Easing on the cost side, coupled with the continuation of weak supply and demand, kept aluminum fluoride prices stable this week [SMM Weekly Review of Fluoride Salts]

SMM News on June 19:

This week, aluminum fluoride enterprises have focused on fulfilling orders, with aluminum fluoride prices remaining stable. As of now, SMM aluminum fluoride prices closed at 9,630-9,900 yuan/mt, while SMM cryolite was quoted at 7,500-9,500 yuan/mt.

From the perspective of raw material supply, the raw material market has been weakening, with cost-side pressure continuing to ease. The fluorite market remains sluggish. Currently, the fluorite powder market has seen some relief in the tight supply situation due to an increase in the operating rate of mines in the north, coupled with the supplement of imported sources, making the market supply side relatively sufficient. On the demand side, end-use consumption is weak, and downstream enterprises have a strong wait-and-see sentiment. Fluorite prices lack upward support in the short term and are expected to continue their weak downward trend. As of now, the average delivery-to-factory price of 97% fluorite powder is 3,300 yuan/mt. Prices have continued to weaken this week, down 0.75% MoM. Additionally, the market for other raw materials of aluminum fluoride has been steadily declining. Affected by the loosening of alumina prices, aluminum hydroxide prices have continued to weaken this week, with an ex-factory average price of 2,069 yuan/mt, down 2.9% MoM. Sulphuric acid prices have mainly fluctuated at highs. Overall, the production cost of aluminum fluoride is on a downward trend.​

Affected by the continuous pressure on profits, the production enthusiasm of aluminum fluoride enterprises has been dampened, with the capacity utilization rate running at a low level for a long time. Despite the good operating conditions of downstream aluminum enterprises on the demand side, the procurement sentiment is average, mainly focusing on just-in-time procurement. Therefore, the support for aluminum fluoride prices from both supply and demand sides is relatively limited.

Brief Commentary: The current aluminum fluoride industry is mired in a dilemma of weak supply and demand. To reverse the downturn, enterprises on the supply side have adopted a strategy of controlling volume to maintain prices, resulting in sustained pressure on the industry's operating rate. Although the cost side has seen some relief due to the decline in fluorite and aluminum hydroxide prices, the high prices of sulphuric acid, coupled with rigid costs, still make the industry's profitability less optimistic. On the demand side, downstream aluminum enterprises mainly focus on just-in-time procurement, with a significant mindset of driving down prices, and the market trading atmosphere is sluggish. Overall, it is expected that aluminum fluoride prices will remain stable in the short term.