Aluminum Fluoride Prices Rise on Cost Support; Premium for High-Grade Supply Widens [SMM Fluoride Salt Weekly Review]

SMM, September 10:

This week, trading sentiment in China's aluminum fluoride enterprises was moderate, and aluminum fluoride prices continued to rise. As of now, SMM mainstream quotations for aluminum fluoride stand at 11,500-12,300 yuan/mt; cryolite spot prices firmed, with SMM cryolite quotations at 8,000-9,000 yuan/mt.

Raw material side: This week, aluminum fluoride raw material prices diverged. The upstream 97% fluorite wet powder market edged up, with mainstream delivered prices at 3,350-3,850 yuan/mt. Supply side, mine safety inspections remained intense: Inner Mongolia implemented the "Double Ten" inspections, Zhejiang's small mine closure policy took effect, compliance checks continued in Jiangxi and Fujian, mine production resumptions were delayed, fluorite inventory stayed low, spot supply was tight, and cargo was prioritized for long-term contracts; Mongolian imports rebounded somewhat, only slightly easing supply pressure in the north. Demand side showed clear divergence: hydrofluoric acid supply contracted, September long-term contract prices were raised to above 15,000 yuan/mt, driving some restocking demand; refrigerants were constrained by quotas, lithium battery fluorochemical demand was weak, and downstream purchase willingness for high-priced fluorite was cautious, with buying largely on an as-needed basis. Overall, rigid constraints at the mine end underpinned the cost floor, but downstream lacked concentrated stockpiling drivers, and fluorite is expected to consolidate at high levels with a slight upward bias in the short term. For other raw materials, China's aluminum hydroxide market was largely stable, with SMM weighted average price at 1,650 yuan/mt, unchanged WoW; the sulphuric acid market continued to ease from previous highs, with transaction centers extending a slight downward trend. Overall raw material prices were mixed, and some price pullbacks partially offset cost pressure, but with fluorite staying high, comprehensive production costs for aluminum fluoride remained elevated.

Supply side: The industry remained in a weak cycle of high costs, production losses, and low operating rates. High fluorite prices continued to underpin aluminum fluoride production costs, making it difficult to repair industry profitability. Most enterprises stepped up equipment maintenance and flexible production cuts, keeping the overall industry operating rate low. At this stage, enterprises generally adopted a contractionary operating strategy, prioritizing long-term contract deliveries, with limited new effective supply and overall tight spot cargo. Demand side: Downstream aluminum industry operating capacity stayed high, creating sustained rigid demand for aluminum fluoride and providing bottom support for market prices.

SMM Commentary: This week, aluminum fluoride raw material trends diverged: fluorite prices remained firm at high levels, providing strong cost support; sulphuric acid prices pulled back slightly, partially offsetting cost pressure, but comprehensive production costs in the industry remained high, profitability was narrow, production enthusiasm was insufficient, industry operating loads were low, and supply was generally tight. Demand side, aluminum enterprises maintained high-load operations, creating rigid support for aluminum fluoride consumption, but purchasing lacked elasticity, there were no concentrated restocking positives in the market, and spot price upside momentum was limited. SMM also learned that high-grade aluminum fluoride prices, supported by costs, rose to around 12,400-12,800 yuan/mt during the week. Overall, the current aluminum fluoride market shows a pattern of "cost support, tight supply, and inelastic demand," with future focus on fluorite raw material price fluctuations and the pace of restocking by aluminum enterprises.