Introduction: The price of anhydrous hydrofluoric acid continued to decline in August. The supply and demand relationship is difficult to support the market under the influence of the off-season. However, the current production costs remain high, and enterprises are generally upside down and under pressure. It is difficult to find positive market conditions in the short term, and we still need to wait for the demand side to boost.
The anhydrous hydrofluoric acid market continued to be weak in August, with the average price of delivery falling by 2.94% month-on-month and rising by 13.34% year-on-year. Under the influence of the traditional off-season, the supply and demand relationship is unlikely to provide favorable support for prices. With costs remaining high, anhydrous hydrofluoric acid companies continue to be inverted, facing increasing challenges and obvious market competition.
Under the influence of the traditional off-season, the supply and demand relationship is difficult to support the market.
From July to August, the fluorine chemical market gradually entered the off-season, the production demand of downstream refrigerant plants decreased, the load generally declined, and enterprises gradually entered the maintenance season. From the perspective of operation, the operation rate of the refrigerant R32 market dropped from 61% at the beginning of June to 51% in mid-August; the operation rate of the R134 market dropped from 55% at the beginning of June to around 50% in mid-August. The operation load of the downstream industry declined, and the demand for anhydrous hydrofluoric acid also decreased simultaneously. At the beginning of the month, the bidding of large downstream factories was mostly based on actual demand, and the overall usage was reduced. On the supply side, due to the reduction in demand, the operation rate of anhydrous hydrofluoric acid production enterprises also declined, gradually from 61% at the beginning of June to around 53% in mid-August. Supply and demand decreased simultaneously, the negative impact on the demand side was strong, the bidding prices of large downstream factories declined at the beginning of the month, and the overall market was weak.
Production costs are high, and enterprises are under pressure and continue to be inverted
The price of anhydrous hydrofluoric acid and the current situation of high costs are playing against each other. Production enterprises are under pressure to ship goods, and their mentality is not good. From the perspective of raw materials, the price of fluorite powder has fluctuated and declined along with the price of anhydrous hydrofluoric acid, with a drop of 9.54% from the beginning of June to mid-August; while for sulfuric acid, driven by demand, the price has continued to rise, with a 45.29% increase from the beginning of June to mid-August. According to the production cost data calculated by the production model, the production cost of anhydrous hydrofluoric acid has dropped by 3.62% from the beginning of June to mid-August. Although the cost has decreased, the price has also declined simultaneously. Anhydrous hydrofluoric acid companies are still hanging. As of mid-August, the product profit margin was -4.42%. The pressure on companies has not decreased, and the pressure to ship is also increasing.
It is expected that the price will have limited room for further decline in the short term, and the upward trend still needs to wait for the right time.
Under the influence of the off-season, the misalignment of supply and demand has led to a continuous decline in prices and high costs, and companies have continued to be suspended. This is a challenge for anhydrous hydrofluoric acid companies. The game between upstream and downstream is still continuing. Under the influence of the negative demand in the third quarter, it is difficult to find positive factors. It is expected that the short-term market may still be weak. Considering the factors of the change between the off-season and the peak season, the price of anhydrous hydrofluoric acid is often likely to rise in the fourth quarter: on the one hand, the supply of raw material fluorite powder will gradually decrease in the fourth quarter, and fluorine chemical companies generally have winter storage plans for raw materials. The impact of supply and demand may support the increase in fluorite powder prices, and then support the price of anhydrous hydrofluoric acid; on the other hand, the refrigerant industry may start production in the fourth quarter compared with the third quarter, and the downstream new round of production peak season is expected to increase demand for anhydrous hydrofluoric acid, which is good for the market. However, under the influence of quotas and other policies in the refrigerant industry this year, the production situation of enterprises in the fourth quarter remains to be seen, and the boost to the anhydrous hydrofluoric acid market also needs to be cautiously observed.