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SMM Exclusive: China Metals Output In January And Forecast For February

iconFeb 8, 2024 15:42
SMM data showed that in January, China's copper cathode output was 969,800 mt, a month-on-month decrease of 29,600 mt or 2.96%, but a year-on-year increase of 13.65% or 116,500 mt; the output is 16,200 mt higher than the expected 953,600 mt.

Copper cathode

SMM data showed that in January, China's copper cathode output was 969,800 mt, a month-on-month decrease of 29,600 mt or 2.96%, but a year-on-year increase of 13.65% or 116,500 mt; the output is 16,200 mt higher than the expected 953,600 mt.

There are several reasons for the month-on-month decrease in output in January: 1. The statistical cycle factor resulted in a decrease in output. There were fewer days in January (the statistical period of some enterprises is January 1-25, which is about 5 days less than in normal months); 2. A smelter in south-west China began to relocate, causing its output to drop significantly; 3. Two smelters have undertaken maintenance operations; 4. Some smelters experienced a slight drop in output due to tight supply of blister copper. The reasons for the higher-than-expected output include: 1. Two newly-commissioned smelters have begun to release output, and the new output is not low; 2. Some smelters have requirements for a good start for the new year, and their output in January exceeded the original plans; 3. The operating rates of some smelters will drop during the Chinese New Year holidays, and the operating rate was increased in January to make up for the output reduction in February. We believe that the average operating rate of copper cathode industry fell 3.95 percentage points month on month to 85.18% in January.

In February, two smelters have maintenance plans, and many smelters have lowered their operating rates due to the Chinese New Year holidays. These factors will lead to a decline in production in February. As of February 2, the SMM imported copper concentrate index (weekly) reported $22.08/mt, a decrease of $5.86/mt from $27.94/mt in the previous week. Smelters purchased spot copper concentrate for production and currently run at a loss of 894 yuan/mt. SMM understood that some smelters advanced maintenance time in the face of ultra-low spot TCs for copper concentrates. There are also some smelters that are planning to reduce the grade and amount of copper concentrate feed while ensuring normal production. However, due to the time lag (it takes some time from input to output), the output of these smelters that reduced the amount of raw material feed will not be affected in February, and the output reduction is expected to occur in March.

Based on the production schedules of various companies, SMM estimates that domestic copper cathode production in February will be 959,400 mt, a month-on-month decrease of 10,400 mt or 1.07%, and a year-on-year increase of 51,600 mt or 5.68%. The accumulated output from January to February is expected to stand at 1.93 million mt, a year-on-year increase of 9.55% or 168,100 mt.


According to SMM statistics, China's aluminium output was 3.562 million mt in January (31 days), up 4.2% YoY. The domestic daily average aluminium output were flat MoM at 114,900 mt. In January, the operating rate of domestic aluminium primary processing enterprises declined slightly. The output of aluminium billets and other products in the northwest, southwest and other regions decreased. The share of aluminium liquid output fell by 3.7 percentage points MoM and 11.2 percentage points YoY to about 70.36%. According to SMM aluminium liquid ratio data, the domestic aluminium ingot volume in January decreased by 24% YoY to 1.06 million mt. The main domestic aluminium ingot production areas were Xinjiang, Inner Mongolia, and Yunnan, totalling around 590,000 mt, accounting for 55.7% of total.

Changes in production capacity: In January, domestic aluminium smelters maintained steady operations, without large-scale production suspensions or resumptions. The existing aluminium capacity was about 45.19 million mt, the operating capacity was around 41.98 million mt, and the operating rate grew by 3.9 percentage points YoY to 92.9%.

Output forecast: In February 2024, domestic aluminium companies will mostly maintain steady operations. The supply of wind power, photovoltaic and thermal power in Yunnan rose YoY during the dry season, but local aluminium companies have not yet received notice to resume production. SMM predicts that most enterprises in the province will maintain stable operations from February to March. There are no further changes expected on the production capacity. SMM predicts domestic aluminium operating capacity may stabilize at around 42 million mt in February. The average daily domestic aluminium production may remain stable. The total domestic aluminium production in February (29 days) is expected to be around 3.33 million mt, up 7.9% YoY. As CNY is drawing near, the operating rate of downstream enterprises dropped, and the amount of aluminium ingot produced increased. The proportion of aluminium liquid in February may drop to around 66%, up 5 percentage points YoY.

SMM data showed that China’s metallurgical-grade alumina output stood at 6.72 million mt in January (31 days), and the daily average output was 216,800 mt/day, down 9,800 mt/day MoM. The total output was down 1.10% MoM but up 5.5% YoY. The existing alumina capacity in China was 100 million mt, the operating capacity was 79.14 million mt, and the average operating rate stood at 79.1%.

