Aluminum fluoride price prospect bullish in Europe

Elixir Group is the leading producer of phosphoric acid in the south-east Europe and the largest producer of complex mineral fertilizers at the Balkans. The aluminum fluoride project with the production capacity of 5,000tpy started operation from Q1, 2021 and the second phase is scheduled for operation in 2023. The business system consists of 7 companies with more than 1,600 employees. Elixir Group exports more than 70% of its production in more than 75 countries globally. 2021 consolidated revenue: 3,009 million Euros.
Asian Metal: Hello Kristian, thanks for joining the interview. Kindly please give a brief introduction of your business.
Kristian Vorkapic: I would like to thank you for creating an opportunity to present our company to the global aluminum industry. Elixir Prahovo, subsidiary of Elixir Group, is family-owned company with a tradition of 51 years. Our core business is production of phosphoric acid in different levels of purity, vertically integrated to produce different kinds of commodity and specialty fertilizers, feed industry components and strategic raw material for aluminum industry. In terms of aluminum fluoride, in phase one, which we have successfully executed, we have achieved 5,000t per year of production capacity. In 2021, we will produce approximately 3,500t, as we started to operate commercially in the end of Q1. In 2022, we expect to achieve full production capacity of the phase one. Currently, phase three is in the consideration, which would bring an additional capacity of the production. This is related to our other businesses (namely phosphoric acid) and is not expected until 2025.

Asian Metal: How about the global aluminum market movement over the past two years? Could you give a brief review?
Kristian Vorkapic: Since the global outbreak of the novel coronavirus, the prices of aluminum have fallen by nearly 21% in 2020, as the global aluminum market witnessed diminishing demand from the key end-user industries, such as construction and transportation. Furthermore, the smelters also faced an increase in inventories, which also weakened the investment activities in the market. At the beginning of 2021, the markets started to recover from the consequences of the coronavirus pandemic, and producers started feeling optimistic. Concerning aluminum fluoride, we are observing an increase in demand due to the recovery of production of primary aluminium. Long-term contracts for supply are coming to an end and new negotiations are beginning, which creates an opportunity for all the smelters to consider a new potential source with strategic position in the Continental Europe. Both factors are providing us with an optimism for the upcoming period and we will be happy to explore all options with our partners.
Asian Metal: How about the aluminum fluoride market situation during the first three quarters of this year?

Asian Metal: Could you briefly explain the difference between low density and high density aluminum fluoride? What are the big challenges of your product?
Kristian Vorkapic: LD AlF3 is closely connected and dependent on the producers of phosphoric acid, while HD AlF3 is more flexible from the point of view of the production facility position. The global market of AlF3 is approximately 90% HD AlF3 due to higher production capacities of this technology, as the raw materials are more available. Nevertheless, LD AlF3, produced by Elixir Prahovo brings the following benefits to the smelters: firstly, Higher active content – typical 97% AlF3 vs. 91% HD AlF3, higher purity leads to lower dosing rate per ton of primary aluminum and higher purity of the final product; secondly, good flow-ability properties enable users to switch from HD to LD; thirdly, undesirable elements, such as P2O5, Fe2O3 and silica are one of the lowest available in the market. In addition, our investment worth 9 million US dollars, directed to the revamp of the old factory which was operating from 1982 to 1999, ensured the highest level of productivity due to state-of-the-art German equipment with the minimal impact to the environment due to usage of carbon neutral electricity, LNG and in-house produced raw material.
Asian Metal: Could you please explain briefly the dosing rate of LD and HD during aluminum production? And the difference of P2O5 and Fe2O3?
Kristian Vorkapic: LD can be dosed at 19kg on average per ton of primary aluminum and the average standard dosing rate for HD is around 20kg. P2O5 for LD and HD keeps at 0.015%max and 0.03%max respectively; Fe2O3 for LD and HD records at 0.02%max and 0.03%max.
Asian Metal: Do you sell in the domestic local market or export market? And what is the export market share? How do you think of the aluminum fluoride supply and consumption demand in Europe?
Kristian Vorkapic: We are currently focused on the European market, with the export share at 100% and export to Romania, Montenegro, Turkey and India. Additionally, due to good logistics connection, we will be trying to bring our material to the global market. As far as I know, the aluminum fluoride consumption in 2021 might reach 110,000t, a balance in demand and supply. We believe that supply and demand in Europe are well covered by reputable producers and that we will not have an easy task in establishing our presence. However, we are looking forward to the possibility of introducing our brand and quality to the market and we are excited by the challenge that lies ahead of us.
Asian Metal: What is your current mainstream offer for aluminum fluoride? Will the price go up in the coming three months?
Kristian Vorkapic: We are offering USD1,400/t FOB south Europe, and prices might continue to go up in Q1, 2022. We are observing positive movements in the market, caused by the increase of raw materials prices.
Asian Metal: Thanks again. Best wishes with you and your company!
Kristian Vorkapic: Thanks!