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Exclusive: China's Metals Output in January
Feb 16, 2022 13:25CST
The overhaul impacted the output of a large smelter in the south by a combined 40,000 mt across its three smelters, which exceeded expectations.

SHANGHAI, Feb 16 (SMM) — This is a roundup of China's metals output in January 2022, from an exclusive survey of key producers by SMM analysts.

Copper Cathode

In January, the SMM domestic copper cathode output was 818,100 mt, down 6.0% MoM and up 2.5% YoY.

The overhaul impacted the output of a large smelter in the south by a combined 40,000 mt across its three smelters, which exceeded expectations. At the same time, the shutdown of Fangyuan and the overhaul of Lanxi Zili all slightly influenced the output of smelters in January to a certain extent. Hence the output of copper cathode in January was far less than expected. From the historical data, the relatively short statistical period of some smelters also reduced the output. The overall raw material side operated relatively loose. The copper concentrate stocks in smelters were relatively abundant. Long-term orders were mainly executed in inactive spot market and disadvantaged spot prices in the first quarter. Besides, the gradually eased transportation interference at the northern port contributed to the loose copper concentrate supply. The output of smelters affected by blister copper in the early stage will gradually return to normal with the global supply chain problem of crude copper alleviated. Domestic smelters can guarantee their profits regardless of the dropped sulphuric acid prices compared with the second half of 2021. In addition, TC was operated at a high level. It is expected that domestic smelters will maintain a high output enthusiasm in 2022.

Judging from the smelter plan in February this year, the output recovered obviously with the gradual recovery of a large smelter in the south from the overhaul. But the restrictions of the Winter Olympics suffered by some smelters in the north slightly affected the output of copper cathode. Besides, February has fewer days compared with other months. So, the overall output did not rise significantly. SMM expects domestic copper cathode output will be 820,200 mt in February, up 0.3% MoM but down 0.2% YoY.


SMM data showed that in January (31 days), China’s alumina output was 6.501 million mt, of which metallurgical grade alumina was 6.281 million mt. The average daily output of metallurgical grade was 203,000 mt, down 1.3% MoM and up 10.4% YoY. Air pollution prevention policy affected the production stability of the roasting link of alumina plant in Shanxi, Shandong and Henan in January, resulting in a decrease in the output of these areas compared with the previous month. However, the decline of the total output of alumina in China was limited compared with last month, mainly due to the smooth operation of southwest China. The strong rebound of alumina prices in mid-January stimulated some manufacturers to have full and over production. The net imports of alumina was estimated to be around 200,000 mt, and China alumina surplus was about 333,000 mt in January. The production of 1 mt of aluminium consumes 1.925 mt of alumina.

As of end January, China's metallurgical grade alumina operating capacity was 73.95 million mt/year, with the installed capacity at 93.80 million mt/year. It is expected that in February, the heavy air pollution will be strengthened, and the alumina in the north will have strong expectations of output cuts. The output of the metallurgical grade alumina is expected to be 5.34 million mt in February (28 days) and around, and the alumina surplus is expected to be around 120,000 mt.


According to SMMM, China produced 3.204 million mt of aluminium in January (31 days), up 3.6% MoM. The daily output averaged 103,000 mt, up 1,000 mt/day on the month. The annual output was about 37.6 million mt. In January, the proportion of aluminium and aluminium liquid in domestic was about 64.2%, down 1.3% compared with December MoM, and up by 0.8% YoY. In January, the operating capacity of domestic aluminium continued to rise, among which Yunnan, the east Inner Mongolia, Guizhou, Shanxi and other places continued to increase their production capacity in the early stage, and aluminium plants continued to resume production during the month. Domestic’s operating aluminium capacity stood at 38.38 million mt in the end of January, an increase of 680,000 mt compared with the end of December. The installed capacity was 43.97 million mt. The operating rate of aluminium enterprises in China was about 87.3%. 

