Aluminum fluoride prices came under pressure in February, influenced by earlier cost easing and weak supply-demand dynamics. The SMM aluminum fluoride price closed at 10,480-10,750 yuan/mt during the month. The cryolite market remained stable overall, with SMM cryolite offers holding steady at 7,000-9,000 yuan/mt.
On the raw material side, fluorite prices saw a slight increase early in February before stabilizing. Supply was constrained by the Chinese New Year holiday, low temperatures in northern regions, and regular safety and environmental inspections, leading to low operating rates at mines and beneficiation plants, with slow post-holiday resumptions at many enterprises. Overall, fluorite market supply showed seasonal tightening. Demand was sluggish, with key downstream hydrofluoric acid producers purchasing fluorite mainly for essential needs and as needed, showing low acceptance of high prices. The refrigerant industry was in its traditional stockpiling period, but high prices dampened restocking pace, resulting in sluggish transactions. Thus, fluorite market demand was mediocre overall, with cautious procurement sentiment and mostly essential needs. The market remained in a weak supply-demand balance, making rapid price increases unlikely in the short term. According to SMM data, as of February 27, the average delivery-to-factory price for SMM 97% fluorite powder reached 3,275 yuan/mt, up 0.52% from January 30. As another key raw material for aluminum fluoride, the aluminum hydroxide market saw relatively small fluctuations, with the SMM average ex-works price for aluminum hydroxide at 1,615 yuan/mt as of February 27, up 0.25% from January 30. Additionally, the sulfuric acid market continued to fluctuate at highs due to tightening supply and strong cost support. Overall, raw material market volatility was relatively small, with rigid costs for aluminum fluoride raw materials still providing support for aluminum fluoride prices.
Supply side, high raw material prices posed production pressure for enterprises, leading to weak overall operating enthusiasm. Strict environmental and energy consumption policies, dual constraints of raw material costs and profit margins, and maintenance-related production cuts at some firms contributed to a decline in overall operating rates. However, due to earlier inventory accumulation and gradual post-holiday production resumptions at some enterprises, spot market availability remained relatively ample. Demand side, new aluminum projects steadily ramping up provided solid rigid demand support for aluminum fluoride, but enterprises maintained cautious purchasing attitudes, primarily restocking as needed.
Commentary: Currently, fluorite and sulfuric acid prices are stable, providing strong bottom support for aluminum fluoride prices. Supply side, spot market supply is ample, coupled with expectations of gradual production resumptions after the holiday, future supply is expected to continue increasing; demand side, only relying on rigid restocking demand from the aluminum industry to drive a slight rebound, lacking significant positive boosts. Overall, cost support remains, but has not yet formed strong upward momentum, combined with aluminum enterprises' strong push for lower prices, aluminum fluoride prices in March are expected to be mainly stable with a slight weakening trend.
