SMM Exclusive: China's Metals Output In October And Forecast For November

SHANGHAI, Nov 10 (SMM) –
Copper cathode
China's copper cathode output in October was 993,800 mt, a decrease of 18,200 mt or 1.8% month-on-month, but a growth of 10.3% year-on-year. The output was 2,200 mt lower than the expected 996,000 mt. The total output from January to October was 9.48 million mt, an increase of 967,400 mt or 11.36% year-on-year.
Although only three smelters were undergoing maintenance in October, many smelters were subject to tight blister copper (this was also reflected in RCs of blister copper which consistently stood at a low level during the year. According to the latest statistics from SMM, as of early November, the RCs of blister copper in south China averaged 850 yuan/mt). This caused an unexpected drop in output. In addition, new production capacity did not produce large volumes of output. There will not be significant output growth until December. The average operating rate of the copper cathode industry fell 1.88 percentage points month on month to 92.34% in October.
According to SMM statistics, only two smelters have maintenance plans in November. However, the tight supply of blister copper is still plaguing some smelters. Meanwhile, the newly-commissioned smelters have not yet yielded output, which will limit the total output growth in November. We believe that production in November will only increase slightly from October to over 1 million mt. Domestic copper cathode output is estimated at 1 million mt in November, up 7,400 mt or 0.74% MoM and 11.3% YoY, according to the current production schedules. The accumulated output from January to November is expected to stand at 10.48 million mt, an increase of 11.36% or 1.07 million mt year on year.
Aluminum
SMM data shows China's October 2023 aluminum production hit 3.641 million mt, up 6.7% YoY. Daily output averaged 117,500 mt. Cumulative production for the year till October was 34.458 million mt, up 3.5% YoY. However, in October, there was a decrease in production among primary aluminum processing producers such as aluminum billet, and the proportion of aluminum ingot production increased, reducing the industry's average molten aluminum share by 2.9 % to 70.33%. Aluminum ingot production rose 5% YoY in October, but decreased 10.5% YoY from January to October, totaling 10.21 million mt.
SMM reports China's October 2023 aluminum production capacity remained steady, with minor increases in Sichuan and routine maintenance of 10,000 mt in Qinghai. The new capacity of Inner Mongolia Baiyinhua, operational in late October, did not contribute to the production in October. Currently, China's aluminum installed capacity is around 45.19 million mt, including yet-to-operate and yet-to-phase-out capacities. Operating capacity is about 42.99 million mt. The national aluminum operating rate was approximately 95.1%, up 0.1% MoM.
In early November, Yunnan's aluminum smelters were asked to cut production due to limited power, with capacity cuts estimated at around 1.15 million mt. While some smelters started to reduce output, others are seeking more power, potentially lessening production cuts. SMM continues to monitor the situation. No major cuts are expected elsewhere in November. Considering the progress of new production capacity in Inner Mongolia and the production reduction in Yunnan, SMM forecasts total aluminum processing in the country to near 41.98 million mt by November-end. November's aluminum production is expected at about 3.45 million mt, up 3.4% YoY.

Alumina
SMM reports China's October metallurgical-grade alumina production at 6.842 million mt, averaging 220,700 mt/day, down 3700 mt/day MoM. This decrease owes to tight ore supply in Guangxi, October roasting maintenance, and emission reduction policies in Shandong. Furthermore, an alumina refinery in Henan reduced production due to ore scarcity. Thus, October's daily production fell from September, with total production down 1.6% MoM. October's alumina production rose 2.5% YoY. By October’s end, China's alumina installed capacity was 100 million mt, operating capacity 80.68 million mt, and operating rates 80.7%. Cumulative alumina production from January to October reached 66.264 million mt, up 2.0% YoY.
In October, Shanxi's operating rate was 75.0%, up 2.2% MoM, due to a 550,000-mt-capacity alumina refinery resuming normal production post-maintenance. In contrast, Henan's operating rate dropped 7% to 65.7%, largely because of an alumina refinery in Sanmenxia reducing production due to ore scarcity, affecting around 700,000 mt of annual capacity. SMM research indicates no imminent resumption of production at Sanmenxia mines. In Guizhou, ore supply and cost issues kept some alumina refineries at low production levels, keeping the October operating rate stable at 81.6%.
In October, Hebei's operating rate rose slightly to 88.3%, up 0.8% MoM, with northern environmental policies having minimal impact on local production. In contrast, Guangxi's operating rate fell from 89.0% to 86.9%, due to an early October shutdown of an alumina refinery over tight ore supply, affecting around 500,000 mt of annual capacity, though it resumed normal production later. October roasting maintenance also reduced production by 15,000 mt. Shandong's operating rate dropped from 90.9% to 88.8%, as a large alumina refinery had to limit roasting production due to local environmental policies, affecting monthly production by about 100,000 mt. It has since resumed normal production.
November forecasts suggest some previously halted capacity in Guangxi will resume, albeit slowly. Yunnan's alumina production is expected to drop further, and with scheduled maintenance, overall operating rates may fluctuate slightly. Mines in Henan's Sanmenxia area anticipate no immediate resumption, with ongoing ore shortage continuing to constrain production, keeping operating rates low. Shanxi alumina refineries plan no production changes, with ore and cost limitations hindering further production increase. Companies in Shandong and Hebei, which halted production in October due to environmental restrictions, have resumed normal operations. Yet, potential production restrictions loom due to frequent heavy pollution in northern regions towards year-end. Therefore, SMM forecasts November daily alumina production around 223,000 mt/day, and total operating capacity about 81.5 million mt, up 6.4% YoY.

