SMM June 4 update:
This week, the aluminum fluoride tender price from downstream benchmark enterprises was finalised, and aluminum fluoride prices declined. As of now, SMM aluminum fluoride prices closed at 11,280-11,700 yuan/mt; cryolite prices remained stable, with SMM cryolite quoted at 7,000-8,500 yuan/mt.
Raw material side: This week, China's 97% fluorite wet powder market remained stable, with mainstream delivered transaction prices concentrated at 3,100-3,400 yuan/mt, and regional price spreads remained notable. Supply side, as mine operating rates in northern major producing areas continued to recover, domestic spot supply steadily increased; meanwhile, Mongolian imported fluorite cargoes arrived at ports successively and flowed into the market, further exacerbating the loose supply pattern. However, recent coal mine safety accidents in Shanxi triggered market expectations of stricter mine safety and environmental protection supervision, which may cause periodic disruptions to production pace at some mines going forward, and the market still held certain wait-and-see sentiment toward the supply side. Demand side performance remained weak. Downstream hydrofluoric acid enterprises, constrained by insufficient operating rates in end-use industries such as refrigerants and fluoropolymers, maintained just-in-time procurement for raw materials, with limited follow-up on large orders, and overall market trading atmosphere was sluggish. Affected by weak raw materials and insufficient end-use demand, the hydrofluoric acid market price center continued to shift downward, further weakening support for the fluorite market. Overall, under the combined influence of multiple bearish factors including domestic supply recovery, continuous supplementation of low-priced imported cargoes, and weak downstream demand, the overall supply-demand pattern remained loose, and fluorite prices are likely to continue weak consolidation in the short term. This week, China's aluminum hydroxide market held up well within a narrow range, with SMM aluminum hydroxide weighted average price at 1,656 yuan/mt, up 0.3% WoW. Upstream cost supported spot quotes, while downstream made purchases on demand with limited transaction volume growth. This week, domestic sulphuric acid stayed high and held up well. High sulphur costs combined with concentrated maintenance at multiple facilities and tight spot supply; although phosphate fertiliser downstream was in the traditional off-season, suppressing room for price increases, just-in-time chemical demand provided a floor, and short-term sulphuric acid prices are expected to continue fluctuating at highs with an overall firm pattern. Overall, this week aluminum fluoride's main raw materials were generally stable with slight rise. Rising aluminum hydroxide and sulphuric acid prices drove the industry's comprehensive cost center upward, and raw material price increases were difficult to pass through smoothly downstream, intensifying pressure on enterprise production costs.
Supply side continued the pattern of "rigid high costs—sustained profit pressure—low operating rates." This week, sulphuric acid and aluminum hydroxide prices rose, the industry was generally in a state of losses, enterprise maintenance and flexible production increased, and the industry operating rate remained at a low level of around 40%, with limited effective incremental supply. Demand side, downstream operating aluminum capacity remained stable at high levels, providing rigid floor demand for aluminum fluoride, but aluminum enterprise procurement was dominated by just-in-time restocking and pushing for lower prices with a wait-and-see approach, with no additional incremental demand for now.
Brief comment: Recently, the raw material market was generally stable with a strengthening trend. Within the week, the industry's comprehensive cost center rose, enterprise profit margins continued to be squeezed, and sustained losses dampened production enthusiasm. On the demand side, downstream aluminum enterprises still maintained just-in-time procurement. Within the week, the June benchmark aluminum enterprise aluminum fluoride tender price was officially finalised, down 200-220 yuan/mt WoW. Driven by the tender price reduction, market transaction price center shifted downward accordingly. Going forward, close attention should be paid to dynamic changes on the raw material cost side, as well as marginal adjustments in downstream aluminum enterprise procurement pace.
