Price Increase but Poor Profitability, Short-Term Stability with a Weak Trend [SMM Fluoride Salt Weekly Review]

SMM April 17 News:

The tender prices of benchmark enterprises were significantly raised in April. This week, aluminum fluoride enterprises mainly focused on delivering orders, and market prices were significantly adjusted upward based on the guidance of benchmark enterprise tender prices. As of now, SMM aluminum fluoride prices closed at 10,500-10,800 yuan/mt, and SMM cryolite prices were quoted at 6,500-7,500 yuan/mt.

From the perspective of raw material supply, the fluorite market showed a stable to weak trend this week. The delivery-to-factory price range for 97% fluorite powder was 3,500-3,750 yuan/mt. As the weather warmed up, mines in the north resumed operations, and market supply improved slightly. However, downstream enterprises showed low enthusiasm for procurement, and demand was mediocre. Currently, both supply and demand sides of fluorite powder are weak, and the resistance to price increases in the short term is significant, with a relatively higher possibility of decline. According to the latest SMM data, the current average delivery-to-factory price for 97% fluorite powder was 3,633 yuan/mt, down 0.24% WoW. In addition, aluminum hydroxide prices first declined and then slightly increased this week. SMM data showed that the average ex-factory price of aluminum hydroxide was 1,865 yuan/mt, down 0.43% WoW. Meanwhile, the price of sulphuric acid raw materials began to decline this week, and sulphuric acid prices weakened accordingly. Overall, the support from the raw material side for aluminum fluoride has started to loosen.

From the supply side, the raw material market has shown a downward trend recently, and the production pressure faced by enterprises has been alleviated to some extent. However, aluminum fluoride prices have not reached the ideal level expected by enterprises, resulting in low production enthusiasm among aluminum fluoride enterprises. Currently, the number of enterprises in shutdown and maintenance status remains high, and some enterprises have even advanced their maintenance plans. It can be seen that in the short term, the supply side has not shown an increasing trend. From the demand side, the operating rates of aluminum enterprises are stable with some increases, and although the overall increase is limited, overall demand still exists.

Brief Review: The trading performance of the aluminum fluoride market was mediocre this week. Although aluminum fluoride prices were raised, the profitability of enterprises remained poor. Currently, the overall industry operating rate is at a low level, and market supply is unlikely to improve in the short term. Downstream aluminum enterprises maintain rigid procurement demand without significant increases. With the cost side continuing to weaken, SMM predicts that aluminum fluoride prices will show a stable to weak trend in the short term.