Primary lead
In October 2023, the domestic output of refined lead was 321,800 mt, a gain of 1.89% month-on-month and 8.83% year-on-year. The cumulative output from January to October 2023 increased by 15.6% year-on-year. Total production capacities of enterprises in the survey totalled 5.84 million mt in 2023.
According to SMM survey, in October, the output of medium and large refined lead smelters in Henan, Hunan, Yunnan and other areas climbed, resulting in an output increase of over 10,000 mt. However, during this period, lead smelters in Jiangxi, Yunnan and other regions entered maintenance, and lead smelters in Henan suspended production due to replacement of old equipment.
In November, although the routine maintenance of refined lead smelters in Jiangxi and other regions has ended, some medium and large enterprises in Henan, Yunnan and Hunan started maintenance, resulting in a sharp decline in output. This may drag down the refined lead production in November. Therefore, SMM predicts that the domestic refined lead output will fall by over 10,000 mt month-on-month to 305,000 mt in November. In addition to routine maintenance of lead smelters, Yunnan has implemented power rationing on large industrial power consumers due to the current dry season, including aluminium, zinc and lead smelters. Starting from August, Myanmar's Wa State began to ban mining of tin ores. Border trade of lead and zinc ore has also been affected. Due to the recent conflict in Kokang, Myanmar, China closed some gateways in Yunnan, which will reduce lead concentrate border trade further. The tighter supply of lead concentrate is likely to affect lead ingot output, and the output decline may expand.
Secondary lead
The output of secondary lead in October 2023 was 476,100 mt, an increase of 3.91% from September and up 33.32% year on year; the cumulative output of secondary lead from January to October 2023 was 3.84 million mt, an increase of 10.43% year on year. In October 2023, the output of secondary refined lead was 418,900 mt, an increase of 4.23% from September, and a growth of 31.52% year on year; from January to October 2023, the cumulative output of secondary refined lead was 3.35 million mt, an increase of 9.99% year on year.
Production continued to increase in October, with the growth mainly seen in Jiangxi, Anhui and Guizhou. A large smelter in Jiangxi resumed production in mid-September. Its production was stable in October and daily output gradually returned to normal. A large smelter in Anhui has gradually increased its output since commissioning in August, and was basically at full capacity in October. A large smelter in Guizhou has expanded its production capacity in the second half of the year. Despite occasional equipment breakdown and debugging, the output grew significantly. According to SMM survey, many smelters cut production in October, mainly due to tight raw materials and equipment failure-driven maintenance, affecting output by a total of 14,000 mt. The output of secondary refined lead increased by 17,000 mt in October, which was 2,000 mt less than the SMM forecast.
Entering November, the shortage of raw materials has intensified, and the price of battery scrap has continued to rise. The pressure of raw material tightness and higher cost prompted some smelters to reduce production. The resumption of production of a large smelter in Anhui has been delayed. The temperature in the north (such as Inner Mongolia and Xinjiang) has dropped sharply, which has affected the battery scrap recycling. Meanwhile, the impact of occasional snowstorms increased the cost of energy consumption and transportation. There will be a reduction in production. SMM expects China's secondary refined lead output to fall to around 412,000 mt in November.

Refined zinc
SMM statistics showed that China's refined zinc output was 604,600 mt in October, a growth of 60,600 mt or 11.14% month-on-month and up 17.6% year-on-year, exceeding expectations. The output totalled around 5.45 million mt from January to October, up 10.65% year-on-year. Domestic zinc alloy production in October was 98,180 mt, an increase of 9,900 mt from the previous month.
In October, the output of domestic smelters increased significantly to over 600,000 mt. Except for the maintenance of smelters in Hunan and Gansu, other companies basically resumed normal production. There were fewer market disturbance factors, and smelters were highly motivated to produce. Strong alloy sales also drove some output growth. In addition, thanks to zinc oxide ore from Huoshaoyun mine, raw material supply at some secondary zinc smelters in Sichuan increased, growing output. The disruption from peak-hour power consumption measures in Hunan was reduced, and the production of secondary zinc smelters recovered.
SMM predicts that domestic refined zinc production in November 2023 will decrease by 6,000 mt from the previous month to 598,600 mt, a year-on-year increase of 14.09%; the cumulative output from January to November will reach 6.051 million mt, a year-on-year increase of 10.98%; the production will drop slightly in November, mainly due to the half-month maintenance at some smelters in Yunnan and the power rationing of 10% in Yunnan issued at the beginning of the month. The overall output reduction is expected to be around 1,100 mt. Smelters in Gansu resumed from maintenance and increased output. Overall, the output reduction is not obvious yet and is basically in line with expectations.

