Aluminum Fluoride Tender Price Set at New Low, Weak Market Situation Hard to Change in Short Term [SMM Fluorspar Weekly Review]

SMM March 6 News: This week, the tender prices of downstream benchmark companies were finalized. Despite the recent increase in support from raw material costs, it remains difficult to offset the impact of previous price declines. Coupled with persistently weak downstream demand, aluminum fluoride prices saw a significant decrease. As of now, SMM aluminum fluoride prices closed at 9,900-10,600 yuan/mt, and SMM cryolite prices were quoted at 6,500-7,200 yuan/mt. From the perspective of raw material supply, the overall fluorspar market this week showed a stable and slightly upward trend. The delivery-to-factory price of 97% fluorspar powder, a key raw material for aluminum fluoride production, remained stable within the 3,500-3,800 yuan/mt range. In north China, due to the ongoing impact of cold weather, fluorspar mining operations faced greater challenges, with significantly increased difficulty, directly leading to continued restrictions on fluorspar output. Overall, the recovery process of domestic fluorspar powder supply has not met market expectations, making it difficult to fully meet potential market demand growth. SMM expects that fluorspar powder prices may rise slightly this month. According to the latest SMM data, the current average delivery-to-factory price of 97% fluorspar powder is 3,625 yuan/mt, up 0.22% compared to last Thursday. Meanwhile, recent aluminum hydroxide prices have rebounded after hitting bottom, showing a slight upward trend. SMM data shows that the ex-factory average price of aluminum hydroxide is 2,185 yuan/mt, up 0.87% MoM. This price change provides strong support to the cost side of aluminum fluoride, helping to stabilize its prices. From the supply side, due to insufficient market confidence, the overall operating rate of aluminum fluoride enterprises is low. Especially during the Two Sessions in March, some companies, while ensuring long-term contract supplies, have formulated production cut plans, leading to an expected reduction in aluminum fluoride supply. On the demand side, the demand from aluminum smelters is currently in a slow release phase, theoretically capable of driving an increase in downstream demand for aluminum fluoride. However, downstream enterprises still adhere to purchasing as needed, resulting in a slow pace of demand growth, which makes it difficult to fundamentally change the weak downward trend of the aluminum fluoride market. Although there is some potential for demand growth, the weak situation in the aluminum fluoride market is likely to continue in the short term. Brief comment: This week, the tender prices of benchmark companies for aluminum fluoride were finalized, all falling below 10,000 yuan/mt. Due to some companies reducing production during the Two Sessions in March, market supply is expected to decrease. However, considering the difficulty in significantly improving the weak downstream demand in the short term, and the fact that companies may still face inventory pressure after clearing their inventories, the downward pressure on aluminum fluoride prices may ease somewhat, but the possibility of a significant price increase is very small. Prices are likely to remain in a low range.