Fluorspar Market: Poised for Growth with Seasonal Demand

The domestic fluorspar market has shown a steady and positive trajectory since August 2025, fueled by a confluence of factors that suggest prices are more likely to rise than fall. While spot market transactions remain cautious with businesses adopting a needs-based purchasing approach, the underlying strength of cost support and optimistic demand expectations from downstream industries are pushing fluorspar prices upwards.

A key driver of this price increase is tightening supply. Extreme weather in some regions has restricted mining operations, leading to a scarcity of available fluorspar. Coupled with the reluctance of businesses to sell at lower prices, this has established a solid foundation for price recovery. Regional price variations also exist, with southern regions generally showing higher prices than northern regions.

Looking ahead, demand expectations are bullish, driven by the dual engines of the new energy sector and the refrigerant industry. The refrigerant industry, preparing for the peak air conditioning production season, is increasing its fluorspar procurement. Simultaneously, the burgeoning new energy sector, particularly the demand for lithium hexafluorophosphate (a crucial material for lithium batteries) and fluorinated backsheets for solar panels, is providing substantial support for fluorspar prices.

The approaching winter season in northern regions will further impact fluorspar extraction, prompting downstream companies to initiate stockpiling for winter, securing stable production going forward. Concentrated purchasing demand from hydrogen fluoride producers is already becoming apparent, with recent hydrogen fluoride market prices increasing by RMB 450/ton, further bolstering the positive market sentiment for fluorspar.

While the building materials industry shows signs of recovery, caution is advised. The building materials industrial prosperity index for August 2025, released by the China Building Materials Federation, stood at 101.2 points, above the critical threshold. However, the price index remained below the threshold, indicating that building material product prices continue to fluctuate at low levels.

In the short term, the fluorspar market is expected to maintain its upward momentum. Driven by cost support and seasonal demand expectations, prices are likely to increase, with some institutions predicting further increases of RMB 100-200/ton. The traditional peak season usually kicks off in late September to October, further driving up prices with winter stockpiling demand for refrigerants.

However, the continued influx of imported fluorspar, particularly from Mongolia, may exert some downward pressure on prices. Companies should closely monitor the pace of downstream procurement, hydrogen fluoride pricing trends, and the effects of macroeconomic policies to plan production and inventory and mitigate market volatility risks.

Overall, the fluorspar market is in a "steady accumulation, slow climb" phase. In a context where the overall industry prosperity is recovering, seizing structural opportunities and operating prudently will be crucial for businesses to navigate the current market.