Refined tin
SMM survey shows domestic refined tin production in October was 15,523 mt, up 0.6% MoM but down 7.3% YoY. January-October cumulative production was 153,573 mt, up 2.37% YoY. Tin ingot production in China was stable in October. A previously underperforming Yunnan smelter resumed normal production in early October, slightly boosting tin ingot output. Another in Yunnan also increased production slightly, while most others held steady. In Jiangxi, production fell due to changes in three smelters' October production plans. A smelter in Inner Mongolia resumed full production in October. In Guangdong, a smelter's operation recovery led to a slight output increase, while most other smelters maintained steady production.
In November, a Yunnan smelter expects slight production decrease due to tin ore supply tensions. A Jiangxi smelter, which slightly reduced October production, has returned to normal production. An Anhui smelter resumed production post-maintenance by October’s end, expecting November production to return to pre-maintenance levels. However, a Hubei smelter, due to scrap procurement shortage, ceased production late October, planning to remain halted until after Spring Festival. Most other smelters will maintain normal production. National tin ingot production in November is estimated at 15,880 mt, up 2.3% MoM but down 1.98% YoY.
Refined nickel
In October 2023, national refined nickel production hit 24,000 mt, rising 8.9% MoM and a substantial 55.7% YoY, aligning with our expectations. This increase was primarily due to a surge in electrowinning nickel projects, especially in East and South China, where some smelters ramped up refined nickel output to full capacity. Despite October's continuous nickel price decline, most nickel plate producers showed no intent to cut output, mainly because nickel plates can be registered as deliverable goods.
November 2023's national refined nickel production is expected to remain steady at 24,000 mt, matching October's output. This is primarily because most newly-added capacity this year reached full production in October, with the rest set to come online in 2024, suggesting potential production increases may concentrate in 2024. Overall, the domestic electrowinning nickel release in H2 2023 aligns with expectations.

NPI
In October 2023, China's NPI production was 33,700 mt in nickel content and 787,000 mt in physical content, down 0.36% MoM and 2.23% YoY respectively. Poor demand during the traditional peak season led to reports of 300-series stainless steel production cuts, which weakened high-grade NPI demand. NPI prices fell due to decreased demand from stainless steel mills and liquidity needs of NPI traders, despite stable ore prices. This led to losses for high-grade NPI producers, some entering maintenance mode and reducing NPI production.
November 2023's estimated NPI production is around 33,600 mt in nickel content, down 0.31% MoM. High NPI stock and low Q4 demand recovery are reported by SMM. Traders' need for fund retrieval is expected to continue, further reducing high-grade NPI prices.
Indonesia NPI
Indonesia's October 2023 NPI production was 115,800 mt in nickel content, down 4.04% MoM but up 9.51% YoY. 2023's total production through October was 1.1195 million mt in nickel content, up 18.7% YoY. The decline in high-grade NPI production aligns with SMM predictions. Weak demand and falling prices have pushed some producers into losses, delaying production line restarts. With weak NPI demand, profit margins for high-grade nickel matte production are improving, leading some to switch production. November's high-grade NPI production is projected to fall further to 112,900 mt in nickel content, down 2.5% MoM.
Nickel sulphate
October 2023 saw national nickel sulphate production of 39,000 mt in metal content, a physical output of 175,000 mt, up 4.45% MoM, down 5.46% YoY. Despite tight raw material supply and high prices, improved profitability due to firm nickel sulphate prices reversed the prior profit downturn.
In November, due to a decline in the scheduled production of precursor, the demand for nickel sulphate is expected to remain weak. Combined with relatively firm costs, the production of nickel sulphate is anticipated to decrease fall 4% MoM.

Battery-grade manganese sulphate
In October 2023, China's high-purity manganese sulphate production was about 26,300 mt, up 19.55% MoM. This rise is due to a boost in some enterprises' output and a growth in export orders. Most enterprises increased their operating rates in October.
As per SMM, November's ternary cathode precursor scheduled production is expected to drop, reducing high-purity manganese sulphate procurement. After prior production rush, output in November and December is likely to fall back. Consequently, November's high-purity manganese sulphate production is projected at 23,200 mt in physical content, down 11.79% MoM.

EMD
SMM data indicates China's October 2023 EMD production was 15,400 mt (1,300 mt for LMO type, 10,100 mt for alkali manganese type, 3,900 mt for zinc-carbon type), down 3.22% MoM but up 7.50% YoY. January-October 2023 production totaled 162,000 mt, down 33.89% YoY. The EMD production drop resulted from some leading firms pausing for maintenance, reducing the monthly operating rate. However, LMO type EMD production slightly increased due to increased downstream usage.
In November, leading EMD firms are to resume normal production. With current EMD market inventory relatively low, a slight operating rate increase is possible. Considering these factors, November EMD production is projected to be about 21,700 mt.

Mn3O4
SMM data shows China's October 2023 Mn3O4 production was 10,800 mt (4,700 mt electronic grade, 6,100 mt battery grade), up 10.16% MoM but down 26.26% YoY. January-October 2023 production totaled 106,900 mt, down 16.55% YoY. Battery-grade Mn3O4 production increased significantly due to a brief price recovery for lithium carbonate, boosting LMO orders and Mn3O4 procurement. However, due to a sluggish real estate market, electronic-grade Mn3O4 demand remained flat, keeping production normal.
Market feedback suggests the LMO market could slump in November, potentially reducing LMO scheduled production and, in turn, battery-grade Mn3O4 production. Electronic-grade Mn3O4 production should remain stable. Summing up these factors, November's total Mn3O4 production is projected to be around 9,400 mt.

High-carbon ferrochrome
SMM data indicates that in October 2023, China's high-carbon ferrochrome production rose to 684,500 mt, up 5.1% MoM and 53.23% YoY. Specifically, Inner Mongolia produced 440,000 mt, up 8.64% MoM, and Shanxi produced 47,000 mt, up 10.07% MoM. Despite stagnant high-carbon chrome bid prices by steel mills in October, high bid prices enabled ferrochrome producers to maintain profits using previous inventory, keeping production enthusiasm high. Despite weaker-than-expected stainless steel consumption and rumors of production cuts, most ferrochrome manufacturers remained bearish, actively shipping to lower high-priced inventory. Alongside ramp-up of new production capacity in Inner Mongolia, this drove increase in national ferrochrome production.

