Fluorspar acidspar consumers in Europe and the United States have started to make more inquiries with Chinese sellers, driven by rising global prices, a potential supply issue from Canada, and relatively stable Chinese prices.

Sellers of acidspar in China have received increasing numbers of inquiries this year from international buyers, especially from Europe and the United States. These regions rarely placed orders in China during 2021 due to the Covid-19 pandemic, China’s relatively high prices compared with those from other global suppliers last year, and rising global transportation fees.

"All acidspar trades have been going to the Asian region, benefiting from the distance advantage. We had no deals from European or US buyers for a long period because last year China’s acidspar prices were higher than the rest of the world, but recently inquiries have started to appear again," a fluorspar acidspar seller said.

According to China’s official data, a total of 47,358 tonnes of fluorspar were exported in 2021, down by 33% from 70,704 tonnes in 2020, and most of that volume went to Asian countries, including Japan, South Korea and India.

Sources said that the return of demand from Europe and the US has been caused by several factors, including continuously rising global acidspar prices, concerns about potential fluorspar supply reductions from Canada, and relatively steady Chinese prices.

Supply and rising prices

International fluorspar markets face uncertainty in 2022 following reductions made to supply outlooks and forecasts for increased demand in Europe and the US.

News in February that North American fluorspar producer Canada Fluorspar was going into interim receivership has worried consumers that, depending on the final outcome, they may have to source material elsewhere. Canada produced 140,000 tonnes of fluorspar in 2021, according to mine production estimates by the US Geological Survey.

While potential supply shortages outside China offer opportunities for exports from the country, there are hurdles to overcome, including continuing freight delays and increased bulk shipment costs, rising further recently due to fuel cost increases.

One European distributor said: "It’s very difficult to start a reliable supply line from a logistics perspective to China. I see spot business perhaps the better option for purchasers."

Fluorspar acidspar prices have increased considerably year-on-year. Fastmarkets’ February assessment for fluorspar, acidspar, 97% CaF2, wet filtercake, cif Rotterdam, held stable over the month at $500-520 per tonne, but that was up substantially from $370-430 per tonne in February 2021.

The complete fluorspar value chain held by China has reduced exports of fluorspar in recent years, in favor of increased supplies for domestic consumption and subsequent exports of processed hydrofluoric material. This has to an extent decoupled China from the global fluorspar market.

Quality issues reported for material from other exporting regions can limit purchasing options for fluorspar consumers. One example is the high arsenic content found in some exports of Mexican fluorspar, which can restrict its usability for European consumers.

Steady Chinese acidspar prices

Unlike the continuously rising global fluorspar acidspar prices, China’s acidspar market has remained steady, with prices mostly range-bound without significant upward support yet, caused by sluggish Chinese domestic downstream hydrofluoric acid and refrigerants sectors.

Most sellers have not adjusted export prices in line with the relatively steady domestic price, and China’s domestic prices have been mostly rangebound at 2,500-2,800 yuan ($393-440) per tonne. Market participants also estimated that China’s acidspar prices will not rise dramatically this year, considering no surge in demand from the downstream refrigerant industry.

Fastmarkets assessed the price of fluorspar, acidspar, 97% CaF2, wet filtercake, fob China, at $430-460 per tonne on February 24, unchanged since November 18, 2021.

"China’s acidspar prices were not the highest level in the world, and some suppliers outside of China pushed up their prices due to tight supply and increasing demand from overseas consumers, with optimism about the post-pandemic landscape and expectations of economic growth re-emerging," a trader said.

As for whether demand from Europe and the US could last during the rest of 2022, there are different views.

Some sources believe that if global prices keep increasing, that will generate more spot interest in China’s relatively steady-priced materials, but others think increasing demand from Europe and the US is just short-term and it is still hard for China to return to being a net exporter as it was years ago.

"I don’t see China going back to dominating the export market, but certainly some are pursuing Chinese material," the European distributor said.

"China has become a net importer of fluorspar since 2018," a second trader added, "having previously been a net exporter, because it became hard to compete with much cheaper prices from other global suppliers. But, affected by rising global prices, more of China’s buyers slowed down the purchase of imported materials, and at the same time demand in the export market started to warm up. The situation might see some changes, and I will be watchful."