This week, the tender price for aluminium fluoride by leading downstream benchmark enterprises was finalised, and aluminium fluoride prices declined somewhat. As of now, SMM aluminium fluoride prices closed at RMB 10,180-10,450 per tonne; cryolite prices also weakened, with SMM cryolite quotes at RMB 7,000-8,500 per tonne.

Raw material side: Prices of key raw materials for aluminium fluoride rose slightly. Specifically, the delivery-to-factory price of 97 per cent fluorite powder edged up, currently concentrated in the RMB 3,150-3,450 per tonne range. During the Two Sessions, mining in northern mines was restricted, leading to a phased tightness in raw ore supply of fluorite; some beneficiation plants, with relatively low inventory levels, showed strong sentiment to hold prices firm. Coupled with a slight recovery in demand as downstream hydrofluoric acid enterprises resumed operations after the holiday, SMM expects fluorite prices to hold up well in the short term. Aluminium hydroxide prices rose slightly amid stability, with the SMM weighted average price at RMB 1,629 per tonne, up 1.12 per cent M-o-M. The sulphuric acid market remained strong; with rising costs, tightening supply, and robust demand, sulphuric acid prices continued to rise. Overall, raw material prices for aluminium fluoride all moved higher, and enterprises’ production pressure increased significantly.

Supply and demand side: In terms of supply, after the holiday, some previously suspended enterprises in China’s aluminium fluoride industry successively prepared to resume production. There were certain expectations for a recovery on the supply side, but rising raw material prices compressed profit margins, cooling enterprises’ willingness to resume production. Overall operating rates remained in the doldrums, and the actual supply increase was limited. In terms of demand, operating aluminium capacity downstream remained stable, providing a rigid demand base for aluminium fluoride; however, enterprises mainly restocked for rigid needs and purchased as needed, with cautious procurement. Demand lacked elasticity and was unable to boost prices.

Brief commentary: Currently, raw material prices such as fluorite and sulphuric acid are trending strong. The rise in raw materials during the week brought significant production pressure to enterprises; moreover, at the beginning of the week, the March tender price of benchmark enterprises was set, down RMB 200-370 per tonne M-o-M, and market prices were subsequently adjusted downward under its guidance. Rising raw material costs increased production pressure, while the decline in downstream tender prices suppressed selling prices. Enterprises’ profit margins were squeezed from both sides, dampening production enthusiasm. Overall, on the cost side, strong fluorite and sulphuric acid provided bottom support; on the demand side, rigid demand from aluminium remained stable but without incremental growth; on the supply side, operating rates stayed in the doldrums with no significant increase in output. In addition, with the tender price already settled, the market lacked momentum for wild swings. SMM expects aluminium fluoride prices to mainly run steadily in the short term. Going forward, close attention should be paid to marginal changes in raw material costs on the cost side, as well as marginal adjustments in the procurement pace of downstream aluminium enterprises.

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.