SunSirs: Domestic Fluorite Prices Fell Slightly in July

Price trend

In July, the domestic fluorite price trend declined slightly. By the end of the month, the average domestic fluorite price was 3,137.5 RMB/ton, down 0.40% from 3,706.25 RMB/ton at the beginning of the month and down 12.63% year-on-year.

Analysis review

Supply Side: Operations Maintained, Fluorite Spot Supply Was Normal

The domestic fluorite industry remained competitive, with overall operating rates increasing. Upstream mining was strained, and outdated mines will continue to be eliminated. For new mines, mineral surveys remained challenging. Furthermore, with national authorities requiring rectification of fluorite mines, fluorite mining companies faced increasingly stringent safety and environmental protection requirements, making it more difficult to resume operations. Raw material shortages had limited fluorite operations. However, with rising temperatures, northern companies had gradually resumed operations, increasing supply from on-site fluorite companies. Inactive purchasing led to relatively ample spot supply, resulting in rising on-site fluorite inventories. Fluorite market prices declined slightly in July.

Demand Side: Hydrofluoric Acid Prices Declined, Refrigerant Market Remained Positive

Domestic hydrofluoric acid prices declined in July, with the mainstream negotiated price across various regions ranging from 10,500 to 11,000 RMB/ton. Some downstream hydrofluoric acid plants remained shut down, leaving little change in spot hydrofluoric acid supply. Manufacturers primarily purchased on-demand, with overall hydrofluoric acid utilization remaining at around 50%. Hydrogen fluoride companies maintained strong demand, while operating at a loss. They were not actively purchasing fluorite as raw material, leading to a wait-and-see attitude among downstream merchants. Due to sluggish demand, both buyers and sellers had weak market expectations. Manufacturers' suggested prices for hydrofluoric acid remained low in August, and fluorite prices fluctuated due to this news.

The downstream refrigerant market remained relatively healthy. With policy support at the refrigerant industry's end-users, demand is expected to substantially increase. Fluorine chemical companies remained confident in maintaining refrigerant prices within quota control. While purchasing was slow given the high prices, industry inventories were being transmitted in a healthy and orderly manner. Due to high prices, end-users were less motivated to stock up, primarily purchasing upstream products on an on-demand basis. Refrigerant market trends were generally average, and fluorite market prices remained low.

In addition to the traditional demand of the refrigerant industry, fluorite, as an important mineral raw material in modern industry, has continuously developed demand in emerging fields. It is also used in strategic emerging industries such as new energy and new materials, as well as defense, nuclear industry and other fields, including lithium hexafluorophosphate, PVDF, graphite negative electrode, photovoltaic panels, etc. With the demand driven by new energy and semiconductor fields, the application of fluorite has received certain support.

Market outlook

The supply of domestic fluorite ore has been difficult to improve recently, and some mines have stopped production for safety inspections. The tight supply of fluorite ore is a positive support for the fluorite market, but some regions are not actively purchasing fluorite, which has led to an increase in inventory. In addition, the downstream has a serious resistance to high prices. Hydrofluoric acid companies mainly purchase on demand, and demand has not actually increased. In addition, the market price of hydrofluoric acid remains low. Overall, the fluorite market price will be mainly volatile in the short term.

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