The supply chain in the fluorine market has been disrupted
since the outbreak of the novel coronavirus (2019-nCoV) in
China. Factories and mines in the country have been slow to
restart their operations after the extended Lunar New Year
break because employees were told not to return to their
workplaces in order to help contain the outbreak.
Limitations on logistics movements were also put in place.
Trucks and their drivers could not cross provincial borders,
making supply chain logistics particularly difficult. The
global market is well supplied, with many non-Chinese consumers
reporting to Fastmarkets that they have stocks left over from
2019 because sales did not reach expected levels. This caused
one non-Chinese consumer to continue to run his factory at
60-70% of capacity.
Similarly, some factories are not operating at nameplate
capacity because of poor pricing and demand in key acidspar end
markets, such as fluoropolymers and refrigerants. The limited
activity in the fluorspar market, both upstream and downstream,
could help rebalance the market.
The border between China and Mongolia is closed, a source
told Fastmarkets. "The traffic restrictions in China have been
largely lifted and when the traffic gradually returns to normal
in the whole country in April, the whole fluoride industrial
chain will rise by 5-10% or more," one Chinese fluorspar
The supply of downstream companies to their customers will
not be affected too much in March since fluorspar consumers
have enough stock, but end market prices have begun to rise, a
seller source said. The slowing of the logistics supply chain
could tighten supply.
Mongolia produces large volumes of fluorspar and the
majority of the material makes its way into China to either be
consumed or exported. Mongolia exports all of its fluorspar,
which in 2018 totaled around 550,000 tonnes. More than 350,000
tonnes of this went to China, with the remainder going to
Russia, according to data from Mongolia’s Ministry
Global fluorspar supply is just shy of 6 million tonnes,
according to industry consultant Roskill. The global fluorspar
market has also been impacted by weaker demand for
In the latest round of contract talks, consumers were able
to negotiate prices down against last year’s
Fastmarkets’ price assessment for fluorspar,
acidspar, 97% CaF2, wet filtercake, fob Durban, was $350-410
per tonne on Thursday January 30, down from $400-450 per tonne
in the previous assessment on December 26 and off from $440-490
per tonne in late November. The November price had been largely
unchanged for nearly a year, only widening downward by $10 per
tonne in March. Year on year, the price has declined by $90 per
tonne, or 19.1%, based on the current midpoint of $380 versus
the midpoint of $470 on Jan 31, 2019.
The price reduction was due to weak end-market demand and
pricing. "The acidspar producers kept prices as high as they
could, but the aluminium fluoride [AlF3] prices went very low,
so there was a need for an adjustment in the raw material
price," an aluminium fluoride producer said. "We have seen a
decrease of 20-25% [in the price of fluorspar]. $100 per tonne
looks a little too big of a jump, but considering prices were
close to $500 per tonne last year, it might be about right,"
this source added.
Historically, Chinese acidspar had always commanded the
highest price because its quality was usually guaranteed and
Chinese suppliers had the volume to supply the international
market. While it is still the case that Chinese material is the
most expensive, the premium which it commands over acidspar
from other locations has diminished.
Mexican material was typically cheaper by comparison due to
high arsenic content, which made it unsuitable for many
consumers due to the increased downtime it causes for the
Fastmarkets' price assessment for fluorspar, acidspar, 97%
CaF2, wet filtercake, fob China was at $400-450 per tonne on
February 20. Fastmarkets' assessment for fluorspar, acidspar,
97% CaF2, wet filtercake, fob Tampico was at $380-450 per
tonne. The two prices are almost identical.
Prices two years earlier were $480-520 per tonne for Chinese
acidspar and $360-380 per tonne for Mexican material, marking a
$100-per-tonne differential between the top end of Mexican and
the bottom end of Chinese fluorspar. These price movements have
brought a convergence of global prices.
Prices for Mexican material have increased because the
market was undersupplied last year and the sole producer in
Mexico managed to maintain its price level, citing good
long-term demand for fluorspar despite the short-term weakness.
Chinese acidspar prices have softened after reaching record
highs following the environmental inspections, which created
tightness in the market.
Should the current situation in China continue, it could
further tighten supply. This would place upward pressure on the
fob China price. But this might boost the downstream industries
that have performed badly in the past 12 months due to
oversupply and illegal refrigerant trade, which has hurt many
of the refrigerant producers’ sales.
China remains a net exporter of acidspar
Acidspar exports from China fell against the previous year
and imports rose, but the nation is still yet to become a net
importer of 97% CaF2 fluorspar, according to the latest trade
data from China's Customs Bureau.
Continued environmental inspections in China since early
2018 have taken acidspar out of production, hastening market
expectations that China would move to become a net importer of
fluorspar. Local inspections took up to 600,000 tonnes of
production out of the market, according to Roskill.
Subsequently, there has been a push from Beijing to develop
downstream, value-added, industries.
But China remains a net exporter of the acid-grade material.
Chinese exports totaled 190,600 tonnes in 2019, down from
201,000 tonnes in the previous year. Meanwhile, the country
imported 130,140 tonnes of the material in 2019, rising from
91,000 tonnes of acidspar in 2018. This means the acidspar
export surplus is 60,000 tonnes for 2019, down by 50,000 tonnes
or 45.5% year over year.
Fastmarkets assessed the price of fluorspar, acidspar, 97%
CaF2, wet filtercake, fob China at $400-450 per tonne on
February 6, stable since October 2019. The price is back at a
similar level to before the environmental inspections in China
hit the fluorspar mining sector and created a supply shortage.
It rose to a peak of $550-580 per tonne in December 2018 from a
price of $400-420 per tonne in January 2017.
In the metspar market, imports totaled 567,500 tonnes, up by
35% from 420,000 tonnes imported over 2018. China exported
183,500 tonnes of metspar, down from 202,000 tonnes in
This leaves the overall balance of fluorspar at a net import
of 323,540 tonnes.
High import prices
Chinese imports could have been higher in 2019 had
overseas prices not been so high. The contract-driven markets
settled prices around November 2018 which then held for the
next 12 months.
Fastmarkets' price for fluorspar, acidspar, 97% CaF2, wet
filtercake, fob Durban was $450-490 per tonne between November
2018 and November 2019. This was the highest price since
Fastmarkets started assessing acidspar from South Africa in
1989. Chinese consumers and traders reported being unable to
purchase material at this price as they would also need to add
VAT and import duties on top, 16% on top of the unit price of
That price has since softened to $350-410 per tonne, as of
Last year, China started making regular imports from Mexico.
Additionally, the two newest producers to the market, Sepfluor
and Canada Fluorspar, have both been in contact with companies
in China over making shipments.
China had a mixed year for acidspar consumption. Its
downstream sector is the largest in the world, and accounts for
roughly half of global fluorspar consumption, but its
refrigerant market performed poorly for almost the entirety of
Hydrofluoric acid prices suffered this year while
non-Chinese fluoropolymer producers reported that prices were
down by around 25% because of oversupply from China.
Market sources told Fastmarkets that Chinese aluminium
fluoride producers are organizing a production cut to rebalance
the market and prices, which currently sit at $1,100 per tonne.
This is down from prices of around $1,600 per tonne a year