SMM, July 31:
Insufficient cost support and weak downstream demand in late June, combined with price cuts driven by tenders from benchmark enterprises, led aluminum fluoride prices to consolidate and pull back in July. By the end of July, SMM aluminum fluoride prices were quoted at 10,950-11,400 yuan/mt. The cryolite market, supported by rising costs and improving demand, consolidated on a strong note in July, with SMM cryolite prices quoted at 7,500-9,000 yuan/mt by month-end.
Cost side: Divergent changes across products further lifted overall costs.
China’s fluorite market prices mainly rose sharply in July. Supply side, the high-pressure situation from the national special scrutiny on mine safety production persisted, with the upgraded long-term industry regulation triggered by earlier safety incidents showing no relaxation; standards for mining and underground operations continued to tighten. Many mines in core fluorite-producing regions such as Zhejiang, Fujian, and Henan remained in cycles of shutdown-for-rectification and safety technological transformation, keeping regional effective mine operating rates low, while the available spot supply of domestic raw ore remained contracted. Additionally, mid-July saw Mongolian mines undergo concentrated maintenance shutdowns, causing a phased sharp decline in imported fluorite port arrivals. The simultaneous tightening of domestic and overseas supply further aggravated the spot tightness. Under the dual support of strict regulation and import reductions, China’s fluorite miners held a strong willingness to hold back from selling and hold prices firm, keeping the overall effective spot supply available in the market relatively tight and forming a solid base of cost support for fluorite prices. Demand side, downstream demand presented structural positives, but overall procurement was relatively cautious. In the hydrofluoric acid industry, spot supply contracted due to maintenance shutdowns at major northern plants, driving monthly contract prices upward; hydrofluoric acid prices were broadly raised to around 14,800 yuan/mt for August, with some loss-making enterprises conducting phased, need-based restocking, providing a small boost to fluorite procurement volumes. However, the overall operating rate of the hydrofluoric acid industry remained low, with most enterprises still facing losses and raw material cost losses, leaving them unwilling to lock in prices for large-scale stockpiling; procurement mainly consisted of buying as needed and small-volume, need-based cargo pick-ups. Furthermore, as downstream refrigerants entered their traditional consumption peak season, end-use demand steadily recovered, indirectly providing a floor for fluorite prices from the top down. Overall, with strong support from the dual supply contraction both domestically and overseas and a positive demand outlook, fluorite prices mainly consolidated on a strong note. As of July 31, the SMM average delivery-to-factory price for 97% fluorite powder was approximately 3,358 yuan/mt, a 3.32% rise from June 30. As another feedstock for aluminum fluoride, the aluminum hydroxide market tracked alumina's drift lower, staying under pressure and in the doldrums. As of July 31, SMM data showed the average ex-factory price of aluminum hydroxide at 1,680 yuan/mt, down 2.21% from June 30.
In addition, China’s sulphuric acid market largely maintained a high-level tug-of-war pattern in July, with the price center edging down MoM and regional divergence intensifying. At the start of the month, maintenance at smelter acid and sulphur-based acid plants still lent some support, keeping overall supply tight. Low inventories at acid producers sustained their willingness to hold prices firm, limiting the room for a sharp price decline. However, as maintenance-hit plants resumed production in large numbers in mid-to-late July and supply growth was released, the supply-demand pattern gradually shifted to a looser balance and prices fell under pressure. Demand side, the traditional downstream phosphate fertilizer sector was in its off-season, while operating rates of titanium dioxide and fluorine chemicals continued to weaken. Under the pressure of losses, downstream buyers were cautious and only purchased small volumes on a need-to basis. Weakening demand dominated the sulphuric acid price trend in July, causing the price center to drift slightly lower. In August, sulphuric acid is expected to remain under pressure in the near term. Watch the pace of autumn fertilizer restocking and geopolitical developments impacting sulphur.
Overall, the raw material side for aluminum fluoride showed strength in July: fluorite prices rose, while aluminum hydroxide and sulphuric acid drifted lower. As a result, the overall cost center edged up.
Supply-demand side: Mounting losses drag on operating rates and tighten supply; rigid demand provides a floor but cannot alter the weak procurement pattern
Supply side, the logic of production suppressed by losses seen in June persisted, sending the industry into a vicious cycle of “high costs—deep losses—low operating rates.” In July, losses spread further. Aluminum fluoride producers voluntarily stepped up planned plant maintenance and flexible production cuts, pushing overall operating rates lower. Most producers prioritized delivering existing long-term contract orders, with essentially no new production schedules added. Actual available spot supply in the market remained tight, and effective supply growth virtually stalled. The supply contraction indirectly underpinned prices. Demand side, downstream aluminum operating capacity stayed high and stable, providing a rigid floor for aluminum fluoride demand. However, smelter procurement strategies remained focused on need-based restocking and pushing for lower prices while on the sidelines, with no additional incremental demand release. Commentary: The upstream raw materials for aluminum fluoride showed divergent trends. Fluorite prices firmed and strengthened, further reinforcing the cost floor. Aluminum hydroxide and sulphuric acid pulled back slightly, only partially offsetting cost pressure. The industry's overall production cost remained high, making producers' profitability difficult to restore and their operating willingness persistently sluggish. Backed by rigid cost-side support, the industry's low supply pattern, and coupled with the significant boost to industry chain sentiment from the sharp hike in August hydrofluoric acid long-term contract prices, the aluminum fluoride market price is expected to hold up well overall in August.
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