Cost pressure continued to Intensify, June aluminium fluoride tender price cut implemented

This week, the aluminium fluoride tender price from downstream benchmark enterprises was finalised, and aluminium fluoride prices declined. As of now, SMM aluminium fluoride prices closed at RMB 11,280-11,700 per tonne; cryolite prices remained stable, with SMM cryolite quoted at RMB 7,000-8,500 per tonne.

Raw material side: This week, China's 97 per cent fluorite wet powder market remained stable, with mainstream delivered transaction prices concentrated at RMB 3,100-3,400 per tonne, 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 a 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 the overall market trading atmosphere was sluggish. Affected by weak raw materials and insufficient end-use demand, the hydrofluoric acid market price centre 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 aluminium hydroxide market held up well within a narrow range, with SMM aluminium hydroxide weighted average price at RMB 1,656 per tonne, up 0.3 per cent W-o-W. 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, aluminium fluoride's main raw materials were generally stable with slight rise. Rising aluminium hydroxide and sulphuric acid prices drove the industry's comprehensive cost centre 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 aluminium 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 per cent, with limited effective incremental supply. Demand side, downstream operating aluminium capacity remained stable at high levels, providing rigid floor demand for aluminium fluoride, but aluminium 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 centre rose, enterprise profit margins continued to be squeezed, and sustained losses dampened production enthusiasm. On the demand side, downstream aluminium enterprises still maintained just-in-time procurement. Within the week, the June benchmark aluminium fluoride tender price was officially finalised, down RMB 200-220 per tonne W-o-W.

Driven by the tender price reduction, market transaction price centre 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 the downstream aluminium enterprise procurement pace.

Note: This article has been issued by SMM and has been published by AL Circle with its original information without any modifications or edits to the core subject/data.