【Introduction】As mid-October arrives, the fluorite market remains relatively passive. Both supply and demand are being pulled by multiple factors, leading to subdued participation from industry players. As downstream supply-demand dynamics fluctuate, wait-and-see sentiment deepens further.
Rising Production and Transportation Costs Strengthen Sellers’ Resolve to Maintain Prices
Currently, there is a divergence in performance between northern and southern markets, particularly noticeable in the north. Earlier, Mongolia experienced a "fuel shortage," resulting in long queues at gas stations, rationed fuel sales, and oil prices hitting historical highs. For fluorite mining enterprises, most production equipment—such as excavation drills, vehicles, and crushing/grinding machinery—is diesel-powered. Some companies also rely on self-generated power via diesel generators. Consequently, the fuel shortage directly led to reduced shipment volumes for fluorite miners and increased transportation costs.
Additionally, as the weather cools down recently, production and labor costs for fluorite enterprises have risen again. Expenses related to cold-weather protection in underground or open-pit mines, workshop heating, pipeline freeze prevention, and low-temperature allowances have further pushed up production costs. Holders of inventory are reluctant to sell, and the sentiment to maintain high prices is strong, providing firmer bottom support for price quotes. However, the pass-through of these cost increases ultimately depends on the absorption capacity of downstream hydrofluoric acid plants. Current market procurement operations remain largely driven by essential needs, with opportunistic purchases made when prices dip slightly.
Major Downstream Plants in the North Have Not Yet Resumed Operations; Essential Consumption of High-Quality Supplies Continues to Support the Market
Most producing enterprises are currently operating at medium-to-high loads. Since July this year, many small and medium-sized anhydrous hydrofluoric acid (AHF) producers and captive-use plants have increased their operating rates. The opening of supply gaps has allowed some previously underutilized plants to maintain steady monthly operations. Overall, the market still exhibits a tight supply situation, presenting a paradoxical scenario of "nominal surplus but effective scarcity."
The shutdown of low-cost, large-capacity units has not only effectively boosted AHF prices, keeping them running at high levels, but also stimulated the consumption of high-quality fluorite concentrate. This provides solid bottom support for the price of high-quality fluorite concentrate.
Sulfuric Acid Prices Rise Step-by-Step, Continuously Squeezing Fluorite Margins
Since the pricing of anhydrous hydrofluoric acid was set in October, the sulfuric acid markets in Jiangxi and Fujian provinces concluded their pre-holiday strategy of destocking at low prices. Smooth destocking during the holiday period meant that post-holiday price increases fully offset the earlier declines. Simultaneously, concentrated maintenance shutdowns of sulfuric acid units occurred across Anhui, Henan, Shandong, Zhejiang, and other regions, reducing regional supply and providing strong support to local markets.
Overall, current downstream demand has not seen a substantial recovery. Market trends are primarily influenced by supply factors arising from maintenance activities, leading to significant speculative trading sentiment. It is expected that the domestic sulfuric acid market will continue to exhibit regional differentiation in the short term.
Comments
0