China’s Fluorspar industry has been witnessing supply shortages since the start of the winter season due to impacted production rates amidst soaring energy and logistics costs and tight imports.

The country’s Fluorspar imports from Mexico fell by 27.31% in October 2021 on year-on-year basis. Imports from South Africa and Vietnam were also highly priced as these countries sought for increasing their shipping volumes to China at competitive prices. 

Since Q3 2021, several Chinese manufacturers have been facing environmental issues in the processing of Fluorspar in the mines, causing the local supplies to decline significantly. Consequently, downstream producers of hydrofluoric acid (HF), an important chemical for the production of refrigerants, began to scramble for scarce Fluorspar inventories.

At the start of November, HF prices in China were boosted by rising acid grade Fluorspar. Some producing companies also carried out production overhauls in Q3 that created undue shortage of the material in the Chinese markets which combined with electricity restrictions in many places, further impacted prices. As Per National Bureau of Statistics(NBS) of China, November’s Producer Price Index (PPI) , which measures the average change in price of commodities at factory gate, has went up by about 12% on a y-o-y basis.

Increasing demand for rechargeable batteries, particularly in electric vehicles is driving up the Chinese Fluorspar market as manufacturers are increasingly making a switch to fluoride ion as an alternative of the lithium ion, as fluorine possesses a stronger electronegativity.

As per ChemAnalyst, Fluorspar demand will continue to rise in the battery industry, since applications such as Hydro Florine manufacture and lithium-ion grade batteries would require large amounts of Fluorspar. Prices are likely to increase in the coming weeks on account of continued tightness in supplies and high demand from the photovoltaic (PV) & specialty grade HF markets.