SMM, February 6:
Recently, aluminum fluoride enterprises have primarily focused on fulfilling orders, with transactions remaining sluggish. Aluminum fluoride prices have remained stable, with SMM aluminum fluoride prices currently closed at 11,200-12,500 yuan/mt, and SMM cryolite prices at 6,500-7,200 yuan/mt.
Raw material side, the fluorite market has risen slightly, with the delivery-to-factory price of 97% fluorite powder required by aluminum fluoride enterprises remaining at 3,450-3,800 yuan/mt. Before the holiday, due to a slight increase in downstream hydrogen fluoride prices and tight fluorite supply, fluorite prices are expected to rise. According to SMM data, the average delivery-to-factory price of 97% fluorite powder is 3,617 yuan/mt, up 0.7% from the Thursday before the holiday. Meanwhile, the price of another raw material, aluminum hydroxide, has continued to decline due to weaker raw material support. SMM recorded the ex-factory average price of aluminum hydroxide at 2,485 yuan/mt, down 18.92% MoM. This situation has softened the cost side of aluminum fluoride prices, weakening the overall price support for aluminum fluoride.
Supply side, last month's significant decline in aluminum fluoride prices severely impacted the profitability of many enterprises, with some experiencing sharp declines in profitability or even turning to losses. The approaching Chinese New Year holiday further complicated the market. To reduce operating costs and minimize potential losses, some enterprises opted to suspend production for maintenance, directly reducing market supply. Additionally, current transaction activity among aluminum fluoride enterprises remains sluggish, with most efforts focused on fulfilling previous orders, leading to a noticeable lack of market activity. At this stage, aluminum fluoride enterprises are closely observing the tender prices of downstream benchmark enterprises to gain insights into market price trends and adjust their production and sales strategies accordingly. Demand side, while aluminum production remains stable, most enterprises have already replenished their inventories, leading to weaker procurement demand for aluminum fluoride and relatively sluggish overall market demand.
Brief Comment: Recently, the raw material market for aluminum fluoride has shown some divergence. Fluorite powder, constrained by limited supply and a recovering end-use market, is expected to rise, while aluminum hydroxide prices have continued to decline due to the ongoing drop in alumina prices. This differentiated cost fluctuation further impacts the profit margins and production decisions of aluminum fluoride enterprises. Supply-demand relationship, with the end of the Chinese New Year holiday, enterprise production and operations are expected to gradually recover, potentially restoring supply. However, if there are no new growth drivers on the demand side, the supply-demand imbalance may persist for some time. Overall, SMM expects aluminum fluoride prices to show a weakening trend.
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