In Shanxi, the operating rate in January was 66.7%, down 2.5% MoM. The operating rate declined as tight ore supply forced output cut. In Henan, the operating rate was 56.7%, down 5.2%. Some alumina refineries in Sanmenxia further suspended or cut production, and a few resumed production in early February as the local heavy pollution weather warning was lifted. In Guizhou, the output of a few refineries was affected by equipment maintenance, others were willing to ramp up driven by profit margins and downstream demand, and the operating capacity increased by 100,000 mt, thus the local operating rate increased by 1.5% to 86.0%; the alumina production in Hebei was generally stable, and the operating rate rose by 0.8% to 88.3%; in Guangxi, the operating rate inched down by 0.8% to 84.1%, an output of about 25,000 mt was curtailed due to insufficient ore supply and equipment maintenance; in Shandong, the operating rate was up 1.6% to 95.2%, some local refineries resumed normal production in early February after local heavy pollution weather warnings lifted. The operating rate of other alumina refineries in Shandong was stable.

Forecast for February: According to SMM research, mines that are currently suspended in Shanxi and Henan have no plans to resume production in February. The shortage of local ore supply will continue to limit production capacity, affecting overall operating rates; in Guangxi, enterprises that are curbed by ore supply issues may find it difficult to return to full production shortly; a refinery in Guizhou suspended production in early February due to CNY holiday, and initially planned to resume production in late February. In Shandong and Henan, some roasting production capacities restricted by environmental protection policies have now resumed. However, as heavy pollution weather occurred frequently in north China, refineries may face a new round of production controls. SMM estimates that the alumina daily average output will be 217,400 mt/day in February 2024, and the total operating capacity will be 79.34 million mt, up 0.25% YoY.

Primary lead

In January 2024, the domestic refined lead production was 294,900 mt, down 4.41% month-on-month and up 3.36% year-on-year. Production capacities of enterprises involved in the survey totalled 6.0063 million mt in 2024.

According to SMM survey, a large number of refined lead smelters, most of which were medium and large-scale enterprises, undertook maintenance in January, lowering output. Lead smelting enterprises in Henan, Yunnan, Jiangxi, Guangdong and other regions all undertook maintenance. Many enterprises conducted maintenance from early to mid-January, thus the supply of lead ingots was particularly tight in early January. Even if some smelters in Henan, Yunnan and Hunan resumed production after maintenance, the output growth failed to make up for the output decline.

In February, with the arrival of the statutory holidays from February 10-17 for Chinese New Year holidays, a small number of refined lead smelters plan to close for maintenance. Refined lead output will continue to decline in February. Most other smelters plan to continue production as usual during the Chinese New Year holidays, so the overall output is expected to see a small month-on-month decrease. SMM predicts that refined lead output will drop slightly to 290,000 mt in February.

Secondary lead

The output of secondary lead in January 2024 was 319,100 mt, a decrease of 6.7% from December and an increase of 2.41% year-on-year. The output of secondary refined lead in January 2024 was 271,700 mt, a month-on-month decrease of 8.49% and a year-on-year increase of 1.23%.

In December, air pollution alerts were issued in many regions, and secondary lead smelters reduced and suspended production in compliance with environmental protection controls, resulting in a sharp decline in output. According to SMM survey, in early January 2024, secondary lead smelters in some areas were still affected by environmental issues, and individual secondary lead smelters in Anhui significantly reduced their output. In addition, raw material stockpiling in mid-January by downstream battery manufacturers and secondary lead smelters caused the demand for battery scrap to rise sharply. The price of electric vehicle battery scrap once again exceeded 10,000 yuan. In late January, downstream battery companies were finishing their stocking and are gradually closed for holiday. The lack of consumption dragged down lead prices; secondary lead companies were facing high costs and low finished product prices, and their profit margins narrowed compared with the first half of the year. Some companies said that the loss expanded, affecting production enthusiasm. Therefore, secondary lead smelters once again experienced large-scale shutdowns or maintenance in late January; however, there was a reduction of more than 90,000 mt in December, so the output decline in January was limited.

In February, fewer calendar days and the Chinese New Year holidays will lower the output of secondary lead again. Most companies said that they will decide the specific date for resumption of production based on market conditions. According to SMM survey, companies that suspended production during the Chinese New Year holidays will heat their furnaces at the end of February, and most of them will officially produce production in early March. SMM predicts that the output of secondary refined lead in February may fall by more than 30,000 mt to 241,200 mt.

Refined zinc

SMM data showed that China's refined zinc output in January 2024 was 567,000 mt, a month-on-month decrease of 23,900 mt or 4.05%, and a year-on-year increase of 10.9%, which is lower than our previous expectations. In January, domestic zinc alloy output was 109,600 mt, an increase of 6,600 mt from the previous month.