November's high-carbon ferrochrome production is projected at 615,600 mt, lower than October's. Weak demand and falling stainless steel prices lead to steel mills cutting production and a decrease in ferrochrome demand. With the November ferrochrome bid price dropping by 300 yuan/mt, and retail prices following, current prices have fallen below most southern manufacturers' cost line. With low raw material inventory and high spot material purchasing costs, southern ferrochrome factories are likely to halt or reduce production. Although northern producers are struggling with losses, production is expected to remain stable for several reasons: 1. winter shutdowns can freeze equipment, making production resumption hard; 2. Large-scale submerged-arc furnace also demand continuous production; 3. northern manufacturers competing for market share.
Stainless steel
SMM's survey shows that in October 2023, China's total stainless steel production was approximately 3.139 million mt, down 2.58% MoM but up 3.94% YoY. Specifically, Series 200 production was about 982,500 mt, up 3.20% MoM but down 4.52% YoY; Series 300 was around 1.4715 million mt, down 10.49% MoM and 6.00% YoY; Series 400 was about 685,000 mt, up 9.42% MoM and a significant 61.02%YoY.
In Indonesia, October's total stainless steel production was approximately 360,000 mt, up 2.86% MoM but down 7.69% YoY.
In October, the stainless steel prices declined due to unmet consumption demand in September and high inventory. High raw material costs squeezed steel mill profits, pushing some mills to reduce October production. The Series 200, with smaller cost fluctuations and less profit reduction, was more price-acceptable to consumers, causing some Series 300 production lines to switch to Series 200, increasing Series 200 production by about 30,000 mt in October. Series 400 production also increased by about 59,000 mt as some steel mills resumed production lines.
In November, while stainless steel inventories remained high, a de-stocking trend emerged. Some domestic steel mills announced production cuts, while Tsingshan in Indonesia switched some high-grade nickel matte lines to NPI, boosting the country's stainless steel production by roughly 27.78% MoM.
China’s stainless steel production is projected to be around 2.994 million mt, down 4.62% MoM. By series, Series 200 production could be approximately 918,500 mt, down 6.51% MoM; Series 300 might be around 1.4165 million mt, down 3.74% MoM; and Series 400 could be around 659,000 mt, down 3.8% MoM.

EMM
SMM data shows that in October 2023, China's EMM production was 97,200 mt, up 20.07% MoM and 104.51% YoY. Total EMM production from January to October 2023 was approximately 873,900 mt, up 44.99% YoY. October's production increase was mainly due to suppliers setting EMM prices based on market conditions and scheduling 70% monthly production capacity. Any shortfall wasn't replenished, and if full-month production occurred, nine days' output would go to the public warehouse at 9,000 yuan/mt. Overall crude stainless steel production decreased in October, primarily due to falling Series 300 stainless steel prices. The slim profit margin led some mills to halt or switch production, reducing overall output. However, the production shift increased Series 200 output, providing stable EMM demand support.
In November, a meeting decision ensured EMM factories maintain operating rates at 70%. Large factories in Guangxi and Hunan are resuming production, yet some are halting production due to operational pressures. Based on EMM factories' scheduled production, the estimated November output is about 98,600 mt.

