Sulfuric Acid Prices Remain High, Supporting Costs, Aluminum Fluoride Prices Rise Following Tender Guidance [SMM Fluoride Salt Weekly Review]

SMM December 4 News:

This week, with the tender price for aluminum fluoride set by a leading downstream enterprise, the market received guidance and overall prices rose. As of now, SMM aluminum fluoride prices closed at 10,200-10,500 yuan/mt, and SMM cryolite was quoted at 7,400-9,000 yuan/mt.

Raw material side, the delivery-to-factory price for 97% fluorite powder, a core raw material for aluminum fluoride, was concentrated in the range of 3,150-3,450 yuan/mt. Trading activity in the market was mediocre this week, downstream enterprises showed low procurement enthusiasm, and fluorite prices pulled back. Additionally, the price of aluminum hydroxide, another core raw material for aluminum fluoride, continued to decline this week. The weighted average price compiled by SMM was 1,754 yuan/mt, down 0.4% WoW. The sulphuric acid market performed strongly; supported by tightening supply and cost support, it held up well. The continued strength in sulphuric acid prices has become a core factor driving the overall production cost of aluminum fluoride higher.

Supply side, aluminum fluoride prices increased at the beginning of the month, enterprise profitability improved, so aluminum fluoride producers' operating enthusiasm improved slightly, and supply increased slightly. Demand side, operating aluminum capacity remained basically stable, providing a solid foundation for rigid demand for aluminum fluoride. However, as some enterprises held sufficient inventory, overall procurement activity declined, exerting some downward pressure on market prices.

Brief Review: This week, the December tender pricing from a leading downstream aluminum enterprise was officially finalized. The tender price overall showed an upward trend, ultimately settling in the range of 10,200-10,300 yuan/mt. With the tender price clarified, aluminum fluoride prices generally increased by 250-300 yuan/mt following the guidance. Cost side, the price of sulphuric acid, a core raw material for aluminum fluoride, remained strong, providing solid support for aluminum fluoride costs; meanwhile, the price of another key raw material, fluorite, pulled back, alleviating production pressure for enterprises to some extent and driving a slight improvement in industry profitability, which subsequently boosted operating enthusiasm. Demand side performance remains the main constraint in the current market; downstream procurement pace showed no significant improvement, the overall demand atmosphere remained mediocre, and effective synergistic support from both supply and demand sides has not yet formed. Going forward, close attention should be paid to dynamic changes in raw material costs and adjustments in the downstream procurement pace.