this week; the SMM weighted average aluminum hydroxide price was 1,698 yuan/mt, a slight increase of 0.89% WoW. Upstream cost support kept spot quotations firm, while downstream purchases were only as needed on a need-to basis, limiting overall transaction volume growth. The sulphuric acid market moved sideways at high levels, with price changes difficult in either direction. Low upstream sulphur spot inventory further consolidated the cost floor; combined with acid producers cutting production due to losses and clustered maintenance shutdowns across regions, supply in certain areas became relatively tight. However, the phosphate fertilizer sector entering its off-season and subdued purchase willingness capped sharp price increases for acid, while steady demand from the LFP new energy sector and fine chemicals provided bottom support. Synthesizing raw material-side performance this week, the fluorite market remained stable, while aluminum hydroxide and sulphuric acid rose, with divergent raw material price trends pushing up the comprehensive production cost of aluminum fluoride.

The supply side continued operating under a pattern of persistently rigid high costs, sustained profit pressure, and low operating rates. Synchronized strength in sulphuric acid and aluminum hydroxide this week drove up overall production costs, pushing the industry into widespread losses. Incidents of enterprise maintenance shutdowns and flexible production cuts increased, with the industry operating rate holding at a low level of around 40%, limiting the incremental supply of effective spot cargo. On the demand side, the operating aluminum capacity downstream remained high and stable, providing a rigid support floor for aluminum fluoride demand. However, aluminum smelters only purchased as needed for rigid demand restocking, while simultaneously pushing for lower prices and standing by, with no release of additional incremental procurement.

Summary: There was no significant directional catalyst in the aluminum fluoride market this week. The firm cost side continued to support prices, and the industry remained in a state of high costs, low profits, and low operating rates. In the short term, upstream raw material prices remain the core factor influencing the market, with limited downstream demand growth, and the market is likely to continue the tug-of-war between upstream and downstream. Next month, aluminum fluoride prices are expected to have strong downside support and some upside elasticity. However, constrained by the procurement pace of end-users, the room for price increases will still hinge on raw material costs and procurement changes at aluminum enterprises.