1. Key End-Use Sectors All Weakened in July
In July, demand for NdFeB magnets from China's three largest downstream sectors — new energy vehicles (NEVs), air conditioners, and washing machines — all slowed at the same time. Compared to the first half of the year, actual demand from end users dropped noticeably.
This was not caused by a single supply-chain issue. Rather, all major sectors pulled back at the same time. As a result, magnet makers mostly received small, need-based orders. Very few customers placed large or early restocking orders.
Here are the key figures for July:
- NEVs: Production reached 1.576 million units (+26.8% year-on-year), sales reached 1.561 million units (+23.7% year-on-year). NdFeB consumption: ~6,661 tonnes. Still growing compared to last year, but not increasing from June.
- Air conditioners: Output was 18.03 million units, down 29.6% from June. NdFeB consumption: ~1,643 tonnes.
- Washing machines: Export shipments fell 8.7% from June. NdFeB consumption: ~1,913 tonnes. Exports totaled 3.02 million units, about 35% of total output.
Total NdFeB consumption across these three sectors was clearly lower than the average monthly level in the first half of the year.
2. Auto Sector: Domestic Slowdown Masks Strong Exports
NEV production still grew compared to last July, but showroom traffic and new orders fell — a normal seasonal pattern. Two extra factors made it worse: (1) many buyers already purchased in June during mid-year sales promotions, and (2) extreme heat, typhoons, and flooding disrupted offline sales in parts of China.
Carmakers kept their basic production running but did not send any large new orders to magnet suppliers. The ~6,661 tonnes of NdFeB used in July shows that demand from EV motors is still there — just not enough to make up for weaker demand elsewhere.
Auto exports looked very strong in July: total vehicle exports hit 1.043 million units (+0.6% from June, +81.3% from last year). NEV exports alone reached 553,000 units (+5.7% from June, 2.5× last year's level). However, magnet demand depends more on domestic factory schedules and delivery timelines than on export shipments. The export boom did not offset the weak domestic sales caused by bad weather. Even export-focused EV brands kept their inventory plans cautious. Magnet suppliers could not increase their own purchases as a result.
Looking at August: NEV production is expected to be around 1.599 million units. The only meaningful increase will come from a small amount of restocking at the very end of the month. Early and mid-August will likely remain slow. Magnet producers will mostly use their existing inventory and fill long-term contract orders. Trading in standard magnet grades will stay quiet. Only high-end, heat-resistant grades — used in new car models and high-voltage platforms — will hold their pricing. But overall, this is not enough to bring magnet demand back to first-half levels.
3. Home Appliances: Bad Weather + Inventory Cuts Hit Air Conditioners Hard
The other big reason magnet demand fell in July was the air conditioner and white-goods supply chain. Unusual weather — heavy rain in northern and northeastern China, typhoons in southern and eastern regions — disrupted the traditional summer selling season. Fewer people visited stores, and installations were delayed. Dealers stopped stocking up. Appliance makers cut production and focused on clearing existing inventory. Air conditioner output dropped nearly 30% from June. Exports did not help much either — overseas shipment节奏 remained slow.
August forecasts: air conditioner production at 16.98 million units, washing machines at 9.20 million units. This is a slight recovery from July's low, but companies are still under pressure. Raw material costs remain high, and competition on retail prices is intense. Most producers will continue to control output and reduce inventory rather than ramp up.
Washing machine exports of 3.02 million units (35% of total) confirm that overseas demand is uneven. Global buyers haven't cancelled orders entirely, but shipments are not steady. This is partly due to uncertainty around shipping costs and trade policies, and partly because some overseas buyers placed orders earlier in the year. So exports are providing some support, but not enough to reverse July's weak domestic demand.
Smaller magnet producers cut output significantly during the slowdown. Larger manufacturers held steady thanks to long-term contracts and high-end motor orders. Across the industry, companies are waiting — using up current inventory first, then deciding on new purchases once prices and orders become clearer.
4. August: A Transition Month; "Golden September, Silver October" Likely Pushed Back
Putting everything together, SMM sees August as a transition month: overseas demand improves slightly, but domestic demand has not turned around yet.
August NdFeB export volume is estimated at ~5,500 tonnes — a small improvement, mainly from NEV exports and some overseas long-term contracts. But this alone is not enough. Domestically, air conditioner makers are still cutting inventory, auto restocking only starts at month-end, and washing machine exports remain soft.
At the same time, magnet producers don't want to buy raw materials at high prices when end-product prices are falling. Upstream smelters also can't easily cut prices because their own costs are high. This means magnet prices have a floor — but without a wave of new buying, neither magnet blanks nor rare earth oxides will see a strong upward move in August.
This brings us to the seasonal outlook. In China, "Golden September, Silver October" is the traditional peak season when factories ramp up production and restocking ahead of year-end demand. This year, that peak is likely to be delayed.
Why? In a normal year, the rebound starts in mid-August — carmakers push toward annual targets, wind and industrial motor producers lock in materials, and appliance makers restock for the fourth quarter. This year, July demand was weak across the board, and August only offers modest export gains plus some late-month domestic restocking. Magnet producers will likely keep inventories lean through early and mid-August. If restocking doesn't pick up until late August or even September, then September itself may not deliver the usual surge in orders and prices. The "Golden September" may be muted, and the "Silver October" could be pushed even later.
SMM's View
We do not see this as a breakdown in long-term magnet demand. The core drivers — EVs, wind power, home appliances — remain intact. What we are seeing is a short-term, multi-factor slowdown caused by bad weather, seasonal patterns, post-pandemic consumption softness, and intense domestic competition. The industry's seasonal cycles haven't disappeared — they've just shifted.
SMM will continue to track both end-user and magnet-market developments and provide updates.
Note for readers: "Golden September, Silver October" is a Chinese business term for the traditional autumn peak season (September–October), when manufacturing and consumer activity typically accelerate ahead of year-end.
