I. Total Volume and Operating Rate: Mild Expansion in September, Expected Acceleration in October
According to SMM survey data, in September 2026, the industry-wide NdFeB blank production was 32,349 mt, with an average operating rate of 75.68%, up 3.34% MoM. October production is expected to reach 34,014 mt, with an average operating rate of 79.57%, up 5.15% MoM. From both the total volume and operating rate perspectives, September output achieved only mild expansion compared with August, while the expected growth rate for October rises notably to above 5%, with the industry-wide average operating rate climbing from 75.68% to 79.57%. This pattern of "low growth in September, acceleration in October" contrasts with the traditional "September-October peak season" pattern of front-loaded volume release, essentially reflecting a delayed release of end-use demand and adjustments in magnetic material enterprises' production scheduling logic.
II. Enterprise Stratification: Top-Tier at Full Capacity, Mid-Tier at Half Capacity, Bottom-Tier Flat; Polarization Intensifies
From the perspective of enterprise stratification, September growth came mainly from top-tier players. Top-tier players ran at full order capacity in September, with operating rates generally above 80%, serving as the core force driving the industry-wide average operating rate to 75.68%. Mid-tier players varied, with average operating rates maintained at 65%, showing a clear gap from top-tier players, indicating that mid-to-high-end orders, stable client relationships, and delivery capability remain key determinants of operating rate levels. Bottom-tier players saw orders and operating rates basically flat MoM in September, with relatively small fluctuations, contributing little to the overall 3.34% MoM production growth. As a result, polarization in the magnetic material industry has become increasingly pronounced: top-tier players absorb industry growth through order density and higher capacity utilization rates, mid-tier players adjust based on orders and profit elasticity, while bottom-tier players are more constrained by client structure, grade capability, and working capital turnover, presenting an overall tiered pattern of "top-tier at full capacity, mid-tier at half capacity, bottom-tier flat."
III. Delayed Peak Season: September Did Not See the "September Peak Season" Pattern; Growth Shifted Later
It is worth noting that this year's September did not follow the usual "September-October peak season" pattern, but instead showed clear signs of delay. Compared with August, September production grew by only 3.34%, while October's expected growth rate is above 5%. The reasons for this shift in pace can be summarized in three aspects.
First, under the influence of the macro environment, September end-use consumption remained persistently weak. Demand growth from automobiles, industrial motors, home appliances, and certain electromechanical products was limited, weakening the growth momentum for NdFeB blanks, and enterprises lacked strong end-user order drivers for production scheduling.
Second, although inquiry frequency in markets outside China remained at a relatively high level, actual demand was limited. Additionally, relevant authorities strengthened export verification, and extended procedures led to delayed delivery schedules for overseas clients, making it difficult for these orders to be reflected in September production. From August to September 2026, NdFeB exports overall exhibited characteristics of "slower procedures and more detailed scrutiny," with stricter verification of end-use applications, purchasing entities, resale risks, and military sensitivity. Some orders experienced extended customs declaration and certification cycles, though no comprehensive ban was imposed. During the scrutiny refinement phase, even with active inquiries, actual shipments and factory revenue recognition could still be postponed.
Third, and most importantly, Pr-Nd alloy prices remained stable at high levels in September. Motor and end-user enterprises, amid the sluggish macro environment, were more inclined to operate at low inventory levels, making only just-in-time procurement and reducing uncertain stockpiling that would tie up working capital. In September, the light rare earth Pr-Nd series remained relatively strong overall, with Pr-Nd oxide and Pr-Nd alloy consolidating at highs on multiple occasions. Downstream magnetic material enterprises and end-users showed reduced purchase willingness at high prices, with procurement mainly driven by immediate needs. With the cost side not declining and the demand side not releasing volume, stockpiling decisions shifted from "seasonal front-loading" to "restocking after order confirmation."
IV. Shift in Stockpiling Logic: Demand Deferred Under Low-Inventory Strategy
Under the combined effect of the above three factors, stockpiling that would normally have been completed in September was deferred to October, the first month of Q4. For magnetic material enterprises, low-inventory operations reduced the risk of price declines from pullbacks, but also compressed the order base for blank conversion in September. For motor and end-user enterprises, high Pr-Nd alloy prices meant higher raw material holding costs. Given uncertainties in end-user selling prices and shipment volumes, postponing bulk stockpiling and switching to small-batch replenishment based on production schedules represented a more prudent working capital management approach. Therefore, the 3.34% MoM production growth in September should not be simply interpreted as weak demand, but rather as a widening time lag between order confirmation and blank production scheduling.
V. October Outlook: Deferred Demand Rebound Combined with Q4 Volume Push
Based on SMM expectations, October industry-wide NdFeB blank production is projected at 34,014 mt, with an average operating rate of 79.57%, up 5.15% MoM. The core support for this expectation is not a sudden shift in new macro demand, but rather the lagged effect of September demand combined with early stockpiling for Q4 end-user volume pushes. On one hand, orders that were not converted into blanks in September due to export verification, low inventories, and price wait-and-see attitudes will enter production schedules in October. On the other hand, Q4 NEV, wind power, industrial motor, and certain export deliveries have annual volume push requirements. End-users, to avoid subsequent delivery uncertainties, may lock in magnetic material supply earlier than in previous years. If overseas verification procedures continue to advance with complete documentation, end-use information, and end-user materials, some deferred orders are also expected to be gradually confirmed in October and Q4, thereby supporting top-tier players in maintaining operating rates above 80% and driving the industry-wide average operating rate toward 79.57%.
VI. Summary
Overall, September data reflects a "delayed peak season" rather than a "disappearing peak season." The industry-wide 32,349 mt and 75.68% operating rate constitute a mild baseline, while October's 34,014 mt and 79.57% operating rate reflect the rebound of deferred demand. At the enterprise level, the pattern of top-tier players at high capacity, mid-tier players averaging 65%, and bottom-tier players flat is unlikely to change in the short term. Industry resources and orders will continue to concentrate among top-tier players with strong delivery capabilities, complete compliance materials, and comprehensive grade coverage.
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