SMM, January 9:
This week, downstream benchmark enterprises finalized their bidding prices. Affected by loosened raw material costs and weak demand, aluminum fluoride prices saw a significant decline. As of now, SMM aluminum fluoride prices closed at 11,200-12,500 yuan/mt, while SMM cryolite prices were quoted at 6,500-7,200 yuan/mt.
On the raw material side, for fluorite, the delivery-to-factory price of 97% fluorite powder for aluminum fluoride enterprises mainly ranged from 3,450 to 3,800 yuan/mt. Fluorite prices remained largely stable during the week. Since the beginning of the year, the fluorite industry has been continuously affected by policies and other factors, leading to insufficient operating rates at mines and a supply deficit of fluorite raw materials. Additionally, with the arrival of winter, fluorite powder production in north China has declined, further exacerbating the tight supply. On the demand side, downstream enterprises showed mediocre purchasing enthusiasm, and market transactions were lackluster. SMM expects a weakening trend for 97% fluorite powder. Currently, SMM recorded the average delivery-to-factory price of 97% fluorite powder at 3,592 yuan/mt, largely stable MoM. Moreover, SMM learned that the price of aluminum hydroxide, another raw material for aluminum fluoride, continued to decline due to weakened raw material support. Currently, SMM recorded the ex-factory average price of aluminum hydroxide at 3,531 yuan/mt, down 1.51% MoM. The loosening of raw material prices on the cost side has weakened support for aluminum fluoride.
From the supply perspective, aluminum fluoride prices for the new monthly period experienced a significant decline during the week, which has notably worsened the profitability of enterprises, with some even turning to losses. Meanwhile, as raw material prices had loosened earlier, enterprises' finished product inventory levels increased, prompting some to opt for production halts and maintenance to consume excess inventory. As a result, the supply side of aluminum fluoride slightly declined. On the demand side, although aluminum enterprises maintained stable production, most had already completed their restocking efforts, with current purchases mainly driven by rigid demand. Under such circumstances, overall demand faced certain downward pressure.
Brief Comment: Despite the continuous decline in the raw material market recently, aluminum fluoride transaction prices have dropped significantly, raising concerns about the profitability of many enterprises. The sharp decline in aluminum fluoride prices for the new monthly period has led some enterprises to halt production for maintenance, thereby tightening market supply to some extent. Currently, the aluminum fluoride market faces dual pressures from both supply and demand. Future market trends require close attention to enterprise production dynamics and inventory changes.
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