SMM, March 19: This week, Chinese aluminum fluoride enterprises mainly focused on order deliveries, with aluminum fluoride prices holding steady. As of now, SMM aluminum fluoride prices closed at 10,180-10,450 yuan/mt; cryolite prices also held steady, with SMM cryolite quoted at 7,000-8,500 yuan/mt. Raw material side: Prices of key raw materials for aluminum fluoride continued to rise. Specifically, the delivery-to-factory price of 97% fluorite powder remained stable, currently concentrated in the range of 3,150-3,450 yuan/mt. During the Two Sessions, mining at northern mines was restricted, leading to a temporary tight supply of fluorite raw ore; some beneficiation plants showed strong sentiment to hold prices firm due to relatively low inventory levels, and downstream hydrofluoric acid enterprises slightly recovered in operating demand after resuming work following the holiday. SMM expected fluorite prices to hold up well in the short term. Aluminum hydroxide prices edged up steadily, with the current SMM weighted average price at 1,673 yuan/mt, up 1.52% WoW. The sulphuric acid market remained firm, and prices continued to rise amid higher costs, tightening supply, and strong demand. Overall, the raw material side of aluminum fluoride moved higher, and production pressure on enterprises increased significantly. Supply side showed a pattern of rigid cost increases, deeply pressured profitability, and weak willingness to operate. Recently, prices of key raw materials such as fluorite, sulphuric acid, and aluminum hydroxide continued to rise, significantly pushing up aluminum fluoride production costs. The industry was caught in a squeeze from both costs and selling prices, with enterprises generally operating at a loss. Production enthusiasm was hit hard, overall industry operating rates remained in the doldrums, and actual supply increases were limited. On the demand side, operating aluminum capacity downstream remained stable, forming a rigid demand base for aluminum fluoride; however, enterprises mainly restocked for rigid demand and purchased as needed, with cautious procurement and insufficient demand elasticity to boost prices. Brief comment: This week, prices of key raw materials such as fluorite and sulphuric acid held up well, and the cost side continued to rise, significantly increasing production pressure on enterprises; in March, the aluminum fluoride tender price of a downstream benchmark enterprise was finalized, down 200-370 yuan/mt MoM, and the spot market also moved in the doldrums under its guidance. At present, the industry is facing a two-way squeeze of rising costs and selling prices under pressure, narrowing profit margins and dampening production enthusiasm. Fundamentally: Cost side: fluorite and sulphuric acid prices remained firm, providing clear bottom support for aluminum fluoride. Supply side: industry operating rates stayed in the doldrums, with no significant increase in production, and overall supply and demand remained subdued. Demand side: rigid demand from aluminum remained stable, but there was no obvious incremental growth, and procurement was mainly as needed. Overall, the strong support effect from fluorite and sulphuric acid on the cost side became more prominent, coupled with low industry operating rates and shrinking supply. Aluminum fluoride's price center is expected to move steadily higher next month, showing a mild strengthening trend. Going forward, close and continuous attention should be paid to dynamic changes on the raw material cost side, as well as marginal adjustments in the procurement pace of downstream aluminum enterprises.

SMM News, March 19: SHFE aluminum 2603 fluctuated downward in early trading, with the price center falling sharply from the previous trading day. Affected by the decline in aluminum prices, overall purchasing sentiment rose today. Sellers held prices firm, and today’s market mainstream quotations and transaction prices were mainly concentrated around the average price to +10 yuan/mt. Today, the shipment sentiment index in east China was 3.24, up 0.08 MoM; the purchasing sentiment index was 3.16, up 0.13 MoM. Today, SHFE aluminum futures prices extended losses, and buying sentiment in the central China market was strong. Traders and downstream processing enterprises were both bullish and tended to purchase at low prices with moderate stockpiling. Meanwhile, suppliers showed a strong willingness to hold prices firm, and transaction premiums showed no sign of weakening. In the end, quotations in the central China market were mainly concentrated at premiums of 10-40 yuan over the central China price, while actual transaction prices were mainly concentrated at premiums of 20-30 yuan over the central China price. Today, the shipment sentiment index in the central China market was 2.59, flat MoM; the purchasing sentiment index was 2.43, up 0.01 MoM. Inventory side, aluminum ingot inventory in major consumption regions increased by 3,000 mt MoM today, with inventory buildup seen across all three regions. In the short term, aluminum ingot inventory continued seasonal inventory buildup after the Chinese New Year. Affected by bullish sentiment, premiums are expected to remain on a narrowing trend.

