Lower-Cost Electrolyte Weighs Down Cryolite Prices

SHANGHAI, Feb. 25 (SMM) – SMM’s survey found that cryolite prices remained depressing following the Chinese New Year.

Domestic cryolite prices varied greatly, ranging from RMB 5,500/mt to RMB 6,300/mt. Low-end cryolite is made from cheaper raw materials such as sodium fluorosilicate, while cryolite made from fluorite is sold at higher prices of RMB 6,300/mt.     

SMM believes severe overcapacity, unbalanced supply and demand and intensifying competition are the major reasons behind sluggish cryolite prices. Producers told SMM that aluminum electrolyte had been nibbling away at cryolite’s market share in 2012, resulting in price declines and decreasing capacity in cryolite. Cryolite used to be widely used by aluminum smelters as flux, while newly-discovered low molecule ratio electrolyte can be used as a substitute for cryolite and reduce aluminum production costs.       

Yankuang Keao Aluminum started up electrolysis cells by replacing cryolite with electrolyte block as early as 2012. This technology has become increasingly popular at domestic aluminum smelters and companies selling electrolyte blocks are springing up. Confronted with continually falling aluminum prices and heavy losses, aluminum smelters have put cost control as their top priority. Against this backdrop, cryolite prices are falling steadily and its market share is being squeezed.