Limited support from stable aluminum fluoride raw materials during the week, with weak supply and demand posing risks of a correction [SMM Weekly Review of Fluoride Salts]

SMM News on July 31:

This week, aluminum fluoride enterprises have focused on fulfilling orders, with mediocre market transactions and stable aluminum fluoride prices. As of now, SMM aluminum fluoride prices have closed at 9,600-9,800 yuan/mt, while SMM cryolite prices are quoted at 7,500-9,500 yuan/mt.

From the perspective of raw materials, the fluorite market has transitioned smoothly this week. Currently, the operating rate of mines in the north is moderate, and combined with the supplement of imported sources, the market supply side is relatively abundant. However, miners are laying out for winter stockpiling, showing strong reluctance to budge on prices. On the demand side, downstream resistance to high-priced fluorite is evident, with hydrofluoric acid enterprises primarily purchasing as needed. Actual demand has not improved, and the market price of hydrofluoric acid continues to run at a low level, still showing a downward trend. Amidst the tug-of-war between miners' refusal to budge on prices and downstream pressure to drive down prices, fluorite prices may fluctuate rangebound, with limited room for change. As of now, the average delivery-to-factory price of 97% fluorite powder is 3,142 yuan/mt, and prices have remained stable this week. Aluminum hydroxide prices have been relatively stable this week, with SMM recording an average ex-factory price of 2,092 yuan/mt. The sulphuric acid market is currently supported by rising raw material prices, operating in a state of high-level, narrow-range fluctuations in the short term. Overall, the aluminum fluoride raw material market has been generally stable this week.​

The aluminum fluoride market currently exhibits a sluggish trend with weak supply and demand. From the supply side, enterprises are under significant production pressure: on the one hand, costs such as raw materials remain high, continuously squeezing profit margins; on the other hand, influenced by weakened profit expectations, enterprises' willingness to operate has declined significantly, leading to long-term low capacity utilization rates in the industry. Against this backdrop, most enterprises have chosen to maintain operations through production cuts, with some even entering shutdown states, resulting in a contraction in market supply scale. The demand side also lacks vitality: despite an increase in operating capacity in the downstream aluminum industry, purchasers generally maintain a cautious attitude, with procurement behaviors strictly centered around actual production needs. There have been no large-scale procurement actions such as batch restocking or early stockpiling, and overall procurement volumes remain at just-in-time levels. Overall, the current support from both supply and demand sides for aluminum fluoride prices is relatively weak.

Brief Commentary: This week, the aluminum fluoride raw material market has remained stable, but the industry has shown a clear pattern of weak supply and demand. The supply side continues to contract due to low enterprise willingness to operate, but this has not provided support for prices. The demand side primarily focuses on just-in-time procurement, lacking incremental boosts. Market transactions have been generally sluggish, with insufficient activity. In the short term, under the triple pressures of falling costs, supply surplus, and weak demand, aluminum fluoride prices may face further risks of correction.