Supply-Demand Gap Intensifies South African Fluorspar Prices on the Upper Edge
Supply-Demand Gap Intensifies South African Fluorspar Prices on the Upper Edge

Supply-Demand Gap Intensifies South African Fluorspar Prices on the Upper Edge

  • 17-Oct-2023 3:25 PM
  • Journalist: Francis Stokes

South Africa: The prices of Fluorspar has been significantly increased in the last month of the third quarter of 2023. Limited mining activities have created a gap between supply and demand in the domestic market of South Africa. The rise in inquiries from the downstream construction sector has also been reported to be on the higher end. Due to the combination of limited supply and strong downstream demand, manufacturers were forced to increase their price offers to achieve higher profit margins.

Recent data from the ChemAnalyst database reveals that Fluorspar prices in South Africa have experienced a substantial double-digit increase. This surge in prices aligns with the current challenges faced by the country's mining industry. Statistics indicate that South Africa's mining production, a crucial sector for the country's economy, has contracted by 2.5% Y-O-Y in August 2023. As a result, the supply of mining chemicals, including Fluorspar, has been curtailed. This limited availability of Fluorspar has further contributed to the upward pressure on prices. In addition, the persistent load shedding has weighed upon the market performance of the Fluorspar goods manufactured in South Africa. The manufacturing sector has bravely confronted these challenges through innovative solutions and increased investments. However, the persistent issue of load-shedding is gradually eroding profitability and adversely affecting the overall economy. In order to address this, it is essential to encourage private investments in renewable energy sources and enhance the capacity of public sector infrastructure.

Furthermore, as per market sources, Ares Strategic Mining Inc. has received approval for planning permission to construct and commission its Fluorspar manufacturing plant in Delta City, Utah. The company has designed and fabricated all the plant components and is now ready to proceed with foundation work, steel erection, and plant installation. Thus, with the initiation of new manufacturing facilities, the demand for Fluorspar from the downstream construction firms can be adequately met.

On the other hand, In China, amidst safety accidents in Fluorspar mines, there was a shortage of Fluorspar ore, causing the price of Fluorspar to rise and a lack of raw materials for downstream Hydrofluoric Acid production. Furthermore, downstream customers were buying Hydrofluoric Acid in larger quantities, resulting in higher bidding prices of Fluorspar for major Hydrofluoric Acid manufacturers. Thus, the market players anticipated a further rise in demand for Hydrofluoric Acid, which could further increase the price realization of Fluorspar in Q4 2023.

According to the pricing intelligence of ChemAnalyst, the Fluorspar prices might gain momentum across the regional markets. Improving the construction sector across the US market and expected improvement in demand from China after the Golden Week Holidays are likely to boost the market sentiments and lead to an increment in the market value of Fluorspar across the regional markets. In addition, the rise in energy prices amid the ongoing tensions between Palestine-Israel is also likely to prompt upward pressure on the Fluorspar prices.

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