Trading Sluggish, Prices Stable, Aluminum Fluoride Market Trapped in High Costs and Weak Demand Dilemma [SMM Fluoride Salt Weekly Review]

SMM November 13 News:

This week, aluminum fluoride prices remained stable with a sluggish market trading atmosphere. As of now, SMM aluminum fluoride prices closed at 9,940-10,250 yuan/mt, and SMM cryolite prices were 7,500-9,500 yuan/mt.

From the raw material side, the delivery-to-factory price of 97% fluorite powder, a core raw material for aluminum fluoride, was concentrated in the 3,350-3,500 yuan/mt range. After late October, fluorite prices retreated after a rapid rise, leading to weaker purchase willingness from downstream buyers, which reduced market activity. However, rising mining costs and expectations of tight supply in winter provided bottom support. Meanwhile, the decline in downstream hydrogen fluoride prices increased wait-and-see sentiment among buyers, reducing procurement willingness and pushing fluorite prices to adjust downward in the short term. SMM expects that the fluorite price adjustment is a temporary phenomenon, and the medium and long-term upward trend remains unchanged. Additionally, the other core raw material, aluminum hydroxide, saw its weighted average price, as tracked by SMM, fall to 1,765 yuan/mt, down 0.45% WoW. The sulphuric acid market, under the dual influence of tightening supply and cost support, exhibited a strong holding pattern. Overall, despite varying trends in different raw materials, the high-cost structure of aluminum fluoride is unlikely to change.

In terms of supply, aluminum fluoride enterprises, squeezed by shrinking profit margins and high production costs, have seen their production enthusiasm wane. Enterprise inventories are low, with most companies operating at a loss. Coupled with environmental protection restrictions in Henan, some enterprises' operations are limited, leading to an expected decline in overall market supply. On the demand side, the operating aluminum capacity of downstream enterprises has remained largely stable. Due to expectations of seasonal price increases for aluminum fluoride, some companies began to gradually procure in the previous two months, resulting in sufficient inventory. Therefore, current demand is mainly driven by restocking, with overall demand declining.

Brief Comment: Currently, aluminum fluoride enterprises are mired in a high-cost dilemma, exacerbated by recent rises in sulphuric acid prices, which have further increased production burdens. Enterprises generally face losses of 200-300 yuan per ton, leading to persistently low production enthusiasm. At the same time, the demand side is weak, with both supply and demand lacking positive drivers. However, strong cost support provides a key floor for prices. Close attention should be paid to the dynamic changes in raw material costs and adjustments in downstream procurement pace.