In March, due to the impact of sufficient supply and weak cost support, aluminium fluoride prices remained under pressure and continued to decline. During the month, SMM's aluminium fluoride price closed at RMB 10,180-10,450 per tonne, while the cryolite market also showed overall weakness, with SMM's cryolite price at RMB 7,000-8,500 per tonne.

On the raw material side, fluorite prices in China fluctuated upwards in March. On the supply side, due to safety accidents in key production areas, industry-wide safety and environmental inspections remained stringent, broader, and more rigorously enforced. The operational rates of mines and processing plants in key southern China decreased significantly, resulting in a substantial supply contraction and structural downturn. Operators generally slowed sales and maintained stable prices, while available stock remained tight. On the demand side, downstream hydrogen fluoride operators resumed full operations and production after the holidays. Purchasing based on usage continued to recover, and purchasing enthusiasm increased. Furthermore, the sharp rise in hydrogen fluoride prices in April facilitated a smooth cost pass-through and increased downstream acceptance of high fluorite prices, further supporting strong fluorite pricing. Considering these factors—tighter supply and recovering demand—fluorite prices are expected to perform strongly. With smooth cost transfers, SMM expects fluorite prices to remain strong in the short term. According to SMM data as of March 31, the average factory-gate price of 97 per cent fluorite powder was RMB 3,325 per tonne, a 1.53 per cent increase from February 27. For aluminium hydroxide, another key raw material for aluminium fluoride, the market was boosted by continuously rising alumina prices, leading to a continuous increase in aluminium hydroxide prices. As of March 31, the average factory-gate price of aluminium hydroxide tracked by SMM was RMB 1,713 per tonne, a 6.07 per cent increase from February 27. Furthermore, in the sulphuric acid market, geopolitical conflicts in the Middle East caused sulphur, a key raw material, to surge. Sulphur prices jumped more than 40 per cent in March, directly contributing to a significant increase in sulphuric acid prices. Overall, the three main raw materials – fluorite, aluminium hydroxide, and sulphuric acid – all saw price increases in March. And the rapid increase in the cost of aluminium fluoride raw materials has provided significant support to the price of aluminium fluoride.

On the supply side, the market has been in a negative cycle due to rising fixed costs, heavily squeezed profits, and weak operational willingness. Since March, the prices of key raw materials such as fluorite, sulphuric acid, and aluminium hydroxide have risen broadly, directly and significantly increasing the cost of aluminium fluoride production. Industry profit margins have continued to contract, with most operators operating at losses. Production enthusiasm has been significantly impacted, and overall industry utilisation rates have continued to decline. Entering April, although market prices have risen somewhat, operators continue to face cost pressure amid expectations of further rising raw material prices and continued low utilisation rates. On the demand side, downstream aluminium production capacity remains relatively stable, supporting solid demand for aluminium fluoride. However, in March, the market was primarily driven by urgent stock replenishment and on-demand purchasing. Looking ahead to April, the support from stable demand in the aluminium industry is expected to remain, and overall demand is projected to remain stable.

Summary: Earlier this month, official April auction prices from downstream aluminium manufacturers were finalised. Bids showed a broad upward trend, increasing by RMB 770-800 per tonne from the previous month, with final prices ranging from RMB 10,980-11,050 per tonne. Currently, raw material prices such as fluorite and sulphuric acid continue their upward trend, providing strong support to aluminium fluoride prices. On the supply side, due to persistently high production costs, manufacturers have limited production incentives, and the incremental supply in the market is constrained. On the demand side, there has only been a slight recovery from stock replenishment to meet the stable demand of the aluminium industry, without any clear positive catalysts. Overall, cost-related support remains strong, supply is tight, while demand remains stable. Following the clarification of auction prices, aluminium fluoride prices generally increased by around RMB 800 per tonne in line with this trend. Moving forward, changes in raw material costs and downstream purchasing adjustments should be closely monitored. 

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. 

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