In August 2015, according to China Customs, China exported 83,477 tonnes of
aluminium fluoride (AlF3) in H1 2015, up by 9.06% over that of 76,541 tonnes in
H1 2014.
The active export activity was mainly impacted by the languishing demand in
domestic market.
Specifically, the electrolytic aluminium industry, which plays a vital role in
the AlF3 downstream application, was regulated by the government policy to ease
the overcapacity. This, together with the poor economic conditions nationwide,
forced the enterprises to frequently down-regulate the operating rates, which
further weakened the demand for AlF3.
Meanwhile, the AlF3 industry was also trapped in severe overcapacity: low price
unable to rebound, profit margin narrowed down and operation pressure enlarged.
"In H1 2015, the loss from the domestic orders was about USD49.04/t
(RMB300/t)", said a sales manager. (Loss= ex-works price - cost from raw
materials and other costs)
In addition, the export rise can also be ascribed to the market expansion
launched by many AlF3 enterprises in overseas markets in 2014, from which
orders were made and further be delivered in 2015. For instance:
March 2014: Ningxia Hui Autonomous Region realised the first export of
AlF3 via Ningxia King Chemicals Co., Ltd.
April 2014: both Gansu Province and Chenzhou City (Hunan Province) broke
the zero AlF3 export via Baiyinzhongtian Chemical Co., Ltd. and Yizhang
Hongyuan Chemicals Co., Ltd. respectively
December 2014: Do-Fluoride Chemicals Co., Ltd. successfully stepped into
Russia with its AlF3
Export trend of aluminium fluoride in China, H1 2014 & H1 2015
Source: China Customs & CCM
CCM predicts that the AlF3 export will continue being active in H2 2015. This
is mainly because:
- Continuously sluggish domestic AlF3 market. Specifically, the electrolytic
aluminium manufacturers have down-regulated the operating rates since late
July, influenced by the largely decreased spot price of aluminium – down by 3%
MoM and 9% YoY to USD1,962/t (RMB12,000/t) in July.
This further decreased the
demand for AlF3 and exerted great pressure on the AlF3 producers. According to
CCM research, some AlF3 producers, including Luoyang Fengrui Fluorine Co., Ltd.
(30,000 t/a), Zhuzhou Guangcheng Chemical Co., Ltd. (20,000 t/a) and Jiangxi
Fufeng Chemical Co., Ltd. (15,000 t/a) have started to halt production since
August and have planned to restore production until mid September.
- Gradually upward trend in AlF3 export. Due to the overcapacity and the poor
domestic demand, export has become a major channel for AlF3 producers to do
business.
H1 2013: +20.08% YoY
H1 2014: +12.02% YoY
H1 2015: +9.06% YoY
In view of the export trend in recent years, the exports in H2 will be larger
than that in H1. In Q4 particularly, the foreign downstream enterprises are
more willing to stock the warehouses, which will distinctly drive up the
demand.
In addition, since mid August, the RMB/USD exchange rate has been sharply
declining. By 27 Aug., the fall had reached 4.78% (USD1=RMB6.1162 on 10 Aug.
vs. USD1=RMB6.4085 on 27 Aug.). This, to some extent will encourage the foreign
countries to increase the imports from China. The domestic AlF3 producers who have
succeeded in developing overseas markets and have got steady orders, stated to
continue increasing the export to satisfy the demand.
This article comes from China Fluoride Materials Monthly Report 1508, CCM
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