Diverging trends in China’s fluorspar exports

By Shruti Salwan
Published: Monday, 18 July 2016

Acidspar steady as metspar struggles; aluminium fluoride overcapacity issues.

China’s fluorspar exports have been mixed this year with acid grade fluorspar (acidspar) volumes increasing in contrast with metallurgical-grade fluorspar (metspar) trades for the period Jan-May 2016, although the average value of sales fell as suppliers were forced to lower offers.

Acidspar exports for the first five months of the year grew by 21.3% year-on-year (y-o-y) despite slower growth in the fluorochemicals industry, while metspar exports were down by 24.4% y-o-y as steel production globally failed to sustain growth in this segment throughout H2 2016.

The increase in exports is largely the result of oversupply within the domestic market as the slump in European and North American demand outstripped attempts to sell excess capacity into international markets. As a result, the majority of China’s excess acidspar capacity was routed to India, which accounted for 43.4% of total acidspar exports. 

The Indian fluorochemical market has presented some Chinese suppliers with new trade opportunities as extreme weather conditions and infrastructure development has fuelled growth in the country’s fluorochemical market. 

Chinese exports were also buoyed by increased sales to Japan after Chinese New Year, accounting for 41.6% of the total share in the first two months of Q2 2016.

Elsewhere demand remained sluggish in the fluorochemicals industry – the major driver of hydrofluoric (HF) acid consumption – with increasingly stringent regulations causing a drop-off in demand. 

According to IM sources, China has played a significant role during the slowdown by dumping low quality, cheap HF acid on international markets, as buyers were keen to purchase low cost Chinese product. China’s exports, rose 5.8% to 93,586 tonnes between January and May 2016, up from 88,443 tonnes for the same period last year, as some producers successfully managed to retain market share with lower priced offers.

Meanwhile, aluminium fluoride (AlF3) registered a more fragile performance with exports dropping by 37.5% y-o-y for the period, as overcapacity in the global aluminium industry restricted China’s AlF3 producers to operating at 40% capacity, leading to a massive drop in exports. 

The AlF3 sector is the second largest end-market for acidspar, estimated to account for around 27% of demand and around 16% of total fluorspar consumption.

The market is likely to remain consumer driven as the overall industry continues to suffer from a considerable overcapacity, fierce price competition and a backlog throughout the fluorochemical supply chain. 

This has seen fluorspar, mainly acidspar, negotiations at new low levels of $200/tonne, on an FOB basis, for Q3 2016 contracts despite the closure of some significant production plants since the start of the year.

China’s fluorspar exports Q1 2013 - Q2 2016* 


*On the basis of average forecast for Q2 2016