In January, the output of domestic smelters declined, mainly due to maintenance of smelters in Guangxi, Yunnan, Sichuan, Anhui, Jiangxi and other places, and due to the shutdown of smelters in Yunnan and Guizhou for holidays; at the same time, new production capacity in Guangxi continued to be released. In Inner Mongolia, Gansu and Yunnan, output increased at the beginning of the year and production resumed from maintenance.

SMM predicts that domestic refined zinc production in February 2024 will drop by 57,300 mt month-on-month to 509,600 mt, a year-on-year increase of 1.63%; the decline in production in February is mainly due to the Chinese New Year holiday, with many secondary zinc smelters in Hunan and other places shut down for holidays. The maintenance of production lines of smelting plants in Sichuan brought about output reductions. In addition, the production days in February decrease by 2 days, and the overall output will drop significantly.

Refined tin

According to SMM research, domestic refined tin output was 15,390 mt in January, down 1.88% MoM but up 28.36% YoY. Domestic tin ingot production remained generally stable in January. In Yunnan, some smelters lowered operating rate due to environmental protection inspections, while the rest kept production stable, with no plan of maintenance. In Jiangxi, with stable production of most smelters, tin ingot output was basically the same as last month. In Inner Mongolia, a smelter was in stable production as planned in January, which will linger in a short run. In Guangdong, shrugging off fallout of environmental inspection in December, tin ingot output of a smelter increased. In Anhui and other regions, most smelters maintained stable production in January. In February, in Yunnan, there will be normal production of most smelters and shutdown of a few during the Chinese New Year holiday. In Jiangxi, as most smelters will stop working for 15-day holidays, refined tin output will decline to a certain extent in February. In Hubei, scrap supply shortages will keep a smelter shut from late October 2023 to after the holidays. In other regions, most smelters will take holidays. Domestic tin ingot production may be 12,290 mt in February 2024, down 20.14% MoM and 3.92% YoY.

Refined nickel:

China's refined nickel production in January 2024 was 25,300 mt, up 3.27% MoM and 54.27% YoY, exceeding forecasts due to increased sales from stronger downstream stockpiling. In Central China, some smelters raised output due to more orders and stable nickel prices. January's production growth was driven by firm prices and strong pre-Spring Festival downstream stockpiling, keeping the spot market active.

China's expected February 2024 refined nickel production is 23,600 mt, slightly down from January. SMM research indicates that as the Spring Festival nears, some companies are beginning to halt production. Additionally, some companies have scheduled maintenance in February. Furthermore, international events during the Spring Festival may affect LME nickel prices. If macro headwinds weigh down nickel prices, refined nickel factories may suffer losses and China's refined nickel exports could also be affected. In summary, February 2024's forecasted refined nickel production is set to decrease by 6.7% MoM.

China's NPI:

China's January 2024 NPI production was 28,400 mt in nickel content and 647,000 mt in physical content, down 6.57% MoM and 4.18% YoY. Despite nickel ore prices normalizing, most Chinese NPI smelters were still operating at a loss. Weak pre-Chinese New Year demand and low NPI prices led to reduced January 2024 NPI production in China. China's February 2024 NPI production is expected at 26,100 mt in nickel content, down 8.13% MoM. With the Spring Festival approaching, shutdowns have started, and maintenance is set for February, signaling a dip in NPI output.

Indonesian NPI:

Indonesia's January 2024 NPI production was 121,900 mt in nickel content, down 5.3% MoM but up 19.9% YoY. Indonesia's high-grade NPI output drop matched SMM forecasts. December saw higher operating rate due to schedules, which normalized in January. Moreover, delays in RKAB approvals in Indonesia's mining sector have caused NPI smelter pessimism, prompting proactive reductions in January's operating rates and continuing the production downtrend. Additionally, the Spring Festival is likely to slow growth in new energy and stainless steel sectors in February, making major price surges for high-grade nickel matte and NPI unlikely, thus reducing the incentive to convert NPI to high-grade nickel matte. In summary, February's high-grade NPI production is forecasted to stay stable around 120,900 mt in nickel content, down 0.86% MoM.

Nickel sulphate

China's January 2024 nickel sulphate production was 35,200 mt in metal content and 160,000 mt in physical content, up 13.91% MoM and 12.87% YoY. January's nickel sulphate supply boost was driven by increased demand from precursor producers, spurred by higher overseas precursor orders and advanced production for February's Spring Festival, causing a temporary spike in demand.

February's Chinese nickel sulphate production is expected to fall to 29,000 mt in metal content and 131,600 mt in physical content due to the Spring Festival break, stockpiling end, and factory shutdowns, down 17.76% MoM and 7.24% YoY.

