Introduction:
As the pricing for anhydrous hydrofluoric acid (AHF) approaches, market sentiment is characterized by caution. Following last month's pricing, the sulfuric acid market began a sharp upward trajectory, squeezing the profit margins of AHF plants. However, towards the end of the month, the sulfuric acid market eased, with some regions seeing significant declines, dampening the bullish sentiment in the AHF market. Industry participants are now adopting a wait-and-see approach, with expectations that the market will primarily experience catch-up gains in the near term.

Strong Cost Support for Anhydrous Hydrofluoric Acid Cannot Mask Underlying Supply-Demand Imbalance

| Indicator | February | March | Change | % Change | April E | Expected % Change |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Production | 16.6 | 16 | -0.6 | -3.61% | 15.4 | -3.75% |
| Total Supply | 16.6 | 16 | -0.6 | -3.61% | 15.4 | -3.75% |
| Downstream Consumption | 14 | 14.5 | 0.5 | 3.57% | 13.5 | -6.90% |
| Export Volume | 1.8 | 2.4 | 0.6 | 33.33% | 1.3 | -45.83% |
| Total Demand | 15.6 | 16.9 | 1.3 | 8.33% | 14.8 | -12.43% |
| Supply-Demand Gap | 1 | -0.9 | -1.9 | -190.00% | 0.6 | -166.67% |
| Average Price (Period) | 12007 | 12335 | 328 | 2.73% | 14000 | 13.50% |

Looking at the recent supply-demand balance sheet for AHF, the April AHF pricing saw a substantial increase of 1500 yuan/ton. In the short term, supported by the continuous rise in sulfuric acid, it maintains a relatively strong trend, putting continuous upward pressure on costs. In early April, sulfuric acid supply was tight. Some plants, hampered by raw material scarcity and失控 cost bases, either reduced operating rates or shut down. Consequently, April's AHF supply is expected to contract compared to March. Downstream buying sentiment remains cautious, with mixed information flow throughout the month. Most refrigerant-grade acid orders have been finalized, while some new energy orders are hesitant to enter the market due to escalating high prices. Overall domestic demand consumption is also expected to decrease by about 12.43%. While spot market offers continue to climb, and some high-price transactions are concluded, volumes are limited as major orders are already placed. The average AHF price for April is projected to be around 14,000 yuan/ton, up approximately 13.50% from March.

For AHF, the current predicament is the contradiction of high prices coupled with significant profit inversion. Since the end-March pricing, the sulfuric acid market has skyrocketed. From April to date, AHF production costs have risen by 1,611 yuan/ton, a month-on-month increase of about 12.45%. This has deepened the profit inversion, with profits falling by 297 yuan/ton, a month-on-month decline of about 49.17%. This worsening profit outlook intensifies the cost pressure on AHF enterprises, undoubtedly dampening their production enthusiasm. This is particularly evident in Jiangxi and Fujian provinces, where HF plants using high-grade fluorspar-sulfuric acid processes have shifted from high/full operating rates to half/low rates, primarily focusing on fulfilling core contract orders. Enterprises with cost advantages maintain stable production, but overall industry capacity utilization has declined by approximately 2%.

Fluorspar Supply Continues to Recover, Threatening to Break the Tight Supply-Demand Balance

Since the post-holiday period, fluorspar mining companies and processing plants have been gradually resuming operations. Interruptions due to accidents caused inspections in affected and surrounding areas, delaying restarts. By April, large-scale mining and processing plants have largely resumed operations, with capacity utilization expected to rise to around 70%.

Simultaneously, smooth inflows of material from Mongolia are anticipated to increase total supply by approximately 29%. On the demand side, major downstream sectors, impacted by rising sulfuric acid and other bulk raw material costs, are also expected to see declining operating rates, with total downstream demand projected to fall by two percentage points. Given bearish long-term sentiment, enterprises will likely reduce external purchasing in the short term, drawing down some inventories. Downstream inventories are expected to decrease by roughly 20%.