Silicon metal
China produced 392,500 mt of silicon metal in October, up 36,200 mt or 10.2% MoM and 20.8% YoY, bringing total output in the first ten months of 2023 up to 3.0477 million mt, up 5.46% YoY, according to SMM statistics.
In October, silicon metal output in Yunnan was stable, while that in most other production areas increased ranging from nearly 1,000 mt to 10,000 mt, most notably in Xinjiang whose output hiked by 22,000 mt MoM.
Silicon supply appeared ample in north China and weak in south China in November. There was high operating rate and ramp-up of small amount of new capacity in the north and northwest regions. The operating rate in the south-western region dropped. Power cuts in turns in Yunnan is expected to lower silicon output by about 10,000 mt. On the other hand, a 0.07-0.12 yuan/kWh rise in electricity prices in Sichuan and Yunnan and elevated charcoal prices pushed up costs by 1,200-1,500 yuan/mt. In addition, silicon prices softened. Under this circumstance, some silicon producers cut productions. When Sichuan enters the dry season on November 25, electricity prices will rise again. Therefore, silicon metal output is expected to inch down in November, and will further shrink in December amid falling operating rate.
Polysilicon
The actual domestic polysilicon output in October was up 5.9% MoM at 143,000 mt, but it was lower than expected, mainly due to some Inner Mongolia-based manufacturers’ quality issues and accidents at some new plants. The polysilicon output in November is expected to reach 153,000 mt on Hoshine Silicon and Qiya yielding output.
PV module
According to SMM statistics, PV module production in China in October was up 5.27% MoM at 50.2GW, but it was still far lower than expected, largely pinned on high global module inventory that is currently estimated to be about 130GW. Under this circumstance, PV module production will probably shrink to 49GW in November.
Solar cell
The actual solar cell output in China in October was 60.58GW, including 38.04GW of PERC cells and 19.65Gw of Topcon cells. PECR cells accounted for 64.42%, down nearly 2.25 percentage points MoM, while Topcon cells accounted for 32.48%, higher than the previous month. The number of Topcon cell producers reached 31 in October, and may exceed 35 in November. PV cell production kept hitting a new high in October. Muted demand and high inventory added bearishness into PV industry chain in October, especially into solar cell sector whose supply extremely outweighed demand amid rising new capacity. Scheduled Topcon cell output may shrink after November.
PV glass
According to SMM statistics, the monthly PV glass output in China was up 10.31% MoM at 2.2702 million mt in October. A big part of the hike in output was because of more new production lines in Q3 than H1 2023. The lines will operate at full capacity after three months. Currently, PV glass capacity in China is 98,300 mt/day, and supply hiked.
DMC
According to SMM statistics, DMC production in October in China was some 186,600 mt, up 0.19% MoM, but the growth was lower than expected. With maintenance of some DMC plants, operating rate of DMC plants in October was lower than planned. Meanwhile, a large DMC plant lowered operating rate to 40%. Under this circumstance, DMC supply shrank significantly. Downstream buyers with weak buying appetites aimed to purchase DMC on a need-to basis in October, which dragging down operating rate of DMC plants.
SiMn alloy
SMM data showed that SiMn alloy production in China in October totalled 1.0279 million mt, up 4.09% MoM and 34.06% YoY, bringing total output in the first ten months of 2023 up to about 9.5259 million mt, up 14.48% YoY. The main reason for the increase in output in October was high operating rate in the main production areas in north China and restart of some furnaces from maintenance in Inner Mongolia. In the southern region, with pessimistic expectations about market outlook, some producers planned to stop production after using up existing raw material inventory, while Yunnan-based producers kept operating rate high before electricity bills increase in the future.
In November, some producers suffering losses shut down units for maintenance. Future demand will be limited. Therefore, SiMn alloy production is likely to shrink to 872,400 mt in November.
Magnesium ingot
SMM data showed that China's magnesium ingot production in October was 55,000 mt, up 3.8% MoM but down 30% YoY, bringing total output in the first ten months of 2023 up to about 593,000 mt, down 27% YoY.
In October, production reduction situation of magnesium plants in the main production areas improved. There was restart of some magnesium plants and ongoing shutdown of some large ones. Inventory of magnesium plants in the main production areas dropped to a safe level. Given upcoming demand peaking in Q4, magnesium plants in other areas are expected to increase production. Therefore, the overall magnesium ingot production will probably increase to 56,000 mt in November.
Magnesium alloy
According to SMM data, China's magnesium alloy production in October was 26,000 mt, down 1.5% MoM and 2.6% YoY, bringing total output in the first ten months of 2023 up to about 261,000 mt, up 0.7% YoY.
High magnesium ingot prices in October resulted in low price acceptance by downstream magnesium alloys. Therefore, magnesium alloy demand was sluggish, dragging down magnesium alloy production this month. Domestic magnesium alloy companies will see a pick-up of orders in November. Seeking directions from news about restart of magnesium ingot plants in main production areas, magnesium ingot prices stood low, which is expected to boost magnesium alloy demand. It is expected that magnesium alloy output in November will remain around 27,000 mt.
Magnesium powder
SMM data showed that China's magnesium powder production in October was 4,600 mt, down 8.4% MoM, bringing total output up to 53,000 mt. In October, there were ongoing production cuts at some magnesium plants amid safety supervisions in north China, thereby leading to low operating rate of magnesium powder plants.
The person in charge of a large magnesium powder enterprise said that poor profits of steel mills amid domestic economic downturn, as well as falling magnesium ingot prices, made downstream magnesium powder buyers prudent. There was a slight decline in daily average pig iron output, and slower production cuts of steel mills were reported. Therefore, short-term magnesium powder demand will remain stable. In addition, magnesium ingot prices may offer a small boost to magnesium powder market. It is expected that the China’s magnesium powder output in November will inch up to about 5,000 mt.