In February, considering the 300,000 mt output of the domestic aluminium suppliers’ resumption of production in Yunnan, Inner Mongolia and Qinghai, the continuous contribution of the previous resumption capacity, and the 420,000 tons production reduction caused by the epidemic in Guangxi Baikuang area, it is estimated that the average daily output of domestic aluminium will slightly increase to 104,000 mt/day in February, and the domestic aluminium output is expected to be around 2.91 million mt in February (28 days). On the demand side, in February, domestic downstream consumption of aluminium will drop sharply from the previous month due to the influence of the Spring Festival holiday, and downstream processing enterprises in Henan, Shandong and Hebei were affected by environmental protection control and other reasons, so their construction started later than in previous years. It is expected that domestic aluminium ingot inventory will continue to accumulate in February, and it may increase to 1.1 million mt at the end of February.

Primary lead

In January 2022, China produced 273,500 mt of primary lead, down 1.42% MoM, and up 4.68% YoY. Production capacities of enterprises involved in the survey totalled 5.48 million mt in 2022. In addition, from 2022, the Hulunbuir factory under Chihong Zinc & Germanium began to produce refined lead products with an annual production capacity of 60,000 mt. Danxia factory under Zhongjin Lingnan was scheduled to resume production in the second quarter of 2022, with an annual production capacity of 120,000 mt.

It is reported that in January, due to the recovery of refined lead smelters after overhaul (such as enterprises in southwest Guangxi, Shuikoushan, Hunan, etc.),the output of current month was expected to increase by nearly 10,000 mt at the beginning of the month, but the actual situation was not as expected.  The main reason was that the Spring Festival holiday was approaching. Small and medium-sized enterprises in Henan, Hunan, Yunnan, etc., either directly stop production for the holiday or enter the maintenance state, so the output of that month was roughly offset.

In February, domestic primary lead output is expected decrease, with a drop of about 30,000 mt to 243,600 mt. According to the survey, during the Chinese Lunar New Year in February, small and medium-sized enterprises usually have holidays or carry out equipment maintenance, so their output is reduced to varying degrees. Besides, February (the natural month) have only 28 days, which is 2-3 days less than other months, thus, the output of production enterprises has decreased simultaneously. Moreover, Anyang Minshan plans to enter maintenance in February, which further drags down the monthly decline of primary lead production.

Secondary lead

SMM’s preliminary survey data showed that China produced 346,500 mt of secondary lead in February, down 6.28% from MoM, and up 5.96% YoY. The output of secondary refined lead was 317,200 mt, down 5.18% MoM, and up 3.24% YoY.

According to SMM, the reasons for the decline of secondary lead are as follows. First and foremost, the Spring Festival holiday is approaching. Secondly, the weather turns cold. The output of most smelters in northern China, such as Inner Mongolia Jinfan, Senrun, Xinjiang Camel, Shanxi Yichen, etc., has declined. Guangdong Xinyu, Hongxing, Zhejiang Tianneng, etc. have also reduced their output for the Spring Festival holiday. Thirdly, the internal adjustment of Anhui Huaxin has not completely ended, and it failed to produce within the month. Meanwhile, under the disturbance of epidemic at the end of the year, logistics in Henan, Hebei and other places was limited, and it was more difficult for smelters to purchase waste batteries, so the output decreased. Although Anhui Huabo resumed production following maintenance in the second phase of the month, contributing more than 10,000 mt of increment, the overall output of secondary lead did not change the downward trend. In February, during the Spring Festival holiday, most of the small-scale secondary lead factories stopped production, and other enterprises concentrated maintenance during the off-season from February to June. The output of smelters such as Jiangxi Fengri and Zhejiang Tianneng was expected to have a further decline. At the same time, cold weather in the north dragged down the enterprises’ resumption of production after the CNY holiday. On one hand, the output of some smelters in Inner Mongolia declined significantly, and the epidemic disturbance continued to increase the difficulty of purchasing waste batteries in some areas. On the other hand, Hebei and its surrounding areas were affected by the tightening of environmental control during the Winter Olympics and the Paralympics. It is expected that the production will be limited, and the output of secondary lead will drop sharply in February.

Refined zinc

China's refined zinc output was 517,600 mt in January, 2022, up 4,300 mt MoM or 0.83% MoM, down 4.56% YoY.