[SMM Cast Aluminum Alloy Morning Comment: Overnight Aluminum Futures Closed Lower, Spot Cargo Under Short-Term Pressure] On Wednesday, the ADC12 market generally showed a downward trend, with mainstream producers broadly lowering quotes by 100 yuan/mt. This price adjustment was mainly driven by the pullback in aluminum prices, which weakened cost support. Enterprises accordingly adjusted their quotes in line with market changes, but the overall magnitude of the adjustment remained relatively restrained, indicating a rather cautious market sentiment.

[Macro Pressures Combined With High Inventory, SHFE Aluminum Remained Under Pressure at Elevated Levels in the Short Term] Continued destocking in LME inventory provided bottom support for LME aluminum, but amid tightening fund liquidity and profit-taking by bulls, upward momentum was insufficient, and the backwardation structure weakened somewhat. In China, social inventory rose to a high for the same period in nearly five years, and the inventory buildup cycle had not ended. High inventory and weak spot fundamentals jointly weighed on upward momentum. The divergence between domestic and overseas drivers continued, the SHFE/LME price ratio kept weakening, and SHFE aluminum fell below the key threshold of 25,000 yuan/mt, remaining mainly under pressure at elevated levels in the short term.

[Weak Market Sentiment Weighed on Both Spot Silicon Metal and Polysilicon Prices]: This week, the silicon metal market moved lower after a stalemate, with weak market sentiment, some downstream procurement demand released, and cautious trading sentiment. SMM east China oxygen-blown #553 silicon stood at 9,000-9,200 yuan/mt, down 100 yuan/mt WoW. At the beginning of the week, silicon metal market prices remained in a stalemate, while the most-traded contract fluctuated around 8,550-8,750 yuan/mt, with downstream procurement mainly focused on factory cargoes. Later, affected by macro factors and capital sentiment, futures prices declined continuously and closed at 8,285 yuan/mt on Thursday. As spot-futures traders' price advantages became apparent, shipments increased, downstream procurement sentiment diverged, and the market saw transactions based on immediate needs.

The current domestic rhenium spot market in China is characterized by differentiation across the industrial chain, two-way supply-demand game, and high-level consolidation. Overall market conditions are jointly driven by multiple factors, including macro investment sentiment, inventory restocking cycles, overseas supply chain risks, and domestic fundamental supply and demand. I. Upstream: Stable Price Range, Accelerated Shipments Major domestic upstream rhenium producers maintain stable raw material quotations, with the mainstream price range around 28,000. Only a small number of suppliers offer prices as high as around 30,000, forming a clear tiered price structure without major fluctuations. Recently, upstream producers have shown stronger willingness to sell, with a notable increase in shipment frequency. II. Midstream: Scheduled Production, Low Acceptance of High-Priced Ammonium Perrhenate Midstream refineries and rhenium processors are currently operating under scheduled production. Order deliveries are concentrated, with most manufacturers scheduled to fulfill orders in March and April.In terms of cost control and purchasing sentiment, midstream processors generally show low acceptance of high-priced ammonium perrhenate. Buyers tend to negotiate rationally and resist chasing high prices, which directly caps the upward room for ammonium perrhenate prices. III. Downstream: Cooling Investment Sentiment, Steady Recovery in Industrial Demand Downstream demand exhibits significant structural divergence between investment demand and industrial demand, which has become the key factor affecting short-term market sentiment. On the one hand, previously active investment demand has cooled, accompanied by panic selling among retail investors. Increasing low-price sell-offs have emerged in the market as holders offload at discounted prices to accelerate capital turnover, weighing on short-term spot transaction prices. On the other hand, industrial demand has steadily recovered and maintained growth. As the core rigid support for rhenium, the recovery of industrial demand provides a solid fundamental floor, offsetting part of the negative impact from investment-driven sell-offs. IV. Market Outlook Based on the macro environment and industrial supply-demand fundamentals, the domestic rhenium market is in a balanced game between bullish and bearish factors, keeping prices in high-level consolidation. Short-term Outlook Affected by the international macro environment, investment enthusiasm in the energy sector remains high, diverting capital away from non-ferrous metals. The overall weakening investment sentiment in the non-ferrous sector has spilled over to the niche strategic metal rhenium, suppressing investment demand.In addition, most market participants completed phased restocking around the Spring Festival, leaving inventories at relatively sufficient levels. As a result, raw material prices lack upward momentum, with limited room for significant gains in the short term. Long-term Outlook Geopolitical competition over critical minerals is intensifying. Progress in critical minerals negotiations between the U.S. and Chile, along with rising exclusive cooperation in global critical minerals supply chains, has reduced the stability of overseas ammonium perrhenate import channels and raised external supply risks.The expected tightening in ammonium perrhenate supply will provide strong support to market prices.