Trading was stable at month-end, aluminum fluoride enterprises refused to budge on prices, awaiting guidance from the new round of tender prices [SMM Aluminum Fluoride Salts Weekly Review]

SMM News, May 29:

This week, aluminum fluoride producers mainly focused on order deliveries, with mediocre market transactions and stable prices. As of now, SMM aluminum fluoride prices closed at 9,800-10,100 yuan/mt, while SMM cryolite prices were quoted at 7,500-9,000 yuan/mt.

Raw material supply showed a divergent trend. The fluorite market remained sluggish, with increasing supply-side pressure. As northern producers gradually resumed production amid rising temperatures and a surge in low-priced imported goods, supply grew significantly YoY. However, mining restrictions and low inventory provided support, resulting in a fierce tug-of-war between sellers and buyers. Demand side, end-use consumption remained weak, with downstream enterprises adopting a wait-and-see approach and aggressive price negotiations, leading to sluggish market transactions. Fluorite prices are expected to continue weakening. As of now, the average delivery-to-factory price for 97% fluorite powder stood at 3,533 yuan/mt, remaining stable WoW. In contrast, aluminum hydroxide prices extended their upward trend driven by rising alumina prices, with the average ex-works price reaching 2,108 yuan/mt, up 7.66% WoW. Sulphuric acid prices maintained high-level adjustments. Overall, aluminum fluoride production costs showed an upward trend.

Supply side, affected by declining aluminum fluoride prices, producers' profit margins shrank significantly, leading to markedly reduced operating enthusiasm and persistently low capacity utilisation rates. Supply remained sales-oriented, with cautious production schedules, making it difficult to achieve supply growth in the short term. The market is expected to maintain low-level stability for an extended period. Demand side, despite regional adjustments such as the relocation of Shandong's aluminum capacity, national total capacity remained stable, failing to substantially boost aluminum fluoride demand. Downstream enterprises adopted just-in-time procurement strategies due to cost control and market sentiment, resulting in stagnant demand and a market deadlock of weak supply and demand.

Brief comment: The aluminum fluoride market continued to exhibit weak supply and demand, with relatively stable prices this week. Cost side, rising aluminum hydroxide prices pushed up production costs; supply side maintained conservative production schedules due to profit compression; demand side saw just-in-time procurement in the aluminum industry, with the overall market lacking growth momentum. Near month-end, trading sentiment remained steady, with new tenders imminent. Supported by rising costs, aluminum fluoride producers showed strong reluctance to budge on prices, awaiting fresh price direction guidance.