SMM, June 11:
This week, transaction sentiment in China's aluminum fluoride enterprise sector was moderate, and aluminum fluoride prices remained stable. As of now, SMM aluminum fluoride prices closed at 11,280-11,700 yuan/mt; cryolite prices were stable, with SMM quotations at 7,000-8,500 yuan/mt.
Raw material side: This week, China's 97% fluorite wet powder market was steady, with mainstream delivery-to-factory prices at 3,100-3,400 yuan/mt and notable regional price spreads. Supply side, mine operations in the north continued to recover, and domestic spot supply increased steadily; imported cargoes from Mongolia arrived at ports gradually, further easing the supply surplus. However, recent coal mine accidents in Shanxi triggered market expectations of stricter mine safety and environmental protection supervision, which may cause periodic disruptions to some mine production subsequently, maintaining a wait-and-see sentiment on the supply side. Demand side remained persistently weak, as downstream hydrofluoric acid enterprises were dragged by insufficient terminal operating rates for refrigerants and fluoropolymers, resulting in primarily just-in-time procurement with limited large orders. Affected by weak raw materials and insufficient end-use demand, the price center for hydrofluoric acid shifted downwards, weakening support for fluorite. Overall, the domestic supply recovery, replenishment of low-priced imports, and sluggish downstream demand combined as multiple bearish factors, resulting in a loose supply-demand pattern, and short-term fluorite prices are likely to remain under slight downward pressure. This week, China's aluminum hydroxide market held up slightly, with the SMM weighted average price for aluminum hydroxide at 1,663 yuan/mt, edging up 0.4% MoM. Upstream costs underpinned spot offers, while downstream purchases were made as needed, limiting volume growth. This week, China's sulphuric acid market was in a stalemate at highs and moved sideways. Sulphur prices surged again, continuously strengthening bottom-level cost support; losses at sulphuric acid plants led to production cuts, and combined with ongoing maintenance at many acid plants, regional spot supply was differentiated and tight. Although the phosphate fertiliser industry was mired in losses and off-season procurement remained restrained, capping upside room, just-in-time procurement from the new energy LFP sector and base-level purchases from some chemical enterprises provided a floor. In the short term, the sulphuric acid market is consolidating at highs, stuck between upward and downward pressures. Overall, raw material markets for aluminum fluoride diverged this week, with rising aluminum hydroxide and sulphuric acid prices pushing the industry's overall cost center higher. Cost increases from raw materials were difficult to pass downstream smoothly, intensifying cost pressure on enterprise production.
Supply side, the operational pattern of "rigid high costs—persistent profit pressure—low operating rates" continued. With sulphuric acid and aluminum hydroxide prices rising this week, the industry was generally in a state of losses, leading to more maintenance and flexible production at enterprises. The industry operating rate remained low at around 40%, with limited effective incremental supply. Demand side, downstream operating aluminum capacity stayed high and stable, forming rigid floor demand for aluminum fluoride, but aluminum smelters' procurement focused on just-in-time restocking and pushing for lower prices with a wait-and-see approach, with no additional incremental demand.
Commentary: This week, raw material markets for aluminum fluoride showed mixed performance. Stronger aluminum hydroxide and sulphuric acid prices further pushed up overall costs, continuously squeezing enterprise operating profits. The industry maintained a "triple pressure" structure of high costs, low profits, and low operating rates, making it difficult to boost production enthusiasm. The market currently lacks a directional driver, with the tug-of-war between upstream and downstream causing a stalemate. Transactions were limited to just-in-time procurement. In the short term, aluminum fluoride prices are likely to remain stable, with limited room for wild swings. Close attention should be paid to subsequent developments in raw material cost dynamics and marginal adjustments in the procurement pace of downstream aluminum enterprises.
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