Domestic
AlF3 operating rate has continuously decreased for several months, but, it may
see a slight increase in Q4 2013.
According
to China Fluoride
Materials China Monthly Report 1310 issued by CCM, the domestic
average ex-works price of dry aluminum fluoride (AlF3) in Sept.
2013 was about USD1,200/t, increasing by 2.39% compared with that in Aug. 2013,
when it stood at about USD1,172/t. Actually, the AlF3 price has been increasing
for two months since Aug. 2013. The consecutive increase in the domestic AlF3 price
was mainly attributed to the fact that AlF3 enterprises' inventory pressure in
the two months was much smaller than before and the balance between AlF3 supply
and demand began to return to normal level due to the low operating rate.
Domestic
AlF3 operating rate kept quite low in 2013, especially in the first three
months of H2 2013 when the average overall operating rate of domestic AlF3
enterprises decreased to about 27%. Moreover, some enterprises even suspended
their production lines for maintenance. For instance, Do-Fluoride Chemicals
Co., Ltd. (Do-Fluoride) suspended its AlF3 production lines from July 16 to
Sept. 15, 2013.
The
low operating rate of domestic AlF3 enterprises was mainly attributed to the
severe oversupply and constantly decreasing price.
The
domestic AlF3 industry saw a severe oversupply in H1 2013. The output of
domestic AlF3 in 2012 was about 621,500 tonnes, which has largely exceeded the
domestic market demand, about 500,000 tonnes. In 2013, the situation is still
not improved. The total output of AlF3 in H1 2013 still exceeded 292,000
tonnes. Moreover, the market demand for AlF3 from its downstream industries,
such as electrolytic aluminum, kept stable. In H1 2013, the operating rate of
domestic electrolytic aluminum enterprises was lower than 70%, which reduced
their purchase of AlF3. Therefore, the abnormal balance between AlF3's supply
and demand reduced its operating rate.
In
addition, the AlF3 price in China decreased during the period, which was almost
close to its production cost and led to losses of most enterprises. The low
price made AlF3 enterprises reduce their operating rate so that they can suffer
less loss in the difficult situation.
In
the last three months of 2013, the average operating rate of domestic AlF3
enterprises may see a slight increase. At present, there are more than 30 AlF3
producers in China, but only about 10 are still in operation. However, the
continuously increasing AlF3 price in Aug. and Sept. 2013 will promote the
enterprises to resume their production or improve their output to catch the
profitable opportunity. Moreover, in the next three months, the AlF3 price may
also continually witness a slight increase because of its increasing production
cost. The price of fluorite, a raw material of AlF3, accounts for 40% of the
production cost of AlF3, may increase in the next three months because the
upcoming cold weather in northern China may largely reduce the output of
fluorite, raising its price.
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AlF3 operating rate to increase in Q4 2013
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China
Fluoride Materials Monthly Report, a monthly publication issued by CCM on 20th,
covers the sectors on policy & legislation,
company dynamic, supply & demand, price update, etc. of China
CCM is dedicated to market research in China
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