Chinese Hydrofluoric Acid Enterprises Face Cost Inversion, Market Hits Bottom and Rebounds

September 01, News

In early September, the cost of producing anhydrous hydrogen fluoride in Chinese companies was inverted, and the market bottomed out and rebounded. According to the analysis system, as of September 1st, the benchmark price of hydrofluoric acid was 11,466.67 CNY per ton, an increase of 7.67% from the end of August.

On the raw materials front: This week, China’s fluorite supply remained tight, driving prices higher while putting significant upward pressure on hydrogen fluoride costs. As of September 1, the benchmark price for fluorite stood at 3,268.75 CNY per ton, up 4.18% from the beginning of last month (3,137.50 CNY/ton). Meanwhile, market dynamics in China’s fluorite industry persist, with overall plant operating rates showing a modest increase. However, upstream mining operations remain strained, as older, less efficient mines continue to be phased out. On the positive side, exploration efforts for new fluorite deposits continue to face substantial challenges. Additionally, ongoing government initiatives aimed at upgrading and regulating fluorite mines have intensified, placing stricter safety and environmental standards on mining companies. These tightened regulations are making it increasingly difficult for fluorite mines to resume operations, further exacerbating the scarcity of raw materials and limiting production capacity among fluorite firms.

Meanwhile, the sustained high prices of fluorite are weighing heavily on hydrogen fluoride production costs, leaving manufacturers under persistent financial strain as cost pressures outpace selling prices—a situation often referred to as "cost inversion." In contrast, the hydrogen fluoride industry has recently witnessed a rebound from its recent price lows.

On the demand side: Downstream industries are entering the traditional peak season of "Golden September and Silver October," leading to strong upward sentiment across the sector. Some downstream companies are gradually increasing their raw material inventories, though limited by cash flow constraints, they’re only placing small orders that grow incrementally. Most businesses continue focusing primarily on restocking to meet immediate needs. As a result, hydrogen fluoride prices are expected to remain firm in the short term.

Outlook: With the rise in the price of raw material fluorspar, the cost of hydrofluoric acid remains high, putting pressure on production companies who are still facing losses. Downstream terminal demand is moderate, with only small orders being signed. It is expected that the market for anhydrous hydrogen fluoride will continue to show a relatively strong trend. More attention should be paid to changes in supply and demand in the market.