During the February cycle (February 6 to March 6), despite the increased support from raw material costs, aluminum fluoride prices still experienced a significant decline due to the impact of previous price drops and the continued weakness in downstream demand. As of now, SMM aluminum fluoride prices closed at 9,900-10,600 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 is currently concentrated at 3,500-3,800 yuan/mt. During the cycle, fluorite prices mainly increased slightly. Although overall market fluctuations were relatively small, the continued low operating rates of miners and beneficiation plants, coupled with the impact of environmental protection policies and the upcoming Two Sessions, imposed certain constraints on supply, limiting fluorite availability. Additionally, with a slight rebound in downstream hydrogen fluoride enterprises, SMM expects fluorite powder prices to rise in March. Currently, SMM records the average delivery-to-factory price of 97% fluorite powder at 3,625 yuan/mt, up 0.22% from February 6. Moreover, SMM reports that the prices of other raw materials for aluminum fluoride, such as aluminum hydroxide, hit bottom during the cycle and rebounded slightly. Currently, SMM records the ex-factory average price of aluminum hydroxide at 2,185 yuan/mt, down 12.07% from February 6. During the cycle, aluminum fluoride costs remained in a downward phase.
Supply side, due to insufficient market confidence in the earlier period, the overall operating rate of enterprises was relatively low. Under the dual pressure of high costs and low-price market competition, enterprises operated cautiously. However, with rising raw material prices and gradually easing market sentiment, some enterprises are expected to increase production enthusiasm, leading to a rebound in operating rates. Entering March, according to SMM, with the convening of the Two Sessions, some enterprises have formulated production cut plans to ensure long-term contract supply, indicating a potential reduction in aluminum fluoride supply. Demand side, although operating capacity for aluminum has increased slightly, downstream enterprises mainly purchase as needed. Despite certain growth potential in demand, the weak market pattern is expected to persist in the short term.
Brief Comment: During the cycle, raw material costs continued to ease, and transaction activity among aluminum fluoride enterprises remained relatively subdued, with enterprises primarily focused on fulfilling orders. Market activity was low, and domestic aluminum fluoride market prices continued to decline. With the gradual determination of tender prices in the aluminum industry, the benchmark aluminum tender price for March dropped significantly to 9,900-9,950 yuan/mt. Entering March, prices of raw materials such as fluorite powder, sulphuric acid, and aluminum hydroxide have risen or shown an upward trend, which may provide some support for aluminum fluoride prices. In the short term, the aluminum fluoride market is expected to recover slightly due to the rebound in raw material costs. However, it is worth noting that the long-term trend remains weak, especially given the significant decline in aluminum hydroxide costs in the earlier period and the lack of growth momentum in downstream demand, which may limit the strength of the market rebound.
