SMM August 31 News: In August, domestic Pr-Nd alloy production rose 1.13% month-on-month and 13.05% year-on-year. By region, the commissioning of expansion projects at metal enterprises in Sichuan in the second half of the year led to a significant increase in operating rates, driving sharp growth in the region's Pr-Nd alloy output. Sichuan's single-province production jumped 12.16% MoM, serving as the core driver behind the overall monthly increase. Metal enterprises in Inner Mongolia, Jiangxi, Zhejiang, and Guangxi maintained stable order books and steady operating rates, with production flat MoM. As of August, Pr-Nd alloy production has achieved MoM growth for six consecutive months.
August supply-demand fundamentals: persistent oversupply weighs on prices
In August, the continued impact of the "summer break" in the downstream motor sector led to poor new order intake at magnetic material enterprises, causing their production to decline from July and weakening procurement demand for Pr-Nd alloy. Combined with further production growth on the metal side, the oversupply situation in the Pr-Nd alloy market continued. According to SMM data, the August supply-demand balance for Pr-Nd alloy stood at +422.29 mt, a surplus wider than July's +151.75 mt. Under the pressure of sustained oversupply, Pr-Nd alloy prices lacked upward momentum and remained under downward pressure throughout the month.
September outlook: fundamentals expected to turn around
Looking ahead to September, on the supply side, some metal enterprises in Inner Mongolia have scaled back processing orders, leading to a slight decline in operating rates and an expected MoM production drop of about 0.56% for Pr-Nd alloy—the first MoM decline since March. On the demand side, with the approach of the traditional "Golden September and Silver October" peak season, magnetic material companies have positive expectations for order scheduling, and procurement demand for Pr-Nd alloy is expected to gradually recover. Overall, the Pr-Nd alloy supply-demand balance is likely to shift from surplus to equilibrium in September, providing fundamental support for higher prices.
However, uncertainties remain: first, the actual realization of order schedules at magnetic material enterprises—if peak-season demand falls short of expectations, price upside may be limited; second, the pace of new Pr-Nd oxide capacity additions on the cost side—if raw material supply loosens, metal producers' quotes may face pressure; and third, the spillover effect of futures market movements on the physical spot market, which warrants ongoing monitoring. SMM will continue to track changes in Pr-Nd alloy supply-demand balances, price trends, and the fulfillment of downstream magnetic material orders.
