Raw Material Prices Edged Up Slightly, Continuously Elevating Production Pressure on Enterprises [SMM Fluoride Salt Weekly Review]

SMM August 21 News:

This week, aluminum fluoride enterprises mainly focused on delivering orders, with stable market transactions and steady prices. As of now, SMM aluminum fluoride prices closed at 9,500-9,800 yuan/mt, while SMM cryolite prices were quoted at 7,500-9,500 yuan/mt.

From the perspective of raw materials, the current delivery-to-factory price of 97% fluorite powder for aluminum fluoride enterprises is concentrated in the range of 3,050-3,300 yuan/mt, with a slight increase in fluorite prices this week. Due to limited mining operations in some regions, the supply of fluorite has tightened. Considering the increased cost of winter mining and the demand for winter stockpiling, there is a strong sentiment to hold back inventory, making fluorite prices more likely to rise than fall. Fluorite prices have slightly rebounded, with an increase of around 50 yuan. SMM data shows that the average delivery-to-factory price of 97% fluorite powder is currently 3,167 yuan/mt, up 0.79% MoM. Aluminum hydroxide prices weakened slightly this week, with SMM recording an average ex-factory price of 2,081 yuan/mt, down 0.53% MoM; the sulphuric acid market, supported by rising raw material prices, is currently fluctuating rangebound at high levels. Overall, the prices of raw materials for aluminum fluoride showed a slight upward trend this week.

In terms of supply, due to limited profit margins and continuously high production costs, enterprises' enthusiasm for production is low, leading to stable operations. From the demand side, although the operating rate of the downstream aluminum industry remains relatively stable, buyers generally adopt a cautious attitude, limiting purchases to meet basic needs, without any large-scale orders appearing. A comprehensive analysis indicates that the current supply and demand are in a relatively balanced but weak state, with insufficient support for aluminum fluoride prices from both sides.

Brief comment: Currently, the prices of raw materials for aluminum fluoride have risen slightly, increasing the overall cost support. However, in contrast, aluminum fluoride prices have not shown a corresponding upward trend. With increasing cost pressure, the production pressure on enterprises continues to grow, and their reluctance to budge on prices is gradually intensifying. On the other hand, the downstream aluminum enterprises' drive to lower prices is evident, which to some extent constrains the rise in aluminum fluoride prices. In summary, under the tug-of-war between enterprises' refusal to budge on prices and the downstream pressure to lower prices, aluminum fluoride prices are expected to remain stable in the short term.