Pr-Nd oxide
China's praseodymium-neodymium (Pr-Nd) oxide output in October was 6,322 mt, up 0.09% MoM. The increase was mainly contributed by Guangxi, while the output in other regions changed little.
According to SMM research, Pr-Nd oxide prices changed little, and the output of separation plants in various places appeared stable. Given weak prices of Pr-Nd products and poor orders of metal plants, the actual transaction volume of Pr-Nd oxide failed to improve. SMM expected that Pr-Nd oxide output will remain stable.
Pr-Nd alloy
China’s Pr-Nd alloy output in October was 5,418 mt, up 0.33% MoM. The increase was mainly contributed by Fujian and Sichuan, while the output in other regions changed little.
According to SMM, most alloy plants aimed to meet year-end replenishing demand from China Northern Rare Earth (Group) High-Tech, leading to shrinking spot Pr-Nd alloy supply. At present, magnetic materials companies find Pr-Nd alloy prices unacceptable due to falling new orders. Therefore, SMM predicted that the Pr-Nd alloy output may inch down.
Dysprosium oxide
China’s dysprosium oxide production in October was 218 mt, down 0.5% MoM. The dip was mainly reflected in Guangxi.
According to SMM, current dysprosium oxide prices kept dropping. In addition, dysprosium-iron alloy plants who were in losses cut productions, hurting dysprosium oxide demand. To tackle this tough situation, separation plants cut their dysprosium oxide production.
Terbium oxide
China’s terbium oxide output in October was 44 mt, down 2.4% MoM. The dip was mainly reflected in Guangxi.
According to SMM research, further blockade of Myanmar border made for ore supply reduction, while demand remained muted. Under this circumstance, terbium oxide prices remained soft. SMM believed that metal plants are unlikely to see a significant increase in new orders towards the end of the year. In addition, the end date of Myanmar’s border closure was not yet fixed. It is expected that terbium oxide production may keep shrinking slowly.
Molybdenum concentrate
SMM data showed that China's molybdenum concentrate output was 17,700 mt in October, down 0.6% MoM. Terminal sectors had steadily rigid demand for molybdenum concentrate. In addition, good profits of spot molybdenum concentrate served as a key diver for molybdenum ore mines’ enthusiasm for mining. Therefore, molybdenum concentrate producers still operated at full capacity.
End-users’ molybdenum concentrate demand may weaken, while molybdenum concentrate output may dip as northern-based molybdenum mines may be affected by wind and snow. SMM will continue to pay attention to the impact of weather on molybdenum mining.
Ferromolybdenum
According to SMM data, China’s ferromolybdenum output was down 5.4% MoM at 15,300 mt in October. The dip in output boiled down to the following two aspects.
Demand: Major steel mills released 8,000 mt of ferromolybdenum tenders in October, which was significantly lower than Q2 and Q3, largely pinned on limited molybdenum-containing steel demand from terminal sectors and steel mills’ high spot inventory. Therefore, ferromolybdenum demand slumped, leading to falling operating rate of ferromolybdenum smelters. Price: Molybdenum prices fluctuated frequently in October and moved downwards. Therefore, affected by the sentiment of buying on hikes not on dips, steel mills didn’t immediately make a procurement, even if they have demand. Therefore, demand had little impact on ferromolybdenum prices in October.
With weak terminal demand, steel mills may plan to further cut molybdenum-containing steel production, but the production reduction is expected to be limited given lingering profits compared with other types of steel. Ferromolybdenum output is expected to remain stable in November.
Silver
According SMM Statistics, China’s 1# silver output was 1,297.933 mt (including 962.933 mt of mineral silver), down 4.1% MoM and 7.1% YoY. The reasons for the decrease in output were changes on silver content of mineral silver and internal business of some enterprises and maintenance of some plants. In addition, silver producers planned to produce less goods in H2 after beating production targets in H1 2023, which also explained for the decrease. Moreover, silver output also dipped due to the National Day holiday and Mid-Autumn Festival, while some companies, at the same time, increased their production on changes on mineral silver output and operation resumption.
Macroeconomic aspect: The Fed paused hiking interest rate in November, marking the second time that the Fed has done so. The US ADP employment figure in October was 113,000, lower than an estimate of 150,000 and higher than the previous value of 89,000, which exerted positive impact on silver prices. Therefore, SMM expected silver prices will remain high in November. Meanwhile, silver output in November will decrease amid year-end demand sluggishness.
Silver nitrate
As silver futures market was closed during the National Day holiday, silver nitrate producers worked overtime to meet existing orders, or took a holiday at that time. After the holiday, silver prices hiked to over 5,800 yuan/kg after two straight days of losses in October. Therefore, silver nitrate manufacturers with sales qualifications produced 672 mt of silver nitrate in October, down 9.6% MoM but up 11.6% YoY. The output of the surveyed enterprises accounts for about 80% of the market. Therefore, China’s silver nitrate output totalled about 840 mt. Silver nitrate production in various regions remained stable or declined. The reasons for stable production were: 1. Producers operated at full capacity during the holiday. 2. Changes in silver prices have minimal impact on some producers who undertook processing business. The reasons for the decline in output were: 1. Producers took a few days off during the National Day holiday. 2. Post-holiday silver prices dipped, and downstream demand increased. However, there were few spot silver, made it difficult for silver nitrate companies to make back-to-back transaction. Subsequently, silver prices hiked, leading to less demand from buyers who were in wait-and-see mood. Bearish market sentiment was not strong amid suspension of the Fed’s interest rate hike for the second time in November. In addition, the US economic data mixed. Under this circumstance, SMM predicted that silver prices are unlikely to dip. Moreover, there will be rigid demand from downstream sectors. Therefore, silver nitrate production will keep decreasing in November.

