November Benchmark Enterprise Tenders Hold Steady, Market Order Signing Stable with Slight Uptick [SMM Fluoride Salt Weekly Review]

SMM, November 5:

This week, benchmark downstream enterprises finalised aluminum fluoride tender prices, with aluminum fluoride prices largely stable and edging up. As of now, SMM mainstream quotations for aluminum fluoride stand at 12,800-13,200 yuan/mt; cryolite spot prices remained stable, with SMM cryolite quotations at 8,300-9,000 yuan/mt.

Raw materials: This week, aluminum fluoride raw material prices diverged. Upstream 97% fluorite wet powder market was largely stable, with high-end ranges in stalemate, and mainstream delivered prices at 3,350-3,850 yuan/mt. Supply remained tight, with environmental protection and safety inspections in main producing areas becoming routine, mine and beneficiation plant operating rates staying low, and some enterprises still in rectification, limiting production resumption growth. Although Mongolian imported cargo provided some supplement to the northern market, arrival growth fell short of expectations, and miners' overall inventory remained low, making the tight supply situation difficult to reverse in the short term. On the demand side, hydrofluoric acid showed a north-south divergence due to sulphuric acid production cuts. Tight supply in south China drove November long-term contract prices higher, while northern producers, despite willingness to hold prices firm, lacked upward momentum. Refrigerants entered the traditional off-season, and combined with quota constraints, operating rates continued to pull back, with strong expectations for November production cuts and weak purchase willingness. The lithium battery industry chain showed no demand recovery, and downstream enterprises had limited acceptance of high-priced fluorite, mostly maintaining hand-to-mouth purchasing and low inventory operations. Fluorite market shifted from earlier price surges to high-level bargaining and consolidation. For other raw materials, China's aluminum hydroxide market was narrowly weak, with SMM weighted average price at 1,628 yuan/mt, down 0.25% from last Thursday; the sulphuric acid market consolidated on a subdued note with regional divergence persisting. Maintenance at southern plants provided phased support for local supply, but low-priced smelting acid from other regions still posed cross-regional impact risks. Downstream phosphate fertiliser winter stockpiling started slowly, and chemical demand such as titanium dioxide showed little improvement. Combined with loosening sulphur prices, cost support for sulphur-based acid weakened. Next week, the market is expected to consolidate on a weak note, with enterprises strengthening production control willingness amid sustained losses in sulphur-based acid, limiting further downside. Overall raw material prices declined steadily, and the price pullback led to a slight decline in aluminum fluoride comprehensive production costs, though they remained high.

Supply side: The October long-term contract price increase alleviated enterprise profitability to some extent, and combined with aluminum hydroxide and sulphuric acid price pullbacks bringing slight profit recovery, the market showed a clear recovery trend, with marginal improvement in enterprise operating willingness. Enterprises in the market still focused on ensuring long-term contract deliveries, with spot supply remaining tight. Demand side: High operating aluminum capacity provided rigid support. After October inventory consumption, aluminum smelters released procurement demand, and phased procurement volume increases combined with slight boosts from the export market drove overall market demand improvement at the margin.

Commentary: This week, aluminum fluoride raw material trends were under pressure, with fluorite fluctuating at highs, aluminum hydroxide and sulphuric acid weakening, and comprehensive costs pulling back slightly but remaining high. On the supply side, enterprise operating willingness improved marginally with profit recovery, but overall operating rates remained low, and market supply remained tight. On the demand side, downstream aluminum smelters' raw material inventories continued to deplete, and restocking procurement demand picked up. Overall, supported by rigid raw material constraints from mine safety inspections and winter production cut expectations, combined with the industry's overall low inventory and low operating rates creating tight spot supply, as well as continued aluminum smelter winter stockpiling, aluminum fluoride price support remains intact in November. According to SMM tracking, downstream enterprises showed strong intentions to push for lower prices in November. After multiple rounds of negotiations, benchmark enterprise tender prices remained largely stable, but enterprise spot order prices edged up slightly overall, and AF-1 high-grade aluminum fluoride prices also rose, currently around 13,300 yuan/mt. Going forward, focus on fluorite raw material price fluctuations and aluminum enterprise restocking pace.