Fluorite Prices Rise Sharply to Support Costs, Aluminum Fluoride Prices Are Expected to Rise Strongly in October [SMM Analysis]

SMM September 30 News:

In September, aluminum fluoride prices continued their weakening trend, though the rate of decline slowed down. As of now, the SMM aluminum fluoride price closed at 9,480-9,800 yuan/mt, while the SMM cryolite price was quoted at 7,400-9,500 yuan/mt.

On the raw material side, recent developments in the fluorite market have drawn significant attention. Currently, the delivery-to-factory price of 97% fluorite powder for aluminum fluoride enterprises mostly falls within the range of 3,400-3,700 yuan/mt. Entering September, fluorite prices rose sharply, driven by both cost support and a supply-demand mismatch. Supply side, the approaching winter is intensifying market tightness expectations. Low temperatures and complex terrain not only directly increase mining difficulty but also raise mining and operating costs; some mines, to mitigate winter shutdown risks, are refusing to budge on prices and holding back sales, further tightening short-term market supply. Demand side, there is a dual positive effect of “active restocking + downstream boost.” Downstream enterprises, concerned about winter supply fluctuations, have started winter stockpiling plans early, amplifying procurement demand periodically; meanwhile, recent sustained increases in hydrofluoric acid prices have significantly boosted production enthusiasm among enterprises, further driving actual demand for fluorite as an upstream raw material. The ongoing tightening of the supply-demand pattern has provided strong support for fluorite prices. According to SMM analysis, this support logic is expected to continue in the short term, with room for further increases in fluorite prices. SMM data shows that as of September 30, the average delivery-to-factory price of 97% fluorite powder reached 3,558 yuan/mt, up 11.47% from August 29. In contrast, the market performance of aluminum hydroxide, another core raw material for aluminum fluoride, has been disappointing. Affected by weakening alumina prices, aluminum hydroxide prices continued to decline in September. As of August 29, the average ex-factory price of aluminum hydroxide tracked by SMM was 1,868 yuan/mt, down 9.28% from August 29. Additionally, sulfuric acid prices came under pressure due to poor fundamental performance. Overall, although aluminum hydroxide and sulfuric acid prices have fallen, rising fluorite prices have pushed up the cost side for aluminum fluoride.

Supply side, constrained by limited profit margins and high operating production costs, aluminum fluoride enterprises have seen reduced production enthusiasm; at the same time, current enterprise inventory is at low levels, limiting overall market supply flexibility. Demand side, although operating aluminum capacity has increased slightly and procurement sentiment has recovered somewhat, overall demand remains largely rigid, providing limited boost to the market.

Brief Comment: The logic for a rise in aluminum fluoride prices in October has already emerged, but its final realization depends on the tender pricing of downstream aluminum enterprises. From the cost side, the sharp rise in fluorite prices has become the core support. Although prices of raw materials such as aluminum hydroxide and sulfuric acid continue to weaken, the increase in fluorite prices has offset the cost reductions of other raw materials, leading to an overall upward trend in aluminum fluoride production costs. Under cost pressure, corporate profit margins are continuously being squeezed, with some enterprises already experiencing losses, providing underlying momentum for price increases. From the supply and demand perspective, the current market is in a state of "weak balance," with no significant fluctuations on either the supply or demand side, and no key variables to alter the existing supply-demand equilibrium. In terms of market expectations, companies' willingness to push for price increases has significantly strengthened. Under high cost pressure and continued support from fluorite prices, the market has reached a consensus on aluminum fluoride price hikes in October. SMM expects prices may exceed 10,000 yuan/mt, though the actual realization of prices still awaits clear guidance from the tender prices of leading downstream aluminum enterprises in October.