Fluorite: New supply and demand ecology of fluorite in 2024, imports will fill the domestic gap

Introduction: Fluorite is a non-renewable resource-based mineral product. In recent years, the domestic control and rectification of the fluorite industry has increased, resulting in a decline in domestic fluorite production and a widening of the domestic supply-demand gap. However, supported by relevant policies and favorable factors, fluorite imports have gradually increased, filling the domestic supply-demand gap and having an increasingly obvious impact on domestic fluorite supply.

In March 2024, the State Administration of Mine Safety issued the "Notice on Carrying out Special Rectification of Fluorite Mine Safety Production". In order to effectively solve the outstanding problems of fluorite mine safety production and effectively prevent and control major safety risks, the State Administration of Mine Safety decided to carry out special rectification of fluorite mine safety production nationwide. Under the influence of relevant market factors, the tightening of domestic fluorite supply is increasingly in short supply. The fluorite import market has been supported by favorable policies this year. From January 1, 2024, according to the announcement issued by the Tariff Commission of the State Council, the temporary import tariff rate for fluorite with a calcium fluoride content of ≤97% and an arsenic content of ≤0.0005% by weight (tariff number 25292100) and fluorite with a calcium fluoride content of >97% and an arsenic content of ≤0.0005% by weight (tariff number 25292200) in 2024 is 0%. The reduction and exemption of import tariffs has boosted the enthusiasm of traders to import. The increase in fluorite imports this year has compensated for the reduction in production to a certain extent, alleviating the domestic supply and demand situation.

Domestic supply is tight, and imported goods make up for the supply gap

From the perspective of domestic supply, the overall supply of ore is tight this year. In the first quarter, some concentrators can still rely on inventory ore to maintain production, but with the gradual consumption of inventory ore, the supply of raw ore in the concentrators has decreased, the industry's operating rate is difficult to increase, and the domestic supply and demand gap has widened. In the case of domestic raw ore shortage, the import volume of fluorite from trading partners such as Mongolia, Zambia, and Thailand has increased, which has made up for the domestic supply gap to a certain extent. Taking North China as an example, some concentrators with their own mines cannot mine due to incomplete relevant certificates. They mainly rely on purchasing raw ore from outside during the year. Enterprises also choose to import ore as a supplement. Domestic production can still meet the use needs of downstream industries. The capacity utilization rate of concentrators has gradually declined during the year. Judging from the start-up situation of sample enterprises, the industry's start-up in 2024 is generally lower than that in 2023. In previous years, the third quarter was the period with the highest start-up in the industry, while the market start-up around the third quarter of 2024 was generally 4-5 percentage points lower than the same period in 2023. It was not until the end of the third quarter that the market operation gradually recovered to the 2023 level, mainly because safety inspection and governance work in some areas had been completed, and the increase in imported ore supported the bullish expectations for prices in the fourth quarter, so the enthusiasm of the concentrators to start operations was high.

The increase in imports has made up for the domestic supply gap. According to customs data, the total import volume of fluorite in October 2024 was 137,730 tons, an increase of 20.30% from the previous month and 3.03% from the previous year. From January to October 2024, the cumulative import volume was 1,044,630 tons, an increase of 36.62% from the previous year. In October, fluorite exports were 13,680 tons, a decrease of 51.33% from the previous month and 38.51% from the previous year. From January to October 2024, the cumulative exports were 207,270 tons, a decrease of 33.48% from the previous year. Domestic fluorite was in a net import state during the year, and the import volume continued to increase.

The main import trading partner is Mongolia, and the import recipient is Inner Mongolia Autonomous Region

From the perspective of import trading partners, from January to October 2024, Mongolia is the main trading partner for fluorite imports. The fluorite from Mongolia is 927,050 tons, an increase of 12.53% year-on-year, accounting for 88.74% of the total import volume, and the average import price is US$141.64/ton. Mongolia has a large amount of fluorite reserves, but the downstream is small and the demand is weak. In recent years, some domestic fluorite practitioners have gradually developed the Mongolian market. Supported by abundant resources and convenient transportation, the fluorite from Mongolia has continued to increase, but it is mainly low-grade fluorite, so the average import price is lower than that of other trading partners. Secondly, the import volume of fluorite from Zambia is 36,190 tons, an increase of 290.55% year-on-year, accounting for 3.46% of the total import volume. Secondly, trading partners such as Thailand, Nigeria, and South Africa also have fluorite business dealings.

From the perspective of the receiving place of goods, the Inner Mongolia Autonomous Region imported 668,260 tons of fluorite, a year-on-year increase of 39.42%, accounting for 63.97% of the total import volume. The Inner Mongolia Autonomous Region borders Mongolia and mainly imports through the Erlianhot Port and Mandula Port, with convenient transportation. At the same time, the supply of fluorite in North China is tight this year, and there are many dressing plants in North China. Driven by demand, it also drives the enthusiasm of import practitioners, so the Inner Mongolia Autonomous Region is the region that receives the most imported goods. Secondly, Shandong Province imported 97,410 tons, a year-on-year decrease of 20.20%, accounting for 9.33% of the total import volume. There are many downstream fluorite distributions in Shandong, including fluorine chemical and smelting enterprises, but Shandong has few fluorite resources, and downstream enterprises mainly rely on traders to supply fluorite. Secondly, Shanghai, Hunan Province, and Tianjin also have fluorite imports.

Jiayuan has established a cooperative relationship of mutual trust and mutual benefit with its partners in Inner Mongolia. Both parties are honest and abide by the contractual agreements to jointly maintain the market order and fair competition environment. At the same time, the two parties have achieved common development and prosperity through mutually beneficial and win-win cooperation.

Domestic supply continues to be tight, and imports may continue to increase

From the perspective of domestic production, fluorite is a non-renewable resource-based mineral product. In recent years, the domestic control and rectification of the fluorite industry has increased, resulting in a decline in fluorite production. In addition, with the early mining, some mines are facing the problem of resource depletion, and the difficulty of continued mining has increased, further reducing the mining volume of fluorite. Under the influence of relevant industry policies and development status, it is expected that the domestic production of fluorite will continue to decrease in the future. As for imports, it is expected to continue to show an increasing trend. On the one hand, the support of domestic policies has driven the enthusiasm of traders to import. On the other hand, in recent years, stimulated by the domestic supply and demand gap and the strong performance of the fluorite market, some cross-industry practitioners have also gradually involved in the fluorite market. Practitioners have gradually developed foreign markets, such as the fluorite industry of major trading partners such as Mongolia, Pakistan, South Africa, and Zambia. It is expected that the domestic import volume of fluorite will continue to increase in the future. In terms of comprehensive domestic production and imports, the total domestic supply will tend to decrease year by year in the future. The increase in imported sources will make up for part of the gap in production decline, but supply and demand may still be in a tight balance.

The cooperation between Jiayuan and its partners will continue to deepen, and the cooperation between the two parties in the fields of commodity trading, resource sharing, etc. will become closer. For interested buyers, Jiayuan is undoubtedly a trustworthy partner with its high-quality products, rich experience and good reputation. We sincerely invite all buyers to come to Jiayuan Company for procurement, share the results and opportunities of cooperation, and work together to create a better future.