SMM, February 27:
Recently, the aluminum fluoride market has remained sluggish, with enterprises primarily focusing on delivering orders on hand. Market participants are closely monitoring the tender prices of benchmark enterprises for the upcoming month. Against this backdrop, aluminum fluoride prices have remained stable. As of now, SMM aluminum fluoride prices are reported at 10,600-11,200 yuan/mt, while SMM cryolite prices are quoted at 6,500-7,200 yuan/mt.
Cost side, the fluorite market has been stable, with the delivery-to-factory price of 97% fluorite powder required for aluminum fluoride production remaining in the range of 3,450-3,800 yuan/mt. In north China, cold weather has increased the difficulty of fluorite mining, limiting output. Overall, the recovery progress of domestic fluorite powder supply has fallen short of expectations, making it difficult to meet potential market demand growth. Coupled with the continued strength of the sulphuric acid market, rising costs have directly impacted the hydrogen fluoride market, further influencing fluorite powder prices. SMM expects fluorite powder prices to rise slightly next month. According to SMM data, the current average delivery-to-factory price of 97% fluorite powder is 3,617 yuan/mt, flat MoM. Meanwhile, aluminum hydroxide prices have rebounded after hitting bottom recently, showing a slight upward trend. SMM data indicates that the ex-factory average price of aluminum hydroxide is 2,166 yuan/mt, up 1.36% MoM. This change has provided cost-side support for aluminum fluoride, offering a strong factor for price stability.
Supply side, due to weak market confidence, enterprises have made phased adjustments to operations, resulting in an overall low operating rate. Under the dual pressure of high costs and low-price market competition, enterprises have adopted cautious production strategies. However, with rising raw material prices and gradually improving market sentiment, some enterprises are expected to increase production enthusiasm, which may drive operating rates to rebound. Demand side, the current demand from aluminum smelters is slowly being released, theoretically supporting downstream demand growth for aluminum fluoride. However, downstream enterprises continue to adopt a purchasing-as-needed strategy, leading to a slow demand growth process that is insufficient to fundamentally reverse the weak downward trend in the aluminum fluoride market. Although there is some potential for demand growth, the weak market pattern is expected to persist in the short term.
Brief Comment: Overall, aluminum fluoride prices in March are expected to recover slightly due to rising costs of raw materials such as fluorite powder and sulphuric acid. However, from a long-term perspective, the significant cost decline of aluminum hydroxide in the earlier period and the lack of downstream demand growth make it difficult to fundamentally change the short-term weak downward trend in the aluminum fluoride market. Nevertheless, as raw material cost support strengthens and enterprise production and market sentiment improve, the downside room in the market may gradually narrow. This suggests that while short-term price pressure remains, recovery signs may emerge in the future, and market dynamics are likely to stabilize.
