Raw Material Divergence Fails to Alter High Costs, Aluminum Fluoride Market Trading Remains Sluggish with Stable Prices [SMM Fluoride Salt Weekly Review]

SMM October 30 News:

This week, aluminum fluoride enterprises focused on fulfilling orders, with lukewarm market trading and stable prices. As of now, SMM aluminum fluoride prices closed at 10,060-10,350 yuan/mt, and SMM cryolite prices were quoted at 7,400-9,500 yuan/mt.

Cost side, the delivery-to-factory price of 97% fluorite powder, a core raw material for aluminum fluoride, was concentrated in the range of 3,500-3,700 yuan/mt. Since October, fluorite prices rose sharply driven by both cost support and a supply-demand mismatch. However, after prices climbed to highs, purchase willingness from downstream enterprises weakened, market activity declined, and prices showed slight softening. Nevertheless, the approaching winter intensified market expectations of tight supply, which will provide some bottom support for fluorite prices. Therefore, SMM expects fluorite prices to fluctuate at highs in the short term, while the medium and long-term upward trend remains unchanged. Aluminum hydroxide prices continued to weaken this week, with the SMM weighted average price at 1,788 yuan/mt, down 1.38% WoW. The sulfuric acid market, supported by tightening supply and cost factors, showed characteristics of holding up well. Overall, despite divergent trends among various raw materials, the overall cost structure for aluminum fluoride remains high and is difficult to change.

Supply side, pressured by limited profit margins and high production costs, aluminum fluoride enterprises' production enthusiasm decreased. Concurrently, current enterprise inventory is at low levels, limiting overall market supply elasticity. Demand side, operating aluminum capacity downstream remained basically stable, with demand still primarily rigid.

Brief Review: This week, the raw material market for aluminum fluoride continued its divergent trend, with the core fundamental of high costs on the cost side unchanged. Poor profitability led to lower operating enthusiasm among enterprises, while demand side performance was mediocre, resulting in lukewarm short-term market trading and stable prices. However, with strong support from persistently high prices of key raw materials like fluorite and sulfuric acid, aluminum fluoride still has some potential for future price increases. Continued attention is needed on price fluctuations of raw materials and changes in downstream demand.