Aluminum fluoride prices were under pressure in August, with the weak supply and demand pattern remaining unchanged [SMM Weekly Review of Fluoride Salts]

SMM News on August 7:

This week, the tender prices for aluminum fluoride from downstream benchmark enterprises were finalised, with aluminum fluoride prices experiencing a slight decline. As of now, SMM aluminum fluoride prices closed at 9,500-9,800 yuan/mt, while SMM cryolite was quoted at 7,500-9,500 yuan/mt.

From the perspective of raw materials, the current delivery-to-factory prices for 97% fluorite powder at aluminum fluoride enterprises are concentrated in the 3,000-3,300 yuan/mt range, with the fluorite market transitioning smoothly this week. Currently, the operation rate of mines in the north remains at a relatively good level, coupled with imported supplies supplementing the market, keeping the supply side generally abundant. However, miners are making early preparations for winter stockpiling, showing a strong reluctance to budge on prices. On the demand side, the downstream market exhibits significant resistance to high-priced fluorite, with hydrofluoric acid enterprises mostly adopting a purchasing-as-needed strategy, and actual demand not effectively increasing. Meanwhile, the market price of hydrofluoric acid continues to hover at a low level with a downward trend, further reducing its acceptance of high-priced fluorite supplies. Overall, amid the tug-of-war between miners' reluctance to budge on prices and downstream pressure to drive down prices, fluorite prices are likely to fluctuate rangebound in the short term, with both upside and downside room being limited. SMM data shows that the current average delivery-to-factory price for 97% fluorite powder is 3,142 yuan/mt, with prices remaining 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, experiencing a high-level, narrow-range fluctuating trend 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 facing significant production pressures: on one hand, costs such as raw materials have loosened somewhat but remain generally high, continuously squeezing profit margins; on the other hand, with weakening profit expectations, enterprises' willingness to operate has significantly decreased, and the industry's capacity utilization rate has remained low for a long time. Most enterprises are maintaining operations through production cuts, with some even halting production, leading to a contraction in market supply. The demand side also lacks vitality: despite downstream electrolytic aluminum operations remaining high and slightly increasing, buyers are cautious, strictly adhering to just-in-time procurement, without any bulk restocking or stockpiling actions, and 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, and there is little short-term momentum for a significant price boost.

Brief Commentary: The August tender pricing for downstream electrolytic aluminum benchmark enterprises has been finalised this week, and under its influence, the aluminum fluoride market price continues to weaken. The tender prices for benchmark enterprises in August have declined by 70-100 yuan/mt compared to the previous period, with the range being 9,500-9,600 yuan/mt. The current pattern of weak supply and demand in the aluminum fluoride market persists. After entering August, the raw material market has generally remained stable, with no significant positive factors emerging on either the supply or demand sides. Overall, aluminum fluoride prices are expected to remain stable in the short term, with a smooth transition.