SMM survey showed that China's refined zinc output in February basically met expectations to decrease. Reasons for the increase in output: firstly, Wenshan Zinc and Indium, Yunnan resumed production after maintenance, which brought major increase; secondly, some smelters in Shaanxi increased production, but the output was less than expected; finally, some smelters in Gansu resumed normal production. Reasons for the decrease in output: firstly, some small and medium-sized smelters in Hunan began to stop production during the Spring Festival holiday in the middle and late January, which led to a major reduction; secondly, maintenance and shutdown of some smelters in Guangxi; finally, production control of some smelters in Sichuan.

SMM estimates that the domestic refined zinc output will decrease by 64,600 mt to 453,000 mt in February 2022, which is significantly lower than that in January and 18,200 mt or 3.87% lower than that of last year. From January to February 2022, the refined zinc cumulative output was 971,000 mt, down 4.23% YoY. According to the investigation, the reasons for the sharp decrease in output were as follows: Firstly, small and medium-sized smelters in Hunan stopped production due to the Spring Festival holiday, and the shutdown period was prolonged compared with last year. Some enterprises will resume production in early March, which will bring about a major reduction. Secondly, some smelter in Gansu planned to overhaul, so the output was reduced. Thirdly, some smelters in Yunnan overhauled for 10-15 days, thus the output was reduced. Fourthly, in addition to the production control of some smelters in Sichuan, some other smelters stopped production during the Spring Festival holiday. Fifthly, because of the suspension of production for maintenance and technical transformation, smelters in Guangxi planned to resume production in March. Last but not least, the output is influenced by the number of days as the working day in February is 28 days.

SMM data showed that China's refined zinc output increased by 76,000 mt to 529,000 mt, with a large increase of 32,100 mt compared with last year. Due to the increase of working days in March, the output affected by the number of days rose to 29,100 mt. And the resumption of production from previous holiday shutdown or maintenance. Compared with last year, the main reasons were as follows: Firstly, in the same period last year, there was a double control effect of energy consumption in Inner Mongolia. Secondly, some smelters in Gansu stopped operation in the same period last year. Finally, Xinjiang Zijing was still in the cycle of gradually releasing output.

Refined tin

According SMM, China's refined tin output revised to 13,589 mt, which was 2.94% lower than that in December. The reason for the MoM decline of domestic refined tin output in January was that the output of smelters in major producing areas in China decreased before the Spring Festival shutdown. Specifically, by region: First of all, in January, the output of smelters in Yunnan increased against the trend from the previous month, mainly because smelters with relatively large output in the region did not plan to stop production during the Spring Festival. However, smelters with shutdown plan had little influence on the actual production time of the month due to their late holiday arrangement. Besides, smelter, which had been overhauled for nearly a month, resumed production in January, contributing to the increase of total output in the region. Secondly, affected by the suspension of production during the Spring Festival and the reduction of mining stone raw materials at the end of the year, the output of smelters in Guangxi dropped greatly. Thirdly, the output of smelters in Jiangxi decreased slightly MoM. The main factors also came from the expected reduction of production caused by the shutdown during the Spring Festival. Lastly, the output of other regions also decreased in January compared with December. Some smelters were in their holiday earlier than Yunnan and Jiangxi in the same month, which largely declined the overall output in January.

Since the Spring Festival holiday time of smelters with large production capacity is concentrated after January 25th, the actual production time has not been significantly affected, which causes the little impact on the overall domestic refined tin output in January. However, although the smelters that resume work after the holiday have started one after another, it still take some time to return to the normal output level, which results in that the impact of the current smelter's Spring Festival shutdown on the reduction in February is expected to be stronger than that in January. To sum up, SMM expects the domestic refined tin output to be 12,120 mt in February, which is brought by the short actual production cycle of smelters in February and the expectation of post-holiday maintenance in individual smelters.

Refined nickel

In January 2022, China produced 12,000 mt of refined nickel, down 20.4% MoM, and up 7.94% YoY. The output decline in January was mainly influenced by the difference between natural month and fiscal month in large smelters in Gansu. Besides, the tight supply of raw materials also led to a partial reduction. However, the production in Xinjiang and Jilin is relatively stable.

Output of refined nickel is expected to stand at 13,200 mt in February 2022, up 10.5% MoM, and down 3.5% YoY. Compared with the normal output, the monthly output declines in February, which is mainly caused by the reduction of output in natural days and the expected reduction brought by raw material supply problems.


