SMM, January 23:
This week, aluminum fluoride enterprises mainly focused on fulfilling orders, with sluggish transaction performance. Aluminum fluoride prices remained largely stable, with SMM aluminum fluoride prices closing at 11,200-12,500 yuan/mt, and SMM cryolite prices at 6,500-7,200 yuan/mt.
On the raw material side, the fluorite market remained relatively stable, with the delivery-to-factory price of 97% fluorite powder for aluminum fluoride enterprises staying at 3,450-3,750 yuan/mt. Although the overall market was stable, the gradual decline in operating rates of miners and beneficiation plants, coupled with the impact of environmental protection policies and the upcoming National People's Congress and Chinese People's Political Consultative Conference, imposed certain constraints on supply, limiting fluorite availability. Additionally, the recent slight rise in downstream hydrogen fluoride prices provided an upward expectation for fluorite prices. Currently, SMM data shows the average delivery-to-factory price of 97% fluorite powder at 3,592 yuan/mt, unchanged from the previous period. Meanwhile, the price of another raw material, aluminum hydroxide, continued to decline due to weakened supply support, with SMM recording an ex-factory average price of 3,065 yuan/mt, down 9.32% MoM. This situation led to a softening of aluminum fluoride costs, thereby weakening the overall price support for aluminum fluoride.
From the supply side, the significant decline in aluminum fluoride prices severely impacted the profitability of many enterprises, with some even experiencing negative profits. To address this challenge, enterprises opted for production halts and maintenance to reduce operating costs and losses, which in turn led to a decrease in supply. From the demand side, although aluminum production remained stable, most enterprises had already completed inventory replenishment, resulting in relatively sluggish overall market demand.
Brief Comment: During the week, aluminum fluoride enterprises experienced sluggish transactions, primarily focusing on fulfilling previous orders, with insufficient market activity. Cost performance was mixed, as fluorite powder faced supply constraints and showed upward expectations due to a recovery in the end-use market, while aluminum hydroxide prices continued to decline, driven by the ongoing drop in raw material alumina prices. Coupled with weak supply and demand in the aluminum fluoride industry before the holiday, aluminum fluoride prices are expected to remain largely stable in the short term.
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