China’s acidspar market remains firm on tight supply

By Michael Greenfield, Michael Greenfield, Carrie Shi
Published: Friday, 19 July 2019

Market participants in China reported tighter supply of fluorspar in the week ended July 19 due to worsening weather conditions and environmental inspections, but the price of acidspar held firm.

China’s acidspar market continued to be firm despite reports of tightness in supply caused by recent heavy rain in southern China and the latest round of environmental inspections, Fastmarkets heard on Friday July 19.

Fastmarkets’ latest price assessment for fluorspar, acidspar, 97% CaF2, wet filtercake, fob China, was $460-520 per tonne. The assessment was made on July 18 and was flat for the seventh consecutive week

"Supply of acidspar stayed tight in the domestic market, and we haven’t adjusted export prices this week," a Chinese trader said.

"Some producers in Zhejiang stopped production due to the recent heavy rain, and environmental inspections remain strict in most regions of China. [This] limits the production of fluorspar to some degree, with some unqualified enterprises facing potential shutdown," the trader added.

Several sources said that a fresh round of government-led inspections had begun on July 1.

While the exact effect this has had on fluorspar producers was unclear, the majority of fluorspar mines in southern China were sold out of material, according to a trader source in Europe.

The trader was trying to add some fluorspar to a vessel loaded with other products but "all producers withdrew from their earlier indications," the European trader said.

Continuing the trend witnessed so far this year, tight supply has been met with weak downstream demand.

A gloomy outlook persisted in downstream refrigerants markets, with refrigerant products such as R22, R32 and R134a under downward pressure, while limited transactions were reported on the spot market.

The end-markets, such as the air conditioner and refrigerator sectors, saw no significant growth in demand, one source said.

According to the China Bureau of Statistics, output of air conditioners in China in June was 21.33 million units, up by 2.4% year-on-year. Total output from January to June was up by 10.2% year-on-year to 119.79 million units. Refrigerator output was 7.46 million units in June, up by 2.8% year-on-year. Total output from January to June was up by 4.5% to 42.50 million units.

Many producers of aluminium fluoride (AlF3) may have switched over to production of hydrogen fluoride (HF), given that the AlF3 market has also been subject to weak demand in China this year.

This could reduce any price pressure on the raw materials from a weak refrigerant market, which may now be seeing oversupply of its feedstock.

"AlF3 prices crashed some months back, and then the AlF3 producers switched to producing HF, which caused an oversupply in that market," one ex-China consumer said. "But it looks like the HF market is now coming up a bit."

Fastmarkets does not assess the prices of either HF or AlF3.

Metspar price edges up

The price of min 85% metspar for export from China rose by $20 per tonne because strong domestic demand meant that there was little material available for export.

Demand from the steel sector remained strong, so domestically produced material was being consumed by Chinese steel mills.

The price for fluorspar, metspar, min 85% CaF2, fob China, was assessed on July 18 at $380-420 per tonne. This was up from $360-400 per tonne the previous week.

"With domestic demand from steel continuing to be strong, we have seldom exported metspar recently," a fluorspar producer said. "Domestic prices are around 2,600 yuan [$378] per tonne for 80% grade, and 3,100-3,200 yuan per tonne for 90% grade."

 



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