According to SMM, China’s output of NPI stood at 32,400 mt in January, down 2.4% MoM, and down 16.09% YoY largely. The output of high-grade NPI stood at 27,400 mt (Ni content) in January, down 1.1% MoM, and the output of low-grade NPI was 4,900 mt (Ni content), down 9.2% MoM. In January, due to the influence of environmental policies and the CNY holiday, the output of NPI smelters in Shandong and the output of integrated stainless steel plants decreased, which had a certain but small impact on NPI production.

In February 2022, the output of NPI may be 29,100 mt (Ni content), down by 10.2% from the previous month. According to the grade, the output of high-grade NPI is 24,000 mt (Ni content), and that of low-grade NPI is 5,200 mt (Ni content). The reasons are, firstly, fewer natural days in February brings a small reduction in output. Secondly, the NPI smelters in Hebei, Shandong and other regions are in a state of varying degrees of stopping and reducing production for most of the time in February due to environmental policies, which have a significant impact on the domestic NPI output.

Nickel sulphate

According SMM, China’s output of nickel sulphate stood at 26,100 mt in metal content in January 2022, or 118,600 mt in physical content, down 6.25% from the previous month but up 62.9% YoY. In January, affected by the sharp increase of nickel prices, the price increase of raw materials exceeded that of products under the background that there was no shortage of nickel sulphate supply. Salt plants and integrated producers had high cost, and they acted to reduce production and their losses. From the proportion of raw materials, the upstream crystal salt plants reduced production mainly, the main raw materials still come from nickel briquette and nickel powder, thus the consumption of nickel briquette has little change. The proportion of nickel briquette and nickel powder used in January was close to 54%. The average daily nickel sulphate output was 26,300 million mt (Ni content), up 0.95% MoM, and up 74.73% YoY. Although the number of natural days decreased in February, the output in this month was basically the same as that in January due to the increase in the output of large plants. Recently, the circulation of nickel sulphate spot market is decreased due to the reduction, and the price is expected to rise further.

Battery-grade manganese sulphate

According to SMM, China's battery-grade manganese sulphate output stood at 22,000 in January, down 12.4% MoM.

Before the Spring Festival, the overall purchasing demand of high-purity manganese sulphate in terminal material factories decreased, and some terminal manufacturers had determined the order next year before the end of the current year, so there was not much sporadic demand release in the market. Some domestic high purity manganese sulphate manufacturers completed the production expansion plan by the end of 2021, and the market supply was slightly in excess, so the specific procurement will continue to wait and see after the Spring Festival.

High-carbon ferrochrome

SMM’s preliminary survey data showed that the output of domestic high-carbon ferrochrome fell in January, down by 12.79% from the previous month to 557,200 mt, up by 30.4%, 129,900 mt. The output in Inner Mongolia was 294,800 mt, a decrease of 11,900 mt or 3.88% from the previous month. In January 2022, high-carbon ferrochrome declined slightly from the high output in December 2021. The high cost of electricity in Guangxi, Guizhou, Hunan and other places, the falling price of ferrochrome, and the cost inversion problem of some ferrochrome plants, forced the plants to stop or reduce production and repair equipment. However, with the simultaneous reduction of stainless steel production, the supply of ferrochrome market remained loose in the early stage.

In February, the output of high-carbon ferrochrome is expected to continue to decline. The reduction of stainless steel output will continue, and the consumption of ferrochrome market will be weak, so the price is hard to rise. The cost pressure of low-profit ferrochrome plants is still high. Although the electricity charges in Guangxi and Inner Mongolia will be reduced, the cost in other regions will not change, so the reduction of output will continue.

Stainless steel

According to SMM investigation, the domestic stainless steel output totalled 2.3172 million mt in January, which decreased 274,000 mt compared with December, down 13.5% MoM, and 13.1& YoY. The output of #200 series stainless steel in January was 640,000 mt, down 22.81% YoY. The annual output of #300 series stainless steel was about 1.256 million mt, an increase of 1.35% YoY. The annual output of #400 series was about 422,000 mt, down 29.56% MoM.