Antimony ingot
According to SMM survey, China antimony ingot (including antimony ingot, converted crude antimony, cathode antimony, etc.) output in October was 6994.3 mt, down 6.36% MoM. Some market participants said that due to various reasons such as domestic mines’ reluctance to sell and difficulty for imported antimony ore to enter China smoothly in the future amid geopolitical issues, the shortage of antimony raw material will persist. Recently, Russia's export tariffs on commodities including platinum group metals has triggered various speculations in the precious metals industry. There is currently a heated discussion on whether Russian gold-antimony ore exports to China will be affected in the future. Since the second half of the year, domestic imports of other antimony ores and concentrates have shown a decreasing trend compared with the first half of the year. It remains to be seen whether the imports of other antimony ores and concentrates will increase in the fourth quarter. Especially with the strengthing of gold prices since the second half of the year and the market generally continuing to be optimistic about future gold prices, many market players may pay far more attention to gold than the by-product antimony.
SMM predicted that China’s antimony ingot production in November will continue to fall amid tight ore supply.

Refined bismuth
According to SMM's survey, China's refined bismuth production in October was 2,143.143 mt, down 6.65% MoM. Among the 24 survey respondents, 7 manufacturers stopped production in October, up 2 MoM. In addition, there was slight change on some manufacturers’ output. Therefore, the overall antimony ingot production dipped in October, but to a limited extent. SMM predicted that China’s refined bismuth output may remain stable in November, or keep declining amid tight raw material supply.
Customs data showed that China's export volume of wrought bismuth, bismuth products, unwrought bismuth and scrap was 301.5 mt in September, down 11.1% MoM. Bismuth oxide exports in September was 388.79 mt, little changed from August.
Titanium dioxide
According to SMM data, China's titanium dioxide output was up 13.8% MoM and 8.9% YoY at 339,000 mt in October, bringing total output in the first ten months of 2023 up to 3.169 million mt, down 1.2% YoY.
October saw slower shipment of titanium dioxide. However, as leading producers solved production lines in September, titanium dioxide production in China increased, while a slack demand season arrived. Titanium dioxide producer kept prices firm, while downstream sectors are less willing to accept high-priced titanium dioxide. The orders signed by titanium dioxide producers are about to be delivered. Some producers were pessimistic about the market outlook. Under this circumstance, there was scheduled maintenance of some titanium dioxide producers in Panxi, Sichuan. It is expected that a total titanium dioxide production in November will shrink to about 320,000 mt.
APT
SMM data showed that Chinese APT output was down 0.8% MoM at 11,300 mt in October. With firm tungsten concentrate prices and further weak demand, APT spot smelters were in more losses in October. Given that most of the orders from most smelters were long-term contracts or for captive use, the overall APT output didn’t decrease sharply, in a bid to ensure stable operation of the smelters.
Tungsten prices will further soften in November. Some smelters will have scheduled maintenance, or further reduce spot inventory. It is expected that APT output will inch down in November.

Lithium carbonate
The production of lithium carbonate in China in October was 40,426 mt, down 3% MoM and up 18% of YoY. In terms of lithium extraction from spodumene, the production reduction of individual salt plants in September continued until October, which was combined with a slight decrease in the OEM volume of individual salt plants, resulting in part of reductions. However, there were still offset by the production increase of projects newly put into production and the production increase of enterprise after resumption from maintenance. Overall, the output of lithium carbonate produced from spodumene was slightly reduced. In terms of lithium extraction from lepidolite, due to the cost inversion of some externally sourced lithium extraction from, individual salt plants reduced production in September and continued into October. Even as the OEM level of some salt plants increased slightly and some salt plants gradually increased production after being put into operation, total production fell slightly. In terms of lithium extraction from salt lakes, production showed seasonal decline. In terms of recycling, although the situation of cost inversion still exists, individual enterprises have experienced a slight increase in overall production due to their stable business strategies and sufficient raw materials purchased in the early stage.
The domestic lithium carbonate production is expected to be 43,970 mt in November, up 8.8% MoM and 20% YoY. Mainly because enterprises that had previously reduced production and went into maintenance in September and October gradually returned to normal production, and some new projects continued to increase production, bringing an overall recovery in the production of lithium carbonate produced from spodumene and lepidolite, However, lithium carbonate produced from salt lakes will still maintain decreasing trend due to seasonal factor. The persistence of cost-inversion will slight reduce production at smelters who use scrap as raw materials. .
Lithium hydroxide
In October, China’s lithium hydroxide production reached 21,904 mt, down 9% MoM and 17% YoY. The whole market continued to be in a state of weak supply and demand. On the supply side, due to market factors such as periodic oversupply, the National Day holiday, and a significant decline in OEM orders, many lithium hydroxide smelting enterprises shut down for maintenance during the National holidays, with few of them restarted production after that. Most enterprises only maintained one or two production lines at low levels to delivery long-term orders. Due to economic considerations, causticizing plants experienced a significant decline in production. On the demand side, although the price of lithium carbonate rebounded in the middle of the month, which to a certain extent drove the price of lithium hydroxide to stop falling and recover. Under the weak demand for high nickel, the demand boost was extremely limited, and most downstream links still only maintain at low level of rigid demand procurement. There were only few orders and transactions in markets. SMM predicts that the weak supply and demand pattern of lithium hydroxide may be difficult to change in the short term. Affected by the resumption of some enterprises after maintenance in November, the domestic production is expected to reach 22,320 mt, up 2% MoM and down 11% YoY.