Battery-grade manganese sulphate

Chinese high purity manganese sulphate output was 16,400 mt in January 2024, down 24.07% MoM. Some high-purity manganese sulphate plants were closed for maintenance in January, while manganese sulphate demand was better than expected, boosted by more orders from some precursor companies and pre-holiday stockpiling. Therefore, high-purity manganese sulphate plants had to maintain full production to meet demand. At the same time, integrated manganese salt precursor enterprises increased high-purity manganese sulphate production, but this had little impact on overall output.

In February, SMM understands that most ternary cathode precursor companies advanced their February production to January due to long Chinese New Year holidays, but demand did not pick up notably, thus production in February may decline. High-purity manganese sulphate companies lacked confidence in demand in February, and some will suspend production for maintenance during the Chinese New Year holidays, while a few with low inventory will have to keep production normal. In summary, high-purity manganese sulphate output is expected to be approximately 12,500 mt in physical content, down 24.09% MoM.


SMM data showed that Chinese EMD output was 15,300 mt (including 700 mt for LMO battery, 9,900 mt for alkaline manganese battery, and 4,700 mt for zinc-carbon battery) in January, down 7.98% MoM, but up 7.91% YoY. The output of all the three types of EMD decreased. There was stable primary battery demand and rising LMO demand, but operating rates of EMD plants didn’t hike, given a slack season for February. EMD plants focused on destocking.

In February, many EMD plants will maintain normal production with no plan of shutdown and maintenance. In addition, given that production suspension will lead to large losses, overall scheduled production will only drop slightly. Under this circumstance, EMD output in February is projected to be some 14,800 mt.


SMM data showed that in January, Chinese Mn3O4 output was 10,100 mt (including 4,800 mt of electronics-grade Mn3O4 and 5,300 mt of battery-grade one), up 21.08% MoM, but down 15.9% YoY. Battery-grade Mn3O4 output increased significantly, while electronics-grade Mn3O4 basically remained stable. Improved orders and upcoming CNY holidays drove LMO plants to stock up battery-grade Mn3O4, while electronics-grade Mn3O4 segment remained in seasonal lull.

As most LMO companies have advanced February’s production to January, their scheduled production will decline in February, which may dent battery-grade Mn3O4 demand, while scheduled Mn3O4 production will also shrink to a certain extent due to production halts during the holidays. Total Mn3O4 output is projected to be about 6,300 mt in February.

High-carbon ferrochrome

SMM data showed that high-carbon ferrochrome output in China was 635,600 mt in January, up 1.39% MoM and 28.66% YoY. Among them, the output in Inner Mongolia was 461,600 mt, up 4.1% MoM, while that in Guizhou was 29,500 mt, down 18.06% MoM. Bid prices from stainless steel mills were flat in January. Under current long-term contract prices, domestic ferrochrome manufacturers kept suffering losses. In southern China, depleted raw material stocks and meager profits of retail sales drove more ferrochrome manufacturers to cut or halt production. In Inner Mongolia, most of ferrochrome plants had long-term contract orders, and there was start-up of new capacity. Therefore, local ferrochrome output increased further.

High-carbon ferrochrome output may drop to 592,200 mt in February. Bid prices from stainless steel mills were flat in February. Limited drop in operating rates of stainless steel mills will keep ferrochrome demand high. Stainless steel mills stocked up before the holidays. Transportation will be disrupted during the holidays. Plagued by severe losses, ferrochrome plants will aim to meet long-term contract orders, and their retail transactions will be limited. Some ferrochrome plants in south China will shut down during the CNY holidays, while there will probably be start-up of new capacity in north China. It is expected that the decline in ferrochrome output will be limited in February.

Stainless steel

According to SMM survey, Chinese stainless steel output totalled 2.893 million mt in January, down 4.05% MoM but up 24.34% YoY. Among them, 200-series stainless steel output was 687,000 mt, down 16.78% MoM but up3% YoY. 300-series stainless steel output was 1.581 million mt, down 1.31% YoY but up 25.41% YoY. 400-series stainless steel output was 625,000 mt, up 6.38% MoM and 56.64% YoY. In addition, Indonesia's stainless steel production totalled 380,000 mt in January, down 7.32% MoM but up 35.71% YoY.

In January, stainless steel futures prices opened lower after New Year's Day but then fluctuated upwards. The SS contract hiked to 14,400 yuan/mt. Trading activity was brisk. In spite of seasonal maintenance, 300-series stainless steel mills kept production. Production of some stainless steel mills inched lower, owing to maintenance. 200-series stainless steel mills in North China, which mainly use stainless steel scrap as raw materials, shut down for maintenance due to regulatory inspection, involving 40,000 mt of output. In addition, there was intensive maintenance of some 200-series stainless steel mills in Guangxi. Therefore, 200-series output dropped by about 138,200 mt, down 16.78% MoM. 400-series stainless steel output in January climbed by 37,500 mt MoM after a slight decline in December 2023 caused by a state-owned stainless steel mill who lowered output after achieving annual target.

