China’s fluoride trade with BRICS members is increasing, opens opportunities

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Publish time:10/13/2017 12:00:00 AM      Source: CCM
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The BRICS group of emerging countries is increasing internal trade relations to strengthen their cooperation in getting less dependent on the Western-lead global order. This is also witnessed for China’s fluoride trade, shown by the growing exports of Do-Fluoride Chemicals, one of China’s leading market players.


 


In the beginning of September, a representative of the executive board of China’s fluoride giant Do-Fluoride Chemicals, revealed that the' foreign trade volume of the company with the other members of the BRICS group, which consists of the five major emerging nations Brazil, Russia, India, China and South Africa, in the past five years has increased to about USD116 million. According to the executive board, it is furthermore predicted that the figure in 2017 would rise again and exceed USD35 million. 



Since the establishment of BRICS, Do-Fluoride Chemicals has increasingly frequent trade and close cooperation with the other four BRICS countries, which are major producing areas of electrolytic aluminium. According to market intelligence firm CCM, these countries have an annual production capacity of a total of more than 8.5 million tonnes. As Do-Fluoride Chemicals’ cryolite and anhydrous aluminium fluoride (AHF) are fluxing agents for electrolytic aluminium, its trade value with four BRICS countries reached USD11.26 million in 2016. Moreover, its annual export volume of cryolite and aluminium fluoride (AlF3) has respectively ranked first for 15 and 10 consecutive years in China. 



The main downstream factors for the international fluoride chemicals market is the glass industry as well as aluminium, smelting, metallurgy and the chemical industry in general. The main markets for these products are North America, Asia Pacific, and Western Europe. While the Western countries are mainly demanding acid fluorite, China is using fluorite for the booming cement and glass industry. 



However, the economic growth of the five nations, in general, has slowed down in recent time, where China has witnessed the weakest growth rate of the last 25 years and Brazil as well as Russia even faced a recession. Trade experts, as a result, say the ambitions of the BRICS countries to seek a bigger voice in the global financial order remain largely unfulfilled. 



The internal trade between the group is still only counting for a small amount of their global trade. About 5% of the trade is done between each other. Hence, the countries still have a huge potential to increase their internal group trade and become more sustainable as a group with less dependence on the world market. 



About Do-Fluoride 

Do-Fluoride Chemicals Co., Ltd. develops, produces and sells chemical products like cryolite, aluminium fluoride and inorganic fluoride compound products. The Company's products include anhydrous hydrogen fluoride, industrial hydrofluoric acid, ammonium bifluoride, and potassium fluoride.








 


Do-Fluoride had a total revenue of USD229.5 million in the first half of 2017, which indicated a growth of more than 20% compared to the same period of last year. However, both, the operating profit as well as the total profit went down in H1 2017. According to CCM, the main reason can be found in fewer subsidies on alternative energy vehicles and the consequent smaller demand for lithium salt. 

 

About BRICS 

The BRICS group has created its own development bank as well as a reserve fund to establish an alternative to the Western-controlled institutions of this kind. The basic idea behind this is the launch of an institution which finance infrastructure can manage and prevent future economic crises for its members. Set up in the year of 20l5 as an alternative to the World Bank, the New Development Bank was one of the first major BRICS achievement after the group came together in 2009 to press for a bigger say in the post-World War Two financial order created by Western powers. 



It is notable, that the BRICS countries are responsible for slightly less than a quarter of the world’s GDP, granting this group immense influence for the future. Of the BRICS’s GDP, China alone has a share of half of it, leading the group in terms of economic power. What’s more, besides having the share of around a quarter of world’s GDP, the population of BRICS countries is accounting for around 42% of the world population, mainly due to the large population of China and India. This is why those states are likely to grow comparably fast in the near future than Western countries, which are facing partly a population stagnancy or slower growth. 



Other countries are getting increasingly attracted to join the group, especially now with US president Donald Trump is following his agenda of putting America first and announces to cancel or free trade agreements. One example is the North American Free Trade Agreement, which, if it should be cancelled, would put Mexico into a more difficult international trade situation and may push the country closer to the BRICS states. 



As the BRICS group may expand in the future with new emerging countries like Indonesia and Mexico joining, fluoride manufacturers should track the development to find their place in the trade flow between this group. 



About CCM 

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets. 



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