Summary of Fluorspar Industry Conference Call Industry Overview - China has become the world's largest producer and consumer of fluorspar, significantly influencing global supply and prices. However, since 2018, it has turned into a net importer, with resource consumption continuously increasing. Domestic production has risen, but downstream consumption has increased even more [1][3][4]. Key Points Production and Consumption - Current fluorspar production in China is approximately 6.5 million tons, with around 4 to 5 million tons used for producing hydrofluoric acid and about 1 million tons for aluminum fluoride and steelmaking. The total annual consumption is over 6 million tons, while global consumption is close to 7.5 million tons [4][20]. - The structure of fluorspar mining in China is predominantly small-scale, with small mines accounting for 85% and large mines only 15%. Most small mines have an annual output of 100,000 to 150,000 tons [6][7]. Regulatory Environment - Stricter safety regulations have increased the cost burden on small enterprises, giving larger companies a competitive edge in cost control. For instance, a large enterprise may spend 2 million yuan to establish a safety system, while a small enterprise may spend 1 million yuan, leading to higher unit costs for small firms [7][8]. Capacity and Utilization - Domestic large-scale enterprises can process nearly 20 million tons of raw ore, equating to an annual production capacity of over 6 million tons of fluorspar powder. However, actual utilization is around 5 million tons due to some production lines being idle [5][29]. New Capacity Projects - New capacity projects are primarily located in Xinjiang and Inner Mongolia. The Xinjiang Karqichar fluorspar mine project began operations in 2025 but has not yet produced output, with expected production starting in 2026. Inner Mongolia's upgrades mainly enhance processing capabilities without significantly increasing overall output [9][10]. By-product Mining - The by-product mining model, such as the collaboration between Inner Mongolia Jin Ebo and Baotou Steel Rare Earth, shows a cost advantage of approximately 500 yuan per ton. However, the product quality is lower, and future development is limited by tailings resources [12][13]. Market Dynamics Global Supply and Demand - The global fluorspar supply landscape includes Mongolia exporting primarily to China, Mexico supplying the U.S., and African countries supplying both China and Europe. Central Asian countries may emerge as new supply sources in the future [15][16]. - Downstream demand is mainly concentrated in the fluorochemical, aluminum fluoride, and steelmaking sectors, with overall demand remaining stable but slightly increasing. The fluorochemical sector's growth is limited by refrigerant quotas [19][20]. Price Trends - Long-term price trends indicate an upward shift, with demand growth expected to outpace supply growth in the coming years. The bottom price is projected to remain above 3,000 yuan per ton, with optimistic scenarios suggesting a peak of 4,500 yuan per ton [2][26][28]. Seasonal Price Fluctuations - Fluorspar prices typically experience seasonal fluctuations, with lower prices observed from March to July due to climatic conditions affecting production. Price increases are expected in August and September due to transportation constraints [21][22]. Future Outlook - The demand growth rate is anticipated to exceed the supply growth rate in the next few years, driven by new fluorochemical projects and the slow pace of mining rights transitioning to production [24]. - The overall trend for fluorspar prices is expected to remain upward despite seasonal volatility, supported by increasing production costs and regulatory pressures [23][26].