In February, some stainless steel mills will carry out regular maintenance during the Chinese New Year holidays. Therefore, stainless steel output will shrink in February, but the dip may be limited, owing to good orders and small profits. Outside China, given that stainless steel market will be in a slack season in Q1, Indonesian stainless steel mills will probably lower production by about 2.63% in February. Domestic stainless steel production may be about 2.684 million mt in February, down 7.22% MoM. Among them, 200, 300 and 400 series stainless steel outputs will be 721,000 mt (up 4.95% MoM), 1.377 million mt (down 12.9% MoM) and 586,000 mt (down 6.24% MoM) respectively.


China produced 97,500 mt of EMM in January, down 4.02% MoM and 7.81% YoY, according to SMM statistics. The main reason for falling production in January was that shutdown of some EMM plants from the end of December 2023 to the beginning of January 2024 due to production schedules or costs. However, normal production of major large EMM plants kept overall output high. Demand: Domestic stainless steel production shrank in January, especially 200-series. Despite this, EMM demand was modest due to centralized procurement by steel mills from January to February.

In February, the operating rate of EMM plants will still be 70%. Some EMM plants that stopped production in January planned to resume production in early March. EMM supply will keep dropping to 82,900 mt in February, according to survey on scheduled production of EMM plants.

Silicon metal

According to SMM statistics, China's silicon metal production in January 2024 was 346,100 mt, down 3,500 mt or 1% MoM, but up 72,000 mt or 26.4% YoY. The operating rates of silicon metal plants in north and south China continued to diverge. High costs and low prices led to further silicon metal production cuts by 5,000-7,000 mt in January in Sichuan and Yunnan. In contrast, silicon metal supply in Xinjiang, Ningxia and other places increased. The top two silicon metal plants in Xinjiang partially resumed production. Yili Yidong Industrial Park remained shut, while some silicon metal plants in Yili increased production to a small extent. In addition, the operating rate of silicon metal plants in Inner Mongolia was basically stable. A small amount of new capacity came on-stream in Ningxia and Gansu.

In February, most domestic silicon metal plants in production will maintain normal production during the Chinese New Year holidays. Silicon metal plants in southern China will keep operating rate low, while a few in north China planned to resume production and ramp up new capacity after the holidays.


China’s polysilicon production was up 2.5% MoM at about 158,900 mt in January, but it was lower than estimates of 160,000 mt, owing to delayed start-up of Xinyi and slower-than-expected capacity ramp-up of leading polysilicon makers. Even so, polysilicon supply remained in surplus as downstream consumption was merely 130,000-140,000 mt in January. However, a lack of high-quality polysilicon and pre-holiday stockpiling made polysilicon prices relatively strong last month.

PV module

According to SMM statistics, domestic PV module output in January was down 21.6% MoM at 35.5GW. With completion of some installation projects in November-December 2023, PV module demand plummeted. In addition, weak market sentiment and poor profits shifted PV module producers towards large production reduction, which may linger in February. Domestic PV module output may drop to less 30GW in February.

Solar cell

The actual solar cell output in China in January was down 16.5% MoM at 51.87GW, including 21.23GW of P-type cells (down 33.39% MoM) and 30.63GW of N-type cells (up 1.34% MoM). Steep supply slip and robust export demand led to a rapid drop in P-type solar cell inventory in mid-to-early January. In mid-to-late January, tight shipments made for a rally in P-type cell prices. N-type cell supply accounted for 59.07% in January, lower than initial estimate. This was mainly because oversupply and inventory backlog drove producers to take early CNY holidays. Solar cell output will keep dipping in February due to the CNY holidays.

PV glass

According to SMM statistics, the monthly PV glass output in China was down 0.13% MoM at 2.3476 million mt in January. With shutdown of four furnaces for maintenance in January against ramp-up of capacity in Q4 2023, overall PV glass output decreased, but the drop was limited.


According to SMM statistics, China’s DMC output in January was down 0.88% MoM at 191,700 mt amid regular maintenance of three DMC plants. The operating rate of DMC plants in January was 80.14%, down 0.71 percentage points MoM. However, bullish domestic market sentiment led DMC prices to cease falling and started shooting up. A slew of orders shored up production enthusiasm, slightly pushing up the operating rate. DMC output may largely remain stable in February at 190,000 mt, according to SMM estimates.