Cobalt sulphate
In October, China's cobalt sulphate production was 6,292 mt in metal content, down 6% MoM and 16% YoY. Due to the difficulty in recycling black mass and the delay in the arrival of cobalt intermediates at ports, some enterprises reduced production. Due to the poor recovery of EV market, the demand for cobalt sulphate was weak, and some enterprises reduced their production under the pressure of inventory.
It is expected that in November, the EV market will still be in a weak positionr. In addition, low-priced raw materials are difficult to purchase, and the rising costs caused by high-priced raw materials are difficult to be transmitted to downstream. Therefore, producers will still prioritize destocking. Cobalt sulphate production is expected to be 6,272 mt in metal content in November, flat MoM and down 15% YoY.
Co3O4
In October, China's production of Co3O4 reached 7986 mt, up 10% MoM and 25% YoY. Driven by growing orders from leading LCO makers, Co304 producers ramped up production. The release of some new production capacity also led to an increase in production.
It is expected that in November, due to the gradual release in production capacity of some large enterprises and decrease in external sourced material, orders at other producers may decline, resulting in a significant decrease in production. The expected production is approximately 7367 mt, down 8% MoM and up 31% YoY.
Ternary cathode precursor
In October, China's production of ternary cathode precursor was approximately 73259 mt, down 2% MoM and 20% YoY. The cumulative production from January to October was 676136 mt, down 1.7% YoY.
Some ternary cathode precursor enterprises experienced a significant decline in export volume due to large inventory of overseas downstream cathode and battery cell factories, resulting in poor market demand. Some enterprises saw a reduction of over 50% in demand for specific model of products. In the domestic market, benefiting from the good sales of specific downstream EV models, there is a certain increase in demand for medium and low nickel in both battery and cathode factories, and some enterprises increased domestic sales. In addition, there was a slight increase in the digital market in October, with some manufacturers' low-price strategies working and production increasing, leading to an increase in market share.
Entering November, there has been some differentiation in overseas cathodes demand, and overall export orders are still declining. However, some manufacturers have stepped up production due to growing export orders for high-nickel precursors. In the domestic market, the overall production schedules are generally stable. Although there is still an increase in market demand, as the end of the year is approaching, and lithium prices are still continuing to decline, cathodes factories have stricter inventory control, and their willingness to hold down precursor prices has further increased. As such, there may be delays in delivery and difficulties in fulfilling demand. In November, China's production of ternary cathode precursor is projected at 72634 mt, down 1% MoM and 19% YoY.
Ternary cathode material
In October 2023, China's ternary cathode material production was 56,062 mt, up 1% MoM and down 20% YoY. From January to October 2023, China's cumulative production of ternary cathode material was 512,066 mt, down 4% YoY.
There are differences in the demand side in domestic and overseas markets. In overseas markets, car sales were lower than expected, and overseas battery manufacturers increased their efforts to clear inventories of cathode material. As a result, some cathodes manufacturers saw a significant decline in their low and high nickel production. In the domestic market, EV sales further increased, and demand from leading battery factories and some second-tier battery factories still increased. Therefore, the production of medium and low nickel ternary materials increased. On the digital side, some battery cell factories experienced an increase in demand in October, and some cathode enterprises were willing to offer high discounts, resulting in an increase in deliveries and production.

Entering November, demand has weakened on the digital side, year-end stocking has not emerged under the background of the continued decline in lithium prices and poor orders. Some small factories have stopped production. Demand from overseas EV market has reached a low level due to continued reductions in the early stage, so production schedules are mainly stable in November. In the domestic market, mainstream battery manufacturers still expect further increases in demand for nickel, and some ternary cathodes enterprises have increased their production schedules based on sales. China's ternary cathode material production in November is projected at 56,907 mt, up 1.5% MoM and down 14% YoY.

Iron phosphate
In October, China's iron phosphate production reached 115,110 mt, down 0.9% MoM and up 20.5% YoY. Production in the first ten months surged 69.5% YoY. Market demand was lower than expected. Downstream LFP enterprises reduced their procurement of raw materials and operating rates, and digested finished product inventory. The decrease in downstream demand led to a decline in iron phosphate production. In terms of cost, production costs slightly decreased in October, mainly due to the decrease in prices of iron source ferrous sulfate and oxidant hydrogen peroxide. Due to low sales prices, iron phosphate enterprises continued to operate at a loss, and their production enthusiasm was at average level and productions are scheduled according to orders. Due to continuous destocking by producers in the entire industry chain, the demand for iron phosphate continued to decrease. It is expected that the production of iron phosphate in November 2023 will be 109,700 mt, down 4.7% MoM and up 17% YoY.
LFP
In October, China's LFP production was 126,990 mt, down 0.4% MoM and up 3% YoY. Production for Jan-Oct soared 39.5% YoY. The cost of LFP fell amid the continued decline in prices of the main raw material lithium carbonate and the slight decline in iron phosphate price. On the supply side, due to the decline in lithium carbonate prices in October, LFP enterprises reduced production and werewilling to ship goods at lower prices to maintain market share. On the demand side, EV market continued to be flat and the energy storage market was lower than expected. Battery cell enterprises, plagued by high inventories, reduced production, suppressing demand for LFP. Due to weak supply and demand in downstream and end-use market in the fourth quarter and strong bearish sentiment, LFP enterprises are cautious in scheduling production. Domestic LFP production is expected to be 114,500 mt in November 2023, down 10% MoM and up 4.3% YoY.
LCO
In October, China's LCO production was 8,030 mt, up 1% MoM and 10% YoY. Top-tier LCO and battery cell factories still maintained good order performance. The main reason is the recovery of digital mobile phone demand in the early fourth quarter and stocking for Singles’ Day shopping festival (Nov 11) in advance. In October, mobile phone manufacturers launched new products and added various preferential policies to stimulate consumers' willingness to purchase. Downstream producers were preparing to produce new mobile phone products for Singles’ Day, the fourth quarter and overseas Christmas promotions. In November, except for the leading manufacturers who said that orders have not yet been affected, most LCO factories expect a decline in production schedules to cope with the reduction in orders after the peak season. The production in November is expected to be 6,917 mt, down 14% MoM, down 4% YoY.
LMO
In October 2023, China's LMO production was 8,495 mt, up 16% MoM and 37% YoY.The spot price of lithium carbonate on the raw material side experienced a brief recovery, which prompted some downstream battery cell factories to start locking orders in advance. Therefore, most LMO enterprises reported a slight increase in order volume in October. In November, the spot price of lithium carbonate maintained a slight downward trend, cooling down downstream battery cell factories’ willingness to purchase LMO. Consumption in the electric two-wheeled bicycle, consumer electronics and power tool markets is sluggish. The demand in traditional peak season of Double Eleven has not been realized, there are only few market orders. Most battery cell factories are reducing production and destocking. Therefore, in November, the orders of LMO enterprises declined MoM. LMO production is expected to reach approximately 7,186 mt in November, down 15% MoM and 20% YoY.