Costs Rise, Profits Hard to Come By; Industry Stands Firm on Quotes Awaiting Further Results [SMM Fluoride Salts Weekly Review]

SMM March 20 News: This week, aluminum fluoride enterprises mainly focused on delivering orders, with trading conditions remaining sluggish. Aluminum fluoride prices were largely stable, with SMM aluminum fluoride prices closing at 9,900-10,300 yuan/mt and SMM cryolite prices at 6,500-7,500 yuan/mt. From the perspective of raw material supply, the overall fluorite market was largely stable this week. The delivery-to-factory price of 97% fluorite powder, a key raw material for aluminum fluoride production, remained within the price range of 3,500-3,800 yuan/mt. Due to stricter environmental and safety requirements, fluorite mining has been restricted, and the tight supply situation is unlikely to improve in the short term. Downstream demand remains rigid, with no significant growth. Currently, fluorite powder prices are still at a high level, and downstream enterprises are cautious in procurement. SMM expects that fluorite powder prices will continue to fluctuate at a high level in the short term. According to the latest SMM data, the current average delivery-to-factory price of 97% fluorite powder is 3,625 yuan/mt, which is largely stable compared to last Thursday. Additionally, aluminum hydroxide prices turned downward this week, with SMM data showing that the ex-factory average price of aluminum hydroxide was 2,092 yuan/mt, down 4.26% from last Thursday. Given the tight supply of sulphuric acid, which is unlikely to ease in the short term, and with cost support at a high level, sulphuric acid prices may continue to rise. Overall, the aluminum fluoride raw material market is trending upward, providing some support to aluminum fluoride prices. Enterprises are squeezed by both weak market confidence and rising raw material costs, leading to a continuous narrowing of profit margins, and the industry's operating rate remains low. To reduce operational risks, some enterprises have chosen to cut capacity, maintaining only basic supply through long-term contracts. On the demand side, the demand from aluminum smelters is currently in a slow release phase, which is expected to drive an increase in downstream demand for aluminum fluoride. Brief comment: This month, the tender prices of benchmark downstream enterprises all fell below 10,000 yuan, coupled with the continuous rise in the raw material market, the production pressure on aluminum fluoride enterprises is increasing, and the industry's losses are growing. In response, some enterprises have reduced production, leading to a continuous compression of industry supply. Recently, the purchasing sentiment of downstream enterprises has increased, and there has been a slight release of demand. This week, aluminum fluoride enterprises showed a strong sentiment to stand firm on quotes. According to SMM, the expected price of aluminum fluoride enterprises is around 11,500 yuan/mt, but downstream enterprises still have a mindset of pressing for lower prices. SMM expects that next month, aluminum fluoride prices may turn from falling to rising, with the specific increase depending on the final market bargaining results.

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