Introduction
In the first half of 2024, the price of fluorite powder fell and then rose, and the overall price performance was better than that of the same period of last year. The tight supply played an obvious supporting role in the price. It is difficult to improve the tight supply situation in the second half of the year, and the expected price is still higher than in previous years.
Market review in the first half of the year: prices are generally higher than the same period last year.
In the first half of 2024, the price of fluorite powder rose after falling, and the overall price performance was higher than that of the same period in 2023. From January to June, the average market price of anhydrous hydrofluoric acid increased by 11.88% year-on-year. The average price is higher than our forecast last year, mainly because the notice issued by the State Mine Safety Supervision Bureau in March, 2024 on carrying out special rectification of fluorite mine safety production increased the intensity of rectification of fluorite mine safety, the supply side continued to be tight, the ore output was low, and the support price rose one after another, resulting in our deviation in forecasting the price trend in the first half of the year.
Supply and demand: mine governance, limited ore production, continued tight supply
In March 2024, the State Mine Safety Supervision Bureau issued a notice on carrying out special rectification of fluorite mine safety production, solidly organized the special rectification of fluorite mine safety, and strengthened the safety management and supervision of non-coal mine mechanization construction and production and construction teams. The time for special rectification is from March to August this year, in which March-May is the stage of self-examination and self-reform, June-July is the stage of key inspection, and August is the stage of "looking back" spot check and summary evaluation. In the first half of the year, the market supply of fluorite continued to be tight. The fluorite concentrator in Inner Mongolia, Jiangxi, Zhejiang, Hunan and other places mostly reflected that the ore output was low, and the starting load of some flotation production lines was low, so it was difficult to support the production of the concentrator. Until June of this year, the starting load of fluorite powder concentrator was still difficult to exceed 40%, which was about 5 percentage points lower than the same period in 2023. The supply continues to be tight, and the reluctance of the goods holders to sell at a high price becomes more and more obvious, which in turn supports the price increase.
The demand for anhydrous hydrofluoric acid and aluminum fluoride in the downstream industry is not reduced. From the perspective of hydrogen fluoride market, there is still new production capacity released in the first half of 2024. At present, the production capacity of anhydrous hydrofluoric acid in Inner Mongolia fluorine chemical industry has increased to 300,000 tons in the first half of the year. Hunan's technological transformation and upgrading have increased its production capacity to 60,000 tons. The total production capacity of the industry continued to increase. Judging from the market start-up, the average start-up of anhydrous hydrofluoric acid from January to June was only about 53%, down 3 percentage points from the same period in 2023, and the total output was around 950,000 tons, which was basically the same as that in 2023.
The price of raw ore rose, but the profit of fluorite powder concentrator declined slightly.
In terms of product profit, from January to June, 97% fluorite powder decreased by 22% year-on-year. Although the price of fluorite powder in the first half of the year was higher than that in the same period of 2023, under the tight supply of raw ore, the price rose one after another and remained high. The price of a piece of fluorite rose, the production cost of fluorite powder continued to increase, and the product profit declined compared with the same period of last year. The cost pressure of fluorite powder concentrator, which is partly produced by mining raw ore, is also great, and the rising price of raw ore also supports the rising price of fluorite powder.
Forecast for the second half of the year: the price is expected to remain high
In the short term, the price of fluorite powder is expected to decline slightly due to the poor terminal demand and the weak fluctuation of the downstream anhydrous hydrofluoric acid market, and the downward fluctuation range may be around 100-200 yuan/ton. However, after the third quarter, with the increase of terminal demand, the production of anhydrous hydrofluoric acid may be driven, and the demand for fluorite powder will increase, which will support the market to a certain extent, and the price may stop falling and rise.
In terms of supply and demand, under the influence of market supervision and other factors, it is expected that the supply end of fluorite will still be tight before August, which will play a bottom role in the price of fluorite powder, and the price of fluorite powder will be higher than the same period of last year. However, under the influence of the terminal off-season, the price fluctuation of fluorite powder may be affected in stages. If the demand increases after September and the supply volume is limited, the price of fluorite powder may stop falling and go up, or it may last until the end of the year. In terms of demand, the overall demand for the year is expected to remain stable compared with previous years. The new demand for photovoltaic lithium batteries and other industries has slowed down, and the demand for refrigerants has declined slightly. In this case, the overall demand fluctuation is limited, and the support for the fluorite powder market is expected to remain. It is expected that in the second half of the year, although the price will fluctuate downward, the overall price will be higher than that in the same period of last year.