Raw Material Divergence Fails to Alleviate High Costs, Aluminum Fluoride Still Has Room for Short-Term Price Increases [SMM Fluoride Salt Weekly Review]

SMM October 16 News:

This week, aluminum fluoride enterprises focused on fulfilling orders, with moderate market activity. Prices stabilized after an increase, and SMM aluminum fluoride prices closed at 10,060-10,350 yuan/mt, while SMM cryolite was quoted at 7,400-9,500 yuan/mt.

From the raw material perspective, delivery-to-factory prices for 97% fluorite powder for aluminum fluoride enterprises mostly concentrated in the range of 3,500-3,750 yuan/mt. Recently, fluorite prices rose sharply driven by both cost support and supply-demand mismatch. The approaching winter intensified expectations of tight market supply, while winter stockpiling plans and the recovery of the hydrofluoric acid market amplified procurement demand. The continuously tightening supply-demand pattern pushed fluorite prices steadily higher, and the supply-demand imbalance is difficult to alleviate in the short term, giving the upward price trend strong sustainability. Aluminum hydroxide prices continued to weaken this week, with the SMM weighted average price recorded at 1,838 yuan/mt, down 1.34% WoW. The sulfuric acid market saw good purchasing enthusiasm from downstream enterprises coupled with raw material support, leading to continuously rising prices. Overall, although raw material markets showed mixed performance, the strong support from fluorite prices kept the overall cost side of aluminum fluoride in an elevated state.

In terms of supply, pressured by limited profit margins and high operating costs, aluminum fluoride enterprises' production enthusiasm decreased. Meanwhile, current enterprise inventory is at low levels, limiting overall market supply flexibility. On the demand side, although operating aluminum capacity saw a slight increase and procurement sentiment recovered somewhat, overall demand remained primarily rigid, providing limited boost to the market.

Brief Comment: This week, the aluminum fluoride raw material market continued its divergent pattern. Although various raw materials showed different trends, the core fundamental of high operating costs remained unchanged. Supported strongly by the cost side, aluminum fluoride tender prices from benchmark aluminum enterprises showed a wide increase, finally settling in the range of 10,060-10,150 yuan/mt. The clarification of these benchmark tender prices provided clear price guidance for the current aluminum fluoride market—after following the tender prices to complete increases, the market overall entered a stable transition phase, with prices temporarily showing no further significant fluctuations, and industry supply-demand and price competition temporarily reached a balance. However, judging from the cost side trend, there is still room for increases ahead. Therefore, SMM expects aluminum fluoride prices still have room to rise in the short term, with cost support continuing to dominate market price trends.