Fluorite prices in China are steadily increasing

The domestic fluorite market has seen a recent upward trend, with the average price increasing by 1.95% as of last weekend. This represents an 11.38% year-on-year increase. This price surge is primarily attributed to constrained supply and rising demand in downstream industries.

On the supply side, the fluorite industry continues to face challenges. Stringent environmental and safety regulations are impacting mining operations, leading to closures of outdated mines. The difficulty in securing approvals for new mining projects further exacerbates the supply shortage. These factors collectively restrict the overall operating rates of fluorite enterprises, resulting in low inventory levels and a noticeable supply deficit, particularly in northern regions.

From the demand perspective, the price of hydrofluoric acid, a key downstream product of fluorite, has risen slightly. While some hydrofluoric acid plants remain offline, the overall operating rate is maintained at just over 50%. Hydrofluoric acid manufacturers are primarily focused on fulfilling immediate orders and depleting existing inventories. The increased cost of hydrofluoric acid further supports the positive trajectory of the fluorite market.

Furthermore, the refrigerant market, another downstream application of fluorite, is experiencing an upward trend. Supported by favorable government policies and strong confidence among fluorochemical companies operating within quota regulations, the refrigerant market is poised for substantial growth. Rising prices in the foreign trade market are driving demand for upstream products like fluorite.

Beyond traditional refrigerant applications, fluorite plays a crucial role as a raw material in modern industries, especially in emerging sectors such as new energy, new materials, defense, and nuclear industries. Its use in lithium hexafluorophosphate, PVDF, graphite anodes, and photovoltaic panels is steadily increasing, driven by the growing demand in new energy and semiconductor industries. This expanding application scope provides significant support for fluorite demand.

Looking ahead, the tight supply situation in domestic fluorite mines is unlikely to improve in the near term, as some mines remain closed for safety inspections. This supply constraint, coupled with the rising prices in the downstream refrigerant market and the potential for increased terminal demand, suggests that domestic fluorite prices are likely to continue their upward trajectory. Businesses involved in the import and export of fluorite should closely monitor these market dynamics to make informed decisions and optimize their operations. It's crucial to assess existing contracts, explore alternative sourcing options, and diversify into value-added products to mitigate potential risks and capitalize on emerging opportunities.

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