Fluorite Prices Decline, Leading to a Slight Easing of Costs, Aluminum Fluoride Prices Drop Slightly [SMM Fluoride Weekly Review]

SMM Nov. 6:

This week, the tender price for aluminum fluoride from downstream benchmark enterprises was finalised, and aluminum fluoride prices edged down. So far, SMM aluminum fluoride prices closed at 9,940-10,250 yuan/mt, while SMM cryolite was quoted at 7,500-9,500 yuan/mt.

Raw material side, the delivery-to-factory price for 97% fluorite powder, a core raw material for aluminum fluoride, concentrated in the range of 3,350-3,500 yuan/mt. Since late October, as fluorite prices climbed to highs, purchase willingness from downstream enterprises weakened, market activity declined, and fluorite prices entered a correction phase. However, the arrival of winter intensified market expectations of tight supply, providing some bottom support for fluorite prices. Meanwhile, affected by declining hydrogen fluoride prices downstream, a wait-and-see sentiment emerged on the demand side, purchase willingness decreased, further driving the downward trend in fluorite prices. Therefore, SMM expects fluorite prices to be dominated by short-term corrections, while the medium and long-term upward trend remains unchanged.

In addition, the price of aluminum hydroxide, another core raw material for aluminum fluoride, continued to weaken this week. The weighted average price compiled by SMM was 1,773 yuan/mt, down 0.84% WoW. The sulfuric acid market, supported by both tightening supply and cost, 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 declined. Meanwhile, current enterprise inventory is at low levels, and overall market supply is expected to decrease. Demand side, operating aluminum capacity downstream remained basically stable, and overall demand is still dominated by just-in-time procurement.

Brief Comment: This week marked a key period for the aluminum fluoride market, as the November tender pricing from downstream aluminum benchmark enterprises was settled. Prices showed a slight downward trend overall, with a decline of about 100-120 yuan/mt, settling in the range of 9,940-10,050 yuan/mt. Currently, aluminum fluoride enterprises face high costs and production pressure, leading to poor operating enthusiasm. Although there are expectations of tightening supply, overall market supply remains relatively ample. On the demand side, just-in-time procurement showed no significant increase. Although fluorite prices have recently declined, overall costs remain high, putting significant production pressure on enterprises. Some enterprises reported losses, and currently, there is a strong desire for price increases among enterprises, though the actual implementation remains to be followed up. Subsequently, close attention should be paid to dynamic changes in raw material costs and adjustments in downstream procurement pace.