According to the Caixin app, East Money Information released a research report stating that fluorite is a 'world-class scarce resource', with prices recently reaching record highs. On the supply side, the total resources continue to shrink, with a single mine's reserves-to-production ratio of only over 10 years. On the demand side, it is estimated that around 9.74 million tons in 2023 and 16.72 million tons in 2030. The bank believes that new energy provides growth, while the demand for traditional refrigerants is steadily increasing. In the medium to long term, the demand growth rate for fluorite exceeds supply, and the price center is expected to continue to rise. Continued bullish on the industry leaders with resource, cost, and technological advantages. Recommendations include: China Kings Resources Group (603505.SH), Yonghe Shareholders (605020.SH), Zhejiang Juhua (600160.SH).

Key points from East Money Information are as follows:

Supply: The total resources continue to shrink, with a single mine's reserves-to-production ratio of only over 10 years.

Attributes: World-class scarce resource, strategic mineral, non-metal with fluorine.

Global: According to the 2022 data from the US Geological Survey, global fluorite reserves are approximately 0.26 billion tons, a decrease of nearly 20% compared to the previous year, marking the first decline in nearly 15 years.

Domestic: China's high-quality fluorite resources are scarce, with usable resources from single-type fluorite mines estimated at around 80 million tons, with a reserves-to-production ratio of only over 10 years.

Policy: In 2016, China included fluorite in the 'List of Strategic Minerals', increasing regulatory efforts and continuously raising industry entry barriers.

Demand: Traditional applications are not pessimistic, with emerging demands showing strong potential.

Total demand: The bank is expected to be around 9.74 million tons in 2023, reaching 16.72 million tons in 2030.

Segmented demand: Currently, the downstream is mainly for hydrofluoric acid, aluminum fluoride, further used in refrigerants, steel, new energy, and new materials.

Refrigerant: According to the 'Kigali Amendment' and the draft opinions of the Ministry of Ecology and Environment, China's HFCs

Baseline production value is 1.852 billion tCO2. Without increasing the total carbon dioxide equivalent, companies are allowed a maximum of 10% HFC quota adjustment. Unlike market views, the bank believes that the 'Kigali Amendment' targets the total carbon dioxide equivalent quota control as the compliance goal, which is favorable for the allocation of third-generation refrigerants to lower GWP value varieties, allowing for potential production increase. In addition, the higher fluorine content and higher consumption in the molecular structure of third-generation refrigerants will continue to maintain stable growth in fluorite demand. Furthermore, Southeast Asia, such as India, with rapid economic development, will drive future demand growth for air conditioner refrigerants.

New energy: Including photovoltaics (solar cells, fluoride back sheets, etc.), electric vehicles (electrolytes, PVDF, anodes, proton exchange membranes), wind power (FEVE), among others, will further drive fluorite consumption. The bank expects fluorite demand in the new energy sector to be around 1.54 million tons in 2023, accounting for 16%, and is expected to increase to 6.26 million tons by 2030, accounting for 37%.

Price: Reaching a historical high, ushering in a new cycle.

Long-term: Historically, prices have outperformed the CPI. The long-term logic is that fluorite, as a scarce resource, will see increased demand in emerging fields, maintaining a supply-demand imbalance.

Medium and short term: Since the new century, it has experienced three cycles, and 2023 may mark a new starting point. Recent: Continuously rising, with market quotes reaching 4000 yuan/ton on October 8, hitting a historical high.

Recommend focusing on: 1. China Kings Resources Group (Fluorite has continued to maintain stable reserves of 27 million tons) 2. Yonghe Corporation (Confirmed fluorite reserves reach 4.85 million tons of ore) 3. Zhejiang Juhua (The largest shareholder owns approximately 15 million tons of fluorite reserves)