In January, stainless steel plants in South China and other regions were overhauled, and the output dropped sharply. Then in February, due to the Spring Festival holiday and the influence of activities held in the northern region, some steel makers were in a state of load reduction or even shutdown in early February. Besides, the natural days in February decreased by three days. Therefore, it is estimated that the total stainless steel output in February 2022 will still decrease slightly compared with that in January with a decrease of about 1.96% from the previous month. The output of #200 series stainless steel in February 2022 is about 605,000 mt, down 34,700 mt MoM. The output of #300 series stainless steel is about 1.244 million mt, down 12,300 mt MoM. The output of #400 series stainless steel is 423,000 mt.


According to SMM’s investigation, the domestic EMM output in January stood at 13,000 mt, down 86% MoM, and down 88% YoY.  The average monthly ex-works price of EMM in January was 40,842 yuan/mt, an increase of 4.1% from the previous month. The average monthly FOB price of EMM was $6,484/mt, an increase of 3% from the previous month. According to SMM, in January 2022, the operating rate of domestic EMM plants was nearly 6%. The atmosphere of the CNY holiday in the upstream and downstream enterprises of EMM chain was strong. Although there were social inventories, the reluctance to sell was obvious. In addition, SMM expects that the operating rate of EMM plants will not increase significantly in the short term after the Spring Festival, so the wait-and-see sentiment will continue.

Silicon metal

According to statistics from SMM, China’s output of silicon metal in January is 248,000 mt, decreasing 7.9% from previous month but increasing 8.7% from last year.

Sichuan province and Yunnan province, the main silicon-producer areas located in southeast China, witnessed a fall in production during operation resuming period. Meanwhile, the silicon production in Fujian province, Hunan province and Shaanxi province also saw a decline in January because furnace in such areas were under maintenance, leaving its production lower than that in last December.

In February, the southwest region in China will remain in its dry season, ensuring little change in production compared with previous month even when they resumed operation; while most regions will go back to their operation after maintenance around March, thus ensuring a large possibility of relatively stable production of silicon metal. However, considering the month period of February is shorter than other months, the expected production will remain its tendency to decrease compared with last month.


China’s total output of Polysilicon in January, 2022 was 50,500 mt, increasing 3.5% from previous month and 38.7% from last year. The participation of Tongwei, Dauqan, Jonoon and other new energy production motivated capacity in January, ensuring greater production than last month. However, constrictions such as limited electricity lowered the pace of new energy production development than expected.

With the overall capacity gradually rising, daily output of polysilicon in February will as well mount. The relatively short working days in February will ensure that the total output of February is almost the same with that in January.

Silico-manganese alloy

As shown from the initial research data, the total domestic production of Silico-manganese alloy is around 877,100 mt, increasing 10.4% than previous month and decreasing 9.7% from last year. Since the end of last December, end demand side has showed a slightly positive attitude towards Silico-manganese alloy, leading a small increase in its price- that is around 8000-8200 yuan/ mt (cash price) offered by major orders in January. Meanwhile, at the beginning of the year of 2022, all producers started to reassume their energy consumption, unleashing some capacity; besides, the number of orders increased made willingness to retail goods weak and aspiration to increase price strong. We believe that there would be little space for demand side to do in order to improve in the first quarter, and the cost side  would be the main factor to manipulate the price of Silico-manganese in later days. There should be more attention on relevant policies and changes in the cost of Silico-manganese.

Magnesium Ingot

As shown from the initial research data, China’s output of Magnesium Ingot in January is 80,700 mt, increasing 20.08% from previous month and 22.10% from last year. This year, China’s accumulated output is 80,700 mt, increasing 22.10% from last year.

Shanghai, SMM-our researches showed that China’s exportation in last December reached 30,900 mt, decreasing 14.6% than previous month. Considering a considerable fluctuation in its price during six months, the risks of downstream purchasing part increased; what’s more, the uncertainty of policies may urge clients overseas to rise their stock for a quarter in order to ensure ample supply of raw materials. Both factors may lead to a possibility that overseas demand for the first quarter in 2022 would be unleashed in the fourth quarter in 2021. The Magnesium in the first quarter of 2022 may meet a negative market where domestic supply rapidly increases but overseas demand decreases. From production schedule of current Magnesium factory, there would be no plan for production reduction or suspension for factories working in Magnesium industry during Chinese Spring Festival holiday. The supply of Magnesium Ingot in February will remain high, to the extent of 81,000 mt.

