Cost Side Supported by Fluorite Rises, Aluminum Fluoride Prices Broadly Adjusted Upward in October [SMM Fluoride Salt Weekly Review]

SMM Oct. 9:

The market awaited price guidance from downstream aluminum fluoride tender prices of benchmark enterprises during the week, with overall trading relatively mediocre. As of now, SMM aluminum fluoride prices closed at 9,480-9,800 yuan/mt, and SMM cryolite prices were quoted at 7,300-9,500 yuan/mt.

From the raw material perspective, delivery-to-factory prices of 97% fluorite powder for aluminum fluoride enterprises mostly concentrated in the range of 3,400-3,700 yuan/mt. Recently, 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, showed stronger sentiment to refuse to budge on prices and hold back sales, further tightening short-term market supply. Demand side, there were dual positive factors of "active restocking + downstream boost". Downstream enterprises, concerned about winter supply fluctuations, started winter stockpiling plans early, amplifying procurement demand periodically; meanwhile, recent hydrofluoric acid prices continued to climb, significantly boosting enterprise production enthusiasm, further boosting actual demand for fluorite as an upstream raw material. The ongoing tightening of the supply-demand pattern provided strong support for fluorite prices. According to SMM analysis, this support logic is expected to persist in the short term, with room for further increases in fluorite prices. Aluminum hydroxide prices continued to weaken this week, with SMM recording a weighted average price of 1,863 yuan/mt, down 0.96% WoW; the sulfuric acid market fundamentals performed poorly, and sulfuric acid prices moved down under pressure. Overall, although raw material markets showed mixed changes, aluminum fluoride overall cost side was in an elevated state, supported strongly by fluorite prices.

In terms of supply, pressured by limited profit margins and high operating production costs, aluminum fluoride enterprises saw reduced production enthusiasm; concurrently, current enterprise inventory remained low, limiting overall market supply elasticity. Demand side, although operating aluminum capacity increased slightly and procurement sentiment recovered somewhat, overall demand remained primarily rigid, providing limited boost to the market.

Brief Review: This week, the aluminum fluoride raw material market continued its divergent pattern. Although trends varied among raw materials, the core fundamental of high operating costs remained unchanged. From a supply-demand rhythm perspective, both supply and demand sides currently remained stable without significant fluctuations, and no key variable has emerged to break the existing balance. Notably, the October tender pricing for downstream aluminum benchmark enterprises has been finalized, showing a broadly raised trend, ultimately settling in the range of 10,060-10,150 yuan/mt. With this tender price clarified, it provides clear price guidance for the current aluminum fluoride market. Therefore, SMM expects aluminum fluoride prices to complete adjustments following the tender guidance and transition steadily in the short term.