Price trend

Last week, domestic fluorite prices remained largely stable. As of the end of the week, the average domestic fluorite price was 3,406.25 RMB/ton, unchanged from the beginning of the week, and down 5.48% year-on-year.

Supply side: Fluorite spot supply was normal, and inventory remained high

The domestic fluorite industry still faced ongoing challenges and competition. Overall, there had been little change in the operating rates of enterprises. Upstream mining remained tight, with outdated mines continuing to be phased out. Regarding new mines, mineral exploration work remained difficult, and coupled with the government's efforts to rectify fluorite mines, fluorite mining companies faced increasingly stringent safety and environmental requirements. This had increased the difficulty of operating fluorite mines. However, the supply of fluorite on the market was normal, and social inventories remained high with no significant signs of depletion. The supply side maintained a stable production pace, and production activities tended to slow down before the end of the year, leading to a reduction in the scale of replenishment. Recently, downstream purchasing had been inactive, and fluorite shipments had been average, resulting in a generally stable fluorite market trend.

Demand side: Hydrofluoric acid prices remained stable, and the refrigerant market was general

Last week, domestic hydrofluoric acid prices remained stable, with mainstream negotiated prices in various regions of China ranging from 12,000 to 12,500 RMB/ton. Some downstream hydrofluoric acid plants remained shut down, resulting in little change in the supply of hydrofluoric acid. Manufacturers primarily purchased hydrofluoric acid on an as-needed basis, and overall production remained at slightly over 50%. Hydrofluoric acid companies maintained orders based on immediate needs and were operating at a loss. Recently, hydrofluoric acid traders had not been actively purchasing. The fluorite market was experiencing intense competition between supply and demand, resulting in a stalemate of "prices without transactions." Despite the traditional stocking period for downstream industries such as refrigerants, the high prices had suppressed purchasing demand, thus affecting the consumption rate of upstream raw materials. Consequently, fluorite prices remained largely unchanged.

The terminal market for refrigerants remained generally stable. With supportive policies in the refrigerant industry, demand is expected to see a substantial increase. Fluorochemical companies operating within the quota system were confident in maintaining high prices for refrigerants. However, the high prices were leading to a slower pace of purchasing, with downstream channels primarily focusing on meeting immediate needs. Industry inventory has fallen to its lowest level in nearly two years. On the supply side, the quota system and the highly concentrated market structure continued to support market confidence, but there was still a cautious attitude towards upstream procurement. The fluorite market price remained largely stable.

Besides the traditional demand from the refrigerant industry, fluorite, as an important mineral raw material for modern industry, is experiencing growing demand in emerging fields. It is also used in strategic emerging industries such as new energy and new materials, as well as in defense and nuclear industries. Applications include lithium hexafluorophosphate, PVDF, graphite anodes, and photovoltaic panels. With demand driven by the new energy and semiconductor sectors, the application of fluorite is receiving significant support.

Market Outlook:

Recently, domestic fluorite supply has been difficult to improve, with some mines suspending production for safety inspections. The tight supply of fluorite is a positive factor supporting the fluorite market, but spot inventories of fluorite are high, and downstream hydrofluoric acid companies are mainly purchasing on demand. There has been no actual improvement in demand.  Given the intense interplay between supply and demand, the fluorite market price is expected to fluctuate in the short term.

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