Magnesium alloy

As shown from the initial research data, China’s output of Magnesium alloy was 21,900 mt, increasing 7.58% than previous month and decreasing 36.05% of last year. The accumulated output was 21,900mt, decreasing 36.05% of last year.

According to SMM’s researches, 38.54% of factories engaged in Magnesium alloy industry resumed their operation in January, increasing 2.52% from previous month and decreasing 39.06% from last year. At present, orders in overseas market of Magnesium alloy remain hot, where leading companies keep a relatively large proportion in resuming operation and medium and small-companies saw a slightly increase in production. A salesman in a magnesium alloy company told us that production schedules in February is full and factories are busy recently, and there would be no plans for production reduction or suspension in the tradition Chinese Spring Festival. Taking consideration of a lasting robust overseas demand and large proportion for large companies to go back to their work, the medium and small- companies in this industry are likely to win some orders. What’s more, it is estimated that the output of magnesium alloy will remain high supported by overseas demand, reaching around 22,000 mt.

Magnesium powder

As shown from the initial research data, China’s output of magnesium powder in January is 8,600 mt, decreasing 10.31% than previous month. 50.30% of the overall companies engaged in magnesium powder resume their operations

Affected by pandemic occurred in Henan and Tianjin provinces, the supply of magnesium powder in January decreased slightly. A leader in a magnesium powder factory told us that, at present, production are gradually going back to normal. Besides, they still had several orders in hand, and their factories will maintain normal production in the traditional Chinese Spring Festival in order to hand over all these orders. Considering a certain number of magnesium powder orders were stocked because of epidemic, and an obvious demand for replenishing their warehouse in the downstream market after the festival, it is expected that domestic magnesium powder production will increase to 9,000 mt in February.

Neodymium praseodymium oxide

As shown from the initial research data, China's output of praseodymium and neodymium oxide in January was 6,250 mt, a slight increase of 1.6% from the previous month. The main increase comes from some NdFeB scrap enterprises in Jiangxi province and the enterprises working in separation and smelting metals in Sichuan province, among which the main decrease comes from companies in Sichuan.

From the supply side of NdFeB scrap, some NdFeB scrap enterprises in Jiangxi are expected to expand production in the first quarter, and January is their first trial. However, the NdFeB scrap enterprises usually suspend their production for maintenance in February, thus the supply of neodymium praseodymium oxide from the NdFeB scrap will decrease in February in the short term.

From the supply side of rare earth mines, the production of praseodymium and neodymium oxide continued to be as stable as that of last month in Inner Mongolia, Shandong, Gansu and other areas in need of light rare earth mines. At present, the output of upstream oxides can not satisfy the continuously expanding needs for NdFeB production and other ends. Furthermore, problems still exist such as insufficient indicators for separation and smelting in the progress of expanding production for enterprises in areas using light rare earth mines. Due to the earlier shutdown and maintenance in January, the output of such enterprises in Sichuan was reduced.

Most enterprises engaged in separation located in Jiangxi, Hunan, Guangdong, Guangxi provinces-areas where medium and heavy rare earth mines are used, remained their output of praseodymium and neodymium oxides to the relatively low level in last December, and temporarily stable in January. Such regions are highly dependent on Myanmar’s imported rare earth mines, which though were allowed to import, still pressed by procurement costs and indicators related to separation and melting. All enterprises in such areas were away from production increase in January, and part of them are about to face production suspension in February. Production of praseodymium and neodymium oxide is expected to shrink slightly in February.

Praseodymium neodymium metal

As shown from the initial research data, China's output of praseodymium neodymium metal was 5394 mt in January, decreasing 4.1% of previous month. Companies engaged in metal industry in Inner Mongolia and Sichuan province made largely devotion, whereas companies engaged in metal industry in Sichuan province cut their production.

Demand side in new energy vehicles, wind power and other fields are strong, and large-scale magnetic material enterprises were endowed with sufficient orders. In order to meet the requirement of the expanding NdFeB production and other terminal needs, metal enterprises in Inner Mongolia and Sichuan provinces increased their production, ensuring a continuous increase in production from last December and this January. A large rare earth company in north-China carried out a new layout of metal industry and the expansion of praseodymium and neodymium metal production line. Some metal companies in Inner Mongolia that have bids with other northern companies working in rare earths increased production in January. However, due to poor operation of some metal factories in Sichuan province and limited funds for procurement, the output of praseodymium and neodymium metal decreased in January.

