SMM, July 2 –
This week, the aluminum fluoride tender price for benchmark downstream enterprises was finalised, and aluminum fluoride prices edged down. As of now, SMM’s aluminum fluoride price closed at 10,950-11,400 yuan/mt; the cryolite price was generally stable with slight rise, with SMM’s cryolite quotation at 7,000-9,000 yuan/mt.
Raw material side, this week, the domestic 97% fluorite wet powder market was overall stable, with mainstream delivered price at 3,100-3,400 yuan/mt and regional price differences still existing. Supply side, the nationwide special safety inspections for mine production continued to intensify, and earlier safety accidents triggered a comprehensive upgrade of regulatory supervision, significantly tightening safety management standards across the industry. Many key mines in major fluorite producing areas such as Zhejiang and Fujian temporarily suspended production for rectification and conducted safety self-inspections, causing the mine operating rate in the region to pull back significantly and spot supply to contract substantially. Under the high-pressure regulatory environment, domestic miners showed strong sentiment to hold prices firm and hold back from selling, keeping spot circulation tight, which effectively offset supply increases from the resumption of operations in northern producing areas and the continuous arrival of Mongolian import cargoes at ports. The demand side continued to weaken overall, capping upside room for the fluorite market. Top-tier domestic fluorochemical enterprises simultaneously reduced operating loads, with the operating load of the downstream hydrofluoric acid industry continuing to decline, and demand in end-user segments such as refrigerants and fluoropolymers contracting in sync, directly dragging down downstream procurement demand for fluorite. Overall, the fluorite market was in a two-way game pattern of contracting supply and weak demand, with bullish and bearish factors offsetting each other, and a high probability of maintaining a sideways consolidation pattern in the short term. This week, the domestic aluminum hydroxide market held up well in a narrow range, with SMM aluminum hydroxide weighted average price at 1,718 yuan/mt, up 1.18% WoW. The sulphuric acid market consolidated at highs in a narrow range. Viewed from the raw material side, divergent trends in raw material prices lifted the overall production cost of aluminum fluoride.
The supply side was mired in a negative cycle of high costs, deep losses, and sluggish operating rates. Rising raw material prices worsened enterprise losses, expanding the loss-making scope. Plant maintenance and flexible production adjustments increased, and the overall operating rate continued to slide. It is understood that some enterprises adopted contractionary operating strategies, prioritising deliveries under long-term contracts with essentially no new production schedules, so market effective supply increment was limited. On the demand side, downstream operating aluminum capacity remained high, providing rigid demand support for aluminum fluoride, but aluminum smelters were cautious in procurement, mainly restocking based on rigid demand while pushing for lower prices and waiting on the sidelines, with no release of incremental procurement demand.
Commentary: The aluminum fluoride tender price for benchmark aluminum enterprises in July was officially finalised, down 330 yuan/mt MoM, and the transaction center of the market moved down accordingly. Cost side, fluorite prices stabilized at highs, aluminum hydroxide edged up slightly, and sulphuric acid stayed high, continuously supporting the production cost of aluminum fluoride. The industry remained in a pattern of high costs, low profits, and low operating rates. In the short term, high operating rates in downstream aluminum will still provide rigid demand support, but procurement will remain predominantly need-based restocking, and the market lacks new demand drivers. Currently, the market price has largely completed the pass-through of the tender price decline. Against the backdrop of continuous cost-side support and rigid demand cushioning, aluminum fluoride prices are expected to mainly stay stable in the short term. Going forward, focus needs to be on raw material price changes and downstream procurement pace adjustments.