SiMn alloy

China produced 874,500 mt of SiMn alloy in January, up 3.68% MoM but down 6.48% YoY, according to SMM statistics. The operating rates in northern China was high, such as Inner Mongolia, owing to restart of capacity from previous shutdown triggered by power cuts or maintenance. In Ningxia, with waning impact of production restrictions due to polluted weather, production lines resumed production. Weighed down by falling prices, SiMn output in southern China kept shrinking, but the dip was lower than a rise in north China.

In February, SiMn plants in areas with cost advantages such as Inner Mongolia will keep operating, while there will be little likelihood of a large rise in the operating rates in other regions, with sustained SiMn price erosions against rising costs amid firm manganese ore price. Therefore, overall SiMn output may dip to about 794,500 mt in February.

Magnesium ingot

SMM data showed that China's magnesium ingot production in January was 67,327 mt, up 11% MoM and 5% YoY. In January 2024, there was restart of magnesium plants from shutdown triggered by semi-coke's rectification, increasing magnesium output. Meanwhile, there was also production cutbacks of plants as further profit erosion amid falling magnesium ingot prices to nearly break-even level led to production cuts/halts of some magnesium plants. During the holiday, some magnesium plants may lower operating rates, owing to rapid magnesium ingot inventory hike, falling prices and absent overseas demand. Current magnesium prices dropped to 20,000 yuan/mt, and if the dip continues, plants may cut production to stabilise prices. SMM predicted that magnesium ingot production will decrease to 65,000 mt in February.

Magnesium alloy

According to SMM data, China's magnesium alloy production in January was 26,000 mt, down 3.7% YoY but up 7% MoM.

Affected by low magnesium ingot prices, major magnesium alloy makers have stable orders, and most of them operated as usual according to production plans, with no significant changes in output. Much of the blame for falling production this month was tepid demand amid domestic economic downturn. Judging from order receiving of domestic magnesium alloy companies, most downstream companies on vacation and rising sea freight caused by Red Sea incident will prevent orders in February from mounting sharply. It will still take a long time for magnesium alloy demand to recover. SMM predicted that magnesium alloy production will decrease to 24,000 mt in February.

Magnesium powder

SMM data showed that China's magnesium powder production in January was 5,435 mt, down 6.1% MoM.

Magnesium powder output edged lower in January. Rising sea freight caused by Houthi’s attack on merchant ships in Red Sea made a small dent in orders, leading some magnesium powder plants to cut production. At the same time, according to SMM, there were also companies that increased magnesium powder production this month. In a word, overall magnesium ingot output dropped in January. The person in charge of a large magnesium powder company said that due to profits of steel mills amid sluggish domestic economy made downstream buyers more cautious. a large proportion of magnesium powder exports of total exports and the spike in sea freight will probably blunt overseas orders. In addition, downstream sectors will take holidays. SMM predicted that domestic magnesium powder output will decrease to 5,000 mt in February.

Pr-Nd alloy

Domestic Pr-Nd alloy output in January was 5,626 mt, up 0.9% MoM, boosted by pre-holiday stockpiling. The operating rate of Pr-Nd alloy plants rose to 76% in Inner Mongolia, slightly pushing up output, while that in other regions basically remained stable.

At present, the Pr-Nd alloy market is basically stagnant due to upcoming holidays. Mainstream rare earth product prices remain unchanged. There were only a few transactions. Pr-Nd alloy output may inch down in February amid the holiday fallout. SMM will continue to pay attention to start-up of new capacity in northern China.

Pr-Nd oxide

Domestic Pr-Nd oxide output was 6,056 mt in January, up 2.25% MoM. The increase was mainly contributed by Jiangxi.

According to SMM research, with the upcoming holidays, Pr-Nd product prices stabilised. Production of various separation plants was relatively stable amid stable rare earth prices. Pr-Nd oxide plants who use NdFeB scrap as raw materials still suffered losses and thus kept low operating rate. A separation plant in Jiangxi that was shut down for maintenance in December 2023 resumed normal production this year, increasing local production by 12% MoM. As some separation plants will be closed during the CNY holidays, Pr-Nd oxide output may edge down in February.

Dysprosium oxide

China’s dysprosium oxide production in January was 219 mt, up 8.2% MoM. The hike was mainly reflected in Jiangxi. According to SMM, there was restart of some separation plants in Jiangxi in January from maintenance in December 2023, making for a rise by 42% in local dysprosium oxide production. Meanwhile, ion-absorption rare earth ore supply was sufficient due to easing of blockade of Myanmar border. However, sustained price slip made holders less willing to lower prices, rapidly tightening low-priced goods.

Terbium oxide

China’s terbium oxide output in January was 43.6 mt, up 14.6% MoM. The increase was mainly reflected in Jiangxi, where production increased by some 76%.

