From Industrial Minerals.
First published: Tuesday, 29 August 2017
Amid supply pressure from environmental protection policy, strong demand in fluorine chemical industry helps support fluorspar prices.
Sales and profits at China Kings Resources Group, the leading fluorspar company in China, bounced on rising prices for fluorochemical feedstock.
Revenues rose by 21% year-on-year (y-o-y) in H1, to Chinese Renminbi (Rmb) 165.83m ($25m), and net profit increased 21% y-o-y to 33.86m ($5m).
Kings Resources Group’s acidspar (min 97% CaF2) output in H1 jumpedby 30% y-o-y to 67,900 tonnes, while metspar also rose 21% y-o-y to 4,100 tonnes. The company attributed the production increase to the newly operated Dajinzhuang mine, which only began production in the second half of 2016.
However, due to the remote location of this mine in the mountain, the cold winter season and the spring festival holiday, Dajinzhuang was only in production for three months during the first half of this year, the company said.
During the reporting period, due to the stability of product quality, the company has also started to supply directly to smelting enterprises, instead of traders. The supply volume to direct end-users are bigger, China Kings said.
Due to pressure from government policy and environmental protection, price for hydrofluoric acid were high over the period, due to capacity cut. At the same time, the downstream fluorite demand has picked up, which supported consumption for fluorspar, and pushed prices higher.
According to China Kings, the average acidspar prices in Q2 2017 spiked to Rmb1,863/tonne ($282), up 56% compared to prices in December 2016 was at Rmb 1,195/tonne ($181). Both prices were excluding taxes.
China Kings reported that demand from the fluorine chemical industry was the key driver, followed by the electrolytic aluminium and steel industries.
Citing hydrofluoric acid as an example, the basic source material of the most upper stream fluorine chemical industry, the output and capacity in China in recent years both kept over 10% CAGR, especially the six eastern provinces whose hydrofluoric acid output accounts for two thirds in China, this area had an output of 1.06m tonnes in 2016, equivalent to acidspar demand of 2.43m tonnes, meaning a supply gap of 560,000 tonnes.