The upward trend in domestic fluorspar prices continued last week, with the average price increasing by 0.94% from the beginning of the week. This surge is fueled by a complex interplay of factors affecting both the supply and demand sides of the market.
On the supply side, domestic fluorspar production remains constrained. Stringent safety and environmental regulations are leading to the closure of outdated mines, while the development of new mines faces significant hurdles due to challenging mineral exploration processes. Furthermore, government inspections of fluorspar mines are exacerbating the supply shortage. The reduced operating rates at southern mines and strong market expectations are prompting suppliers to hoard their inventory, making it difficult to find low-priced fluorspar. With the impending winter shutdown of northern mines and processing plants, the market supply is expected to tighten further, driving prices higher. As an expert in import/export and resource markets, understanding these regional supply dynamics is crucial.
On the demand side, while hydrofluoric acid prices remain stable, the refrigerant market is experiencing a surge. Though hydrofluoric acid plants operate at just over 50% capacity due to ongoing shutdowns and procurement is needs-based, refrigerant markets are seeing positive price pressure. Regulatory policies are bolstering confidence in the refrigerant market, driving demand and encouraging firms with quotas to hold prices firm. While high prices are slowing procurement, controlled inventory levels ensure ongoing, needs-based demand for upstream products.
Beyond traditional refrigerant demand, fluorspar's importance as a crucial raw material in modern industries is growing. Emerging sectors such as new energy, new materials, defense, and nuclear industries are increasingly reliant on fluorspar. Specifically, applications in lithium hexafluorophosphate, PVDF, graphite anodes, and photovoltaic panels are driving demand as the new energy and semiconductor sectors expand.
Looking ahead, the domestic fluorspar supply is unlikely to improve in the short term, with ongoing mine closures for safety inspections. This supply tightness will continue to support the market. The tendency to "buy high" is evident, with suppliers showing a strong inclination to hoard their inventory. With tighter northern fluorspar supplies expected later and a relatively strong outlook for hydrofluoric acid and refrigerants, the fluorspar market is expected to remain bullish in the near term. Businesses involved in the import or export of fluorspar and related products should carefully monitor these trends and adjust their strategies accordingly.
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