According to SMM research, rare earth market gradually ground to a halt ahead of upcoming CNY holidays. Terbium oxide trading sentiment was dismal. Terbium oxide prices stabilised. Ion-absorption rare earth ore supply recovered in Myanmar. Under this situation, separation plants were in stable production. The separation plants that had been shut for maintenance at the end of 2023 resumed normal production in January.

Molybdenum concentrate

SMM data showed that China's molybdenum concentrate output was 15,600 mt in January, down 11.8% MoM. The output slip boiled down to the following two aspects. First, with the forthcoming holidays, maintenance and production cuts of some small and medium-sized private mines in East China largely dragged down their output, but it had minimal impact on overall output in China as the mines accounted for a small share. Secondly, there was weather-generated brief shutdown of large molybdenum mines in North China that accounted for a significant amount of shares, and there was no sign of production resumption in a short term.

In February, most molybdenum mines in southern China will resume production after the holidays, while most molybdenum mines will be in normal production in central and northern China. It is expected that in molybdenum concentrate output will inch down in February.


According to SMM data, China’s ferromolybdenum output was down 2.6% MoM at 16,500 mt in January. The monthly bidding volume of steel mills for ferromolybdenum exceeded 12,000 mt in January and 16,000 mt in December. Scheduled production of most ferromolybdenum plants was relatively saturated and stable, while some lower production due to environmental protection-related production limits and tight raw material supply. Therefore, ferromolybdenum output inched lower.

In February, most domestic ferromolybdenum plants had plans of maintenance and production cuts for the holidays for 10-20 days. Therefore, ferromolybdenum production will be significantly reduced in February.


According SMM statistics, China’s 1# silver output was 1,306.123 mt (including 979.123 mt of mineral silver), down 217.882 mt or 14.3% MoM but up 3.5% YoY. The reasons for the decrease in output were the end of production rush in January, the upcoming holidays, a month-on-month drop in average prices and tight raw material supply. However, the average prices hiked compared with last year. Domestic raw material market was relatively optimistic about demand in 2024. There was a plan of a rise in output and capacity in 2024, and the output increased year-on-year. Sales departments of some smelters will take statutory holidays, and production departments will take turns to take holidays, in a bid to keep production during the holiday. Some smelters who took holidays in advance had lowering production.

At the end of January, Federal Reserve Chairman Powell commented that interest rates would be cut three times this year, with interest rates expected to be cut by 75 basis points as early as May. Due to better economic data in January, the timing and intensity of the Fed's interest rate cuts were both weaker and later than market forecasts. Therefore, silver prices softened.

The unemployment rate in the US in January was 3.7%, which was the same as the previous value and lower than the expected value of 3.8%. The non-farm payroll employment in the US in January was 353,000, higher than the previous value of 333,000 and the expected value of 18 million. The final value of the University of Michigan Consumer Confidence Index in the US in January was announced to be 79, higher than the previous value of 78.8 and the expected value of 78.9.

Silver nitrate

With the holiday fallout against support from demand and prices, silver nitrate output increased in January. Domestic silver nitrate manufacturers with sales qualifications produced 911 mt of silver nitrate in January, up 3.5% MoM and 70.3% YoY. In January, there was mixed silver nitrate output in various regions. Demand from N-type silver powder production and stockpiling amid low silver prices were responsible for silver nitrate output. Producers in some areas had earlier holidays and shorter production schedules, lowering output.

The switch from P-type to N-type solar cells will boost silver paste demand by about 1.4 times, and the boost to silver powder demand will be even bigger. Therefore, there was a substantial increase in silver powder on a YoY basis. In February, silver nitrate production will drop in February amid the holiday fallout.

Antimony ingot

According to SMM survey, China antimony ingot (including antimony ingot, converted crude antimony, cathode antimony, etc.) output in January was 7,619.25 mt, up 2.52% MoM. Most producers suspended production, while some saw output increase or decrease. Antimony ingot output in January only inched higher this month. At present, raw material resources were still relatively concentrated in some factories. Therefore, in spite of rising output, many producers still had difficulty of significantly increasing output due to high raw material prices and tight raw material supply.

Many market participants said that antimony prices shot up in January 2024, reaching new highs in recent years. Therefore, there will be a high possibility of antimony ingot price uptick. However, market participants were increasingly concerned about demand. On the one hand, whether antimony demand can continue to maintain current level or from after the holidays to March. Antimony prices may weaken seasonally in March. On the other hand, participants worried about whether current terminal market can continue to accept the price of antimony products continuing to break through new highs.

