Cost Bottoming, Operating Rates Sluggish, Bullish Expectations for Aluminum Fluoride Market Heat Up [SMM Fluoride Salt Weekly Review]

SMM July 30:

This week, aluminum fluoride enterprises mainly delivered orders. As month-end approached, the market awaited new pricing guidance, and trading was sluggish with stable prices. As of now, SMM mainstream aluminum fluoride quotations were 10,950-11,400 yuan/mt; cryolite saw rigid demand recover marginally in China and overseas, and combined with raw material cost support, spot prices edged up, with SMM cryolite quotations at 7,500-9,000 yuan/mt.

Raw material side: This week, aluminum fluoride raw material prices diverged. The upstream 97% fluorite wet powder market consolidated on a strong note, with mainstream delivered prices at 3,200-3,650 yuan/mt. Supply side, China’s mining safety supervision intensified, mining standardization controls were implemented, and mine technological transformation cycles were extended, constraining the release of effective industry capacity over the long term. During the week, downstream hydrofluoric acid enterprises saw new order prices for August shift higher, driving factories to restock on rigid demand. Aluminum enterprises’ stable consumption provided a floor, and supply-demand fundamentals provided strong support, keeping fluorite prices on a stable upward trend. Other raw materials side, China’s aluminum hydroxide market drifted lower, with a weighted average price of 1,680 yuan/mt, down 0.41% WoW; the sulphuric acid market softened from highs, with the transaction center shifting lower steadily. After offsetting raw material gains and losses, aluminum fluoride’s overall production costs remained high.

Supply side, the industry continued to be trapped in a negative cycle of high costs, losses on production, and low operating rates. Rising fluorite prices further exacerbated enterprises’ losses, and the scope of industry losses continued to expand. Most enterprises increased equipment maintenance and flexible production cuts, causing the overall operating rate to continue declining. Currently, enterprises in the market mostly adopted a contractionary operating strategy, prioritizing the delivery of long-term contract orders. Market effective supply growth was constrained, and spot supply was tight overall. Demand side, the downstream aluminum industry’s operating capacity stayed high, providing rigid demand support for aluminum fluoride and propping up the market bottom. However, aluminum smelters’ overall procurement attitude was cautious and conservative, mainly limited to sporadic restocking for rigid demand. A strong push for lower prices and wait-and-see sentiment prevailed, with no concentrated restocking or incremental procurement, making it difficult to drive market prices up.

Brief Review: This week, aluminum fluoride raw material trends continued to diverge. Fluorite strongly raised the cost floor, while aluminum hydroxide and sulphuric acid pulled back slightly, offsetting part of the pressure. Overall industry costs stayed high, making it hard to restore profitability, and production enthusiasm remained weak. Currently, rigid cost-side support combined with low industry operating rates has clearly heated up overall bullish expectations. Going forward, focus on tracking the cost fluctuation trends of raw materials like fluorite and the marginal changes in procurement pace at downstream aluminum enterprises.