The output of praseodymium and neodymium metal in Jiangxi, Hunan, Guangdong and Guangxi where medium and heavy rare earth mines are used remained stable compared with last December. With January, the period of surge in purchasing, passed, most metal factories have finished their preparation of raw materials stocks needed for recent production.

Due to large equipment consumption caused by the shutdown of electric furnaces in metal factories, most metal factories maintained normal production during the Spring Festival, and only a few metal factories reduced capacity of some production lines. It is expected that the production of praseodymium and neodymium metal will remain the same with previous month.

The downstream demand is strong, and the rare earth metal inventory of some magnetic enterprises is exhausted. It is expected that the procurement for praseodymium and neodymium products will rise again in February, and the supply side will be tightened as a whole. It is expected that the gap between supply and demand in the rare earth market will expand in February.

Molybdenum concentrate

According to statistics from SMM, domestic output of Molybdenum concentrate in January 2022 was about 19400 mt, decreasing 2% of previous month.

The domestic production of molybdenum concentrate in January decreased slightly compared with the previous month, and some mines in Hebei were still suspended due to the Winter Olympics. In the first half of the month, the bright future of terminal demand and the continuously increasing price of molybdenum concentrate mobilized some mine production to a certain extent, with operation resumption rate presented a significant increase but in the late ten days, when the Spring Festival is approaching, the mines were suspended for holidays one after another, significantly affecting output and overall output immediately fell


SMM-the production of domestic Ferromolybdenum was around 15900 mt, 1900 mt less than that of last December, decreasing 10.67% compared with last month. China witnessed short supply of Ferromolybdenum

According to SMM, the main reasons for the decrease in domestic ferro-molybdenum production in January are as follows:

1. In the first half of the month, the consumption of stocks and the improvement of domestic market made some molybdenum mines reluctant to sell their products, thus it was difficult to gain products. In such condition, some melting enterprises have to reduce production capacity in consideration of raw materials.

2. In the second half of the month, the sudden and sporadic outbreaks of the epidemic in our country influenced the production and transportation of some enterprises reducing the operating rate in some areas to a certain extent.

3. January, the end of Chinese lunar year and the beginning of Winter Olympics, the Liaoning province put forward the “look back inspection” initiative for environmental protection. Although the overall operation resumption rate of ferro-molybdenum was not fundamentally affected this time, it still weakened the supply of ferro-molybdenum to a certain extent.


According to SMM statistics, China's 1# silver production was actually 1,216.35mt (of which mine silver production was 1,058.022mt) in January 2022, decreasing by 1.79% month-on-month, and the overall output decreased slightly. As to the macro side, the U.S. CPI index rose 7.5% year-on-year calculated at the end of January, hitting a 40-year high. The Fed’s expectations for interest rate hikes thus further strengthened. The yield on the 10-year U.S. Treasury bond exceeded 2%, hitting a new two-and-a-half-year high. The rapid rise in inflation is largely due to a mismatch between supply and demand. At the same time, the steady rise in prices has damaged recent wage and weakened the purchasing power of American families, thus hurting U.S. economy. Therefore, the macroeconomic pessimism towards the U.S. economic growth also affected the trend of silver prices in January, which still showed constant back-and-forth box fluctuations. As the Spring Festival is approaching, desires for trading were still low, leaving price fluctuated and prospects weak. A rebound occurred but the price still falls back to its original position, showing its insufficient strengths. It is estimated that the price of silver will continue to fluctuate in February, without leaving much room to robust. The price, 4600 yuan/mt, still faced great pressure from downstream. There are small transformations in the overall production of manufacturers in January. From production statistics in January, output was increased in some factories and decreased in other factories.