This month, the substantial upward movement in AHF prices at the start of April stimulated fluorspar sellers' price-supportive sentiment to a certain extent. Early in the month, the tug-of-war between supply and demand intensified. Transactions were concentrated in the northern market, with price increases mostly ranging from 50-100 yuan/ton. Bullish sentiment was strong in the southern market. In the Jiangsu-Zhejiang region, supplemented by northern supply, the price center gravitated towards 3500-3550 yuan/ton. In Jiangxi and Fujian, previous high prices were mostly realized, with prices concentrated in the 3500-3550 yuan/ton range. However, downstream enterprises maintain a short-term bullish but long-term bearish outlook. Their overall mindset remains relatively stable. Faced with sellers' attempts to push prices up, they do not show intense anxiety to force prices down. They prefer to offer some room to upstream suppliers while replenishing on a need-to basis, maintaining safe inventory levels and allowing market feedback to develop. Subsequently, as supply increases and long-term bearish sentiment persists, coupled with downstream constraints primarily due to sulfuric acid costs, fluorspar sellers' price-supportive stance has softened. Transaction price centers have begun to trend downwards. Currently, bargaining in Jiangxi and Fujian has shifted to 3450-3500 yuan/ton, down roughly 50 yuan/ton from the start of the month.

Sulfuric Market High and Volatile, Sentiment Somewhat Weakened

The sulfuric acid market began a strong rally after the end-March pricing. Comparing prices from March 25th and April 22nd, sulfuric acid prices in some regions have approached or even surpassed 2,000 yuan/ton, reaching unprecedented highs. While driven primarily by rising sulfur prices, demand-side factors were also significant. Spring fertilizer preparation created rigid demand (phosphate fertilizers account for about 25% of sulfuric acid demand). Simultaneously, demand from new energy sectors like lithium iron phosphate grew by over 35%, and industries like titanium dioxide maintained high operating rates. Strong cost support, a tight supply-demand balance, and tightening policies collectively propelled the sulfuric acid market higher.

Anhydrous Hydrofluoric Acid Aims for New Highs, Intensifying Internal Competition Pressure

AHF pricing has now risen for five consecutive months since the end of 2025, with a cumulative increase of 2,100 yuan/ton. A further uptick is possible in May due to catch-up effects. The sulfuric acid market has recently eased due to weakening demand and an export ban scheduled for May. However, sulfuric acid has already reached and held firm at high levels. Even if it declines later, the range is likely limited, and the earlier significant gains cannot be ignored. In Fujian province, for example, sulfuric acid prices surged by 940 yuan/ton between December 2025 and April 2026. Sulfuric acid continues to drive AHF prices upward, with a correlation coefficient of 0.83 in Q1 2026.

The average AHF market price for April is around 14,000 yuan/ton, and expectations for continued upward movement in May remain. However, with high AHF prices yet unfavorable profit margins, the key to breaking the impasse in the current industry overcapacity situation lies in a dual-drive approach of cost and technology. Since 2026, domestic AHF production capacity has exceeded 4 million tons. Enterprises with advantages in sulfuric acid or fluorspar account for 18.65% and 32.86% of this capacity, respectively. Furthermore, the phosphorous-fluorine co-production fluorsilicic acid process holds absolute cost advantages, representing 20.76% of total capacity. The cautious steps taken by enterprises highlight the path forward for the AHF industry: from the cost perspective, it involves resource breakthroughs, process substitution, and regional relocation; from the technology perspective, it involves high-end, specialized, and circular applications; from the industrial perspective, it involves integration through mergers, acquisitions, joint ventures, and collaboration.

The overcapacity in the AHF sector is a structural and periodic issue, not a sign of demand exhaustion. While enterprises need to cultivate their own driving forces, the future holds objective prospects in new energy and new materials sectors.