SMM January 15 News:
This week, domestic aluminum fluoride enterprises focused on fulfilling orders, and aluminum fluoride prices remained stable. As of now, the SMM aluminum fluoride price closed at 10,750-11,060 yuan/mt; cryolite prices also held steady, with the SMM cryolite quotation at 7,000-9,000 yuan/mt.
Raw material side: Prices of core raw materials for aluminum fluoride showed divergent trends, with overall cost support weakening somewhat. Specifically, the delivery-to-factory price for 97% fluorite powder remained in the range of 3,100-3,400 yuan/mt. Market trading activity continued sluggish this week, and prices were mainly stable. Currently, hydrofluoric acid enterprises are under profit pressure, resulting in low purchase willingness for fluorite powder, and most maintained low inventory operation modes. Coupled with traders' high inventory levels from earlier periods and an urgent need to reduce prices to recoup funds, along with intensified market competition from imported supplies, fluorite powder prices still face downward pressure in the short term. Aluminum hydroxide prices continued their downward trend, with the SMM weighted average price reported at 1,643 yuan/mt, down 1.38% MoM, dragging on the aluminum fluoride cost side. The sulfuric acid market, however, maintained high fluctuations, providing some support to aluminum fluoride costs. Overall, while aluminum hydroxide prices keep weakening, and fluorite powder and sulfuric acid prices mainly fluctuate rangebound, leading to marginal loosening of cost support for aluminum fluoride; rigid costs from raw materials still exist, limiting the room for enterprise profit recovery.
Supply and demand side: Supply side, synchronized declines in raw material prices alleviated some cost pressure for enterprises, and overall production conditions improved somewhat. However, constrained by strict environmental protection and energy consumption policies, the industry's overall supply increase is limited. Demand side, downstream operating aluminum capacity remained basically stable, providing solid rigid demand support for aluminum fluoride, but enterprises maintained cautious procurement attitudes, mainly restocking as needed.
Brief comment: Although the cost side weakened marginally, alleviating production pressure for enterprises to some extent, overall costs still fluctuate at highs, continuously limiting enterprise profit margins. Current aluminum fluoride prices are in the order execution phase following the previous broad increases, with sluggish market trading activity and insufficient actual transaction volumes. Short-term, stable downstream aluminum capacity provides a floor for rigid demand, but the procurement side continues a cautious, as-needed restocking pace; coupled with marginally loosening support from raw material costs, under the constraint of multiple factors, aluminum fluoride prices are expected to fluctuate rangebound. Subsequently, close attention should be paid to dynamic changes in raw material costs and adjustments in downstream procurement pace.
