SunSirs: Analysis of Cryolite Market in 2022

Price trend

In 2022, the domestic cryolite market rose strongly and the price trend continued to rise. According to the data monitoring of SunSirs, the average market price of TDI was 7,950 RMB/ton on December 31, an increase of 650 RMB/ton from 7,300 RMB/ton at the beginning of the year, and an overall increase of 8.90% for the whole year. The lowest price of the year was 7,250 RMB/ton on February 14, and the highest price was 7,950 RMB/ton on November 7, with an amplitude of 9.66%.

According to the monitoring data of SunSirs in 2022, the price of cryolite rose more than fell. It can be roughly divided into the following four stages:

The wait-and-see stage (early January to the end of February)

The market price of cryolite declined slightly, with the price of 7,300 RMB/ton at the beginning of the year and 7,250 RMB/ton at the end of February, down 0.68%. The supply and demand of the market were relatively balanced before and after the Spring Festival, and the price of cryolite had not changed much. Due to the high price of individual manufacturers before the festival, the price of cryolite had been slightly reduced in order to promote shipment after the year.

Stronger operation stage (early March to the end of April)

At this stage, the price rose from 7,250 RMB/ton to 7,650 RMB/ton, up 5.52%. Limited by environmental protection policies, enterprises in the fuel sector changed from coal to natural gas. In March, due to the impact of the international situation, the price of natural gas rose, the cost of cryolite enterprises increased, and the market price increased; In April, due to the prevention and control of domestic regions, the logistics and transportation were blocked, and the on-site freight increased, while the downstream demand was stable and favorable. The market price of enterprises was raised again according to their own shipments.

Weak consolidation stage (early May to the end of June)

In early May, in order to stimulate the shipment, some manufacturers' quotations were significantly reduced, and the downstream demand was improved in the later period. With the support of raw material prices, the cryolite market slightly corrected; In June, the downstream aluminum market fell, the demand for cryolite weakened, and the industry was wait-and-see, and the cryolite price was stable.

Strong upward stage (early July to the end of the year)

In the second half of the year, the price of cryolite showed an upward trend. The main reason was that the operating rate of raw materials was at a low level, the market supply was tight, the production of cryolite manufacturers was under pressure, the enterprise inventory was tight, and the downstream demand followed up smoothly, the enterprise shipment was smooth, and the cryolite market continued to rise. From the middle and late November to the end of the year, although the market supply was still tight, the downstream demand was weakening, and the cryolite enterprises were limited by raw materials, and the quotation continued to be firm.

Market outlook

In terms of raw materials, due to environmental protection and safety factors in the upstream, the operating rate will not change significantly. In 2023, the supply of goods is still tight, and the support of cryolite raw materials is still in place.

In terms of supply, the production cost of cryolite enterprises is on the high side, the operating rate continues to run at a low level in 2022, and there is no pressure on enterprise inventory.

In terms of demand, the epidemic situation has been released to stimulate consumption, the consumption in the downstream aluminum market may increase, and the demand for cryolite has increased. In general, the growth momentum of cryolite market is relatively large, but considering the acceptance of high prices in the downstream, the price fluctuation will not be very large, and it is expected that the cryolite market will consolidate at a high level in 2023.

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