Companies with significantly reduced output this month include Shandong Hengbang Metallurgy, Henan Jinli Gold and Lead, Yunnan Zhenxing Industry, Zijin Mining, Guiyan Platinum, and Jinlong Copper. There are also companies with increased production, such as Jiangxi Copper, Hunan Shuikoushan, Zhejiang Hongda, Zhejiang Yadong Industrial. Their increase is the result of the gradual resumption of production and recovery after production reduction at the end of last December. This month saw output increased to varying degrees, but the overall range is small. Although this condition offset silver supply reduction from some other manufacturers, the overall output is still slightly decreased. It is expected that due to fewer working days in February, national silver production may show a certain reduction.

Titanium dioxide

According to the initial survey data of SMM, China's titanium dioxide production in January was 320,100 mt, an increase of 4.38% month-on-month and a year-on-year increase of 3.68%. The cumulative output was 320,100 mt, a year-on-year increase of 3.68%.

As some factories in titanium dioxide industry completed regular maintenance in last December. The overall output of titanium dioxide this month increased by about 15,000 mt compared with the previous month. According to the existing factory production schedule, the titanium dioxide factory had no plan to reduce or stop production during the Spring Festival. On the basis of the current overall improvement in overseas demand, domestic demand for titanium dioxide is expected to recover after the end of the Spring Festival holiday. It is expected that under the support of the demand side, the total domestic production of titanium dioxide will maintain a positive growth in February, about 325,000mt.

Cobalt sulphate

In January 2022, China's cobalt sulphate production was about 6,488 gold mt, an increase of 15% month-on-month and 32% year-on-year. On the supply side, the two leading cobalt salt companies resumed their production, plus some companies switched their production ratio and some companies completed their regular maintenance, increasing supply on the market profoundly. On the demand side, as the end of the year approaches, purchasers have basically finished their preparation for this period. The output of four cobalt and precursors has increased slightly, spurring slightly the demand side. Although there has been much stock in warehouse this month, the price of cobalt salts continued to rise due to the continuous upward rise of raw material costs in the early stage. After entering February, during the Spring Festival, nearly half of the cobalt salt factories have holiday or maintenance plans, plus fewer working days for production, thus ensuring a declined supply. On the demand side, the output of precursors and tetracobalt has declined, and the demand for cobalt sulphate also showed a slight downward trend. In February 2022, cobalt sulphate production is expected to be 5,235 mt, a decrease of about 19% from the previous month, a year-on-year increase of 27%.

Lithium carbonate

In January 2022, China's lithium carbonate production was about 18,844 mt, a decrease of 8% month-on-month and a year-on-year increase of 48%. In January, the major domestic factories in Sichuan and Jiangxi provinces shut down for maintenance, which lasting for 5-30 days before or during the Spring Festival. At the same time, due to the lack of mines, some medium-sized smelters were shutdown. Whereas on the demand side, it is difficult for downstream enterprises to cut their cost under the circumstances that the price of lithium carbonate continues to rise. Besides, procurement becomes more difficult because the overall price was still high and raw materials are in shortage even demand were getting slightly weak, thus imposing continued high price of lithium carbonate. In February, the supply of some lithium carbonate manufacturers will rebound slightly as they gradually go back to work. However, considering the number of working days is less in February, the output of lithium carbonate is expected to slightly rebound to 19,396 mt in February 2022, an increase of 3% month-on-month and a year-on-year increase of 57% .

NCM cathode material

In January 2022, the output of NCM cathode material was approximately 46,262 mt, a decrease of 2.3% month-on-month and an increase of 52% year-on-year. As the output of some manufacturers returned to normal levels after the end of the previous year's impulse, the overall supply decreased slightly from the previous month. In terms of the 5-series, due to the increase in orders from domestic top battery factories, the output increased; however, in the high-nickel material part, the overseas market has increased their demand for 8-series products, while the domestic market's demand decreased significantly. As a result, the overall production declined slightly. After entering February, due to shorter working days, some small and medium-sized manufacturers faced more difficult to purchase lithium salts, and the price is hard to reduce, thereby reducing the overall rate to resume to work. Many enterprises delayed their delivery of orders or work resumption. Therefore, NCM cathode material saw a marked decline in supply. In February 2022, the output of NCM cathode material is expected to be 42,539 mt, a decrease of 8% month-on-month and an increase of 52% year-on-year.


For queries, please contact Michael Jiang at michaeljiang@smm.cn

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