Sulfuric Acid Price Increase Aggravates Cost Pressure, Aluminum Fluoride Prices Hold Steady Amid Weak Supply-Demand Balance [SMM Fluoride Salt Weekly Review]

SMM November 20 News:

Aluminum fluoride prices remained largely stable this week, with sluggish market trading activity. As of now, SMM aluminum fluoride prices closed at 9,940-10,250 yuan/mt, while SMM cryolite prices were quoted at 7,400-9,000 yuan/mt.

Cost side, the delivery-to-factory price for 97% fluorite powder, a core raw material for aluminum fluoride, held steady in the range of 3,350-3,500 yuan/mt this week. Recent fluorite prices stopped falling and stabilized, but market trading remained weak, with downstream enterprises showing relatively low procurement enthusiasm. Prices are expected to remain largely stable in the short term. In addition, the price of aluminum hydroxide, another key raw material for aluminum fluoride, saw little fluctuation this week. The weighted average price compiled by SMM was 1,761 yuan/mt, down 0.23% WoW. Meanwhile, the sulfuric acid market held up well due to tightening supply and cost support. Overall, despite divergent trends in raw materials, rising sulfuric acid prices continued to push up the overall production cost of aluminum fluoride.

In terms of supply, aluminum fluoride enterprises faced squeezed profit margins and high production costs, leading to persistently low operating enthusiasm. Enterprise inventory stayed at low levels, with most producers in a loss-making situation. Additionally, environmental protection measures restricted production for some enterprises in Henan, leading to expectations of an overall decline in market supply. On the demand side, operating aluminum capacity remained largely stable. As enterprises had expectations of a seasonal price increase for aluminum fluoride, some began restocking gradually over the past two months, leaving them with sufficient inventory. Therefore, current demand was mainly for essential restocking, and overall demand declined.

Brief Review: Aluminum fluoride producers are currently trapped in high-cost difficulties, with rising sulfuric acid prices continuously increasing production pressure and dampening operating enthusiasm. However, market supply remained relatively ample, coupled with weak demand, meaning neither the supply nor demand side provided strong support. Still, strong cost-side support offered a key floor for prices. Going forward, close attention should be paid to changes in raw material costs and adjustments in downstream procurement pace.