Sodium antimonate

According to SMM's survey statistics, China's sodium antimonate output in January was still at high of 4,620 mt, up 3.36% MoM. The output hiked for two consecutive months. Some manufacturers said that there was pre-holiday stockpiling. With short production period against many producers maintaining production during the holiday, sodium antimonate output is not expected to drop significantly in February. Overall, sodium antimonate manufacturers were still optimistic that demand from PV industry will be robust in 2024, boosted by rising output of PV makers.

Refined bismuth

According to SMM's survey, China's refined bismuth production in January was 2,054.193 mt, up 7.72% MoM. Among the 24 survey respondents, 6 manufacturers stopped production in January, unchanged from last month. There was a mild rise in production of some makers and a large hike in production of four makers. Tamed by bismuth supply tightness and the Lunar New Year holidays, SMM predicted that refined bismuth output may return below the 2,000 mt in February.

Customs data shows that China's bismuth trioxide export volume in December 2023 was about 373 mt, higher than 368 mt in November 2023.

Titanium dioxide

According to SMM data, China's titanium dioxide output was 33,000 mt in January, down 1.4% MoM but up 8.8% YoY. Titanium dioxide prices remained low in a slack season. Some titanium dioxide companies started carrying out scheduled maintenance to slow down piling-up of inventory. In January, about a dozen companies stopped production for maintenance. In January, overseas customers replenished their inventory at low prices. Titanium dioxide companies had many orders on hand. Spot supply tightened. Most titanium dioxide manufacturers mainly consumed inventory, having less inventory pressure. With scheduled maintenance of titanium dioxide companies in Guangxi, SMM expected titanium dioxide production in February to be 320,000 mt in February.


SMM data showed that Chinese APT output was down 0.3% MoM at 10,500 mt in January. In January, suppressed by tight tungsten ore supply and high prices, APT smelter still suffered losses. Downstream powder companies refilled stocks at the end of 2023, but the demand was weaker than previous years and expected, blunting smelters’ production enthusiasm to a certain extent. Therefore, some smelters suspended production for maintenance in January, denting APT output.

In February, most APT smelters will take holidays for 8-20 days, while only a few will keep production. APT output may nosedive in February.

Lithium carbonate

January's domestic lithium carbonate production was about 42,000 mt, down 5.6% MoM, up 15.6% YoY. By raw material, some spodumene-based lithium salt firms saw production drops due to sluggish market, as well as slower mining and transport in winter. However, the decline was offset by lithium salt firms with more processing orders and new producers ramping up. Yet, many small to medium-sized lepidolite-based businesses operated at a loss, cutting output, as did most loss-making recyclers.

February's lithium carbonate production is likely to dip due to the Spring Festival and a peak maintenance period affecting many lithium salt firms, compounded by a market downturn. This has led many small and medium-sized companies to cut or stop production since mid-January. A notable drop in domestic output is expected, with February production projected at 32,000 mt, down 22.9% MoM and up 3.9% YoY.

Most lithium salt firms who carry out maintenance will not re-open until around the Lantern Festival. However, small to medium-sized companies reliant on externally sourced lithium ore will resume based on market conditions, suggesting a potential domestic lithium carbonate production dip at February's end. Chile's December lithium carbonate exports to China dropped 36% to 8,676 mt, likely reducing China's January imports. This could shrink domestic supply, with most warehouse receipts held by traders, potentially creating arbitrage opportunities. Looking into March, lithium salt production is expected to pick up, and more lithium carbonate warehouse receipts will be canceled, collectively driving up market supply.

Lithium hydroxide

China's January lithium hydroxide output was 22,450 mt, up 10% MoM, 6% YoY. Supply side, the lithium hydroxide industry has seen a trend of significant inventory reduction due to continuous decline in production. Consequently, inventories at some smelters have been adjusted back to relatively normal levels. Facing downstream stockpiling demand and insufficient supplies, some smelters ramped up production for timely delivery. Prior to planned maintenance in February, some smelters geared up production in January. These factors have driven the production of lithium hydroxide to rebound after six consecutive months of decline.

Demand side, the transition from lower to higher nickel content in battery cell technology by certain car models has significantly increased orders for some cathode manufacturers. Lithium hydroxide prices stabilized in January with supply-demand improvements. Additionally, cathode makers have preponed production ahead of Spring Festival cutbacks, and increased overseas demand also boosted lithium hydroxide demand, surpassing market expectations. SMM predicts China's February 2024 lithium hydroxide output at 18,022 mt, down 20% MoM and 26% YoY.

Cobalt sulphate:

China's January cobalt sulphate production was 5,584 mt in metal content, up 6% MoM but down 12% YoY. Reasons for production increase include: Firstly, earlier inventory reductions led to lower current stock at smelting plants. Secondly, downstream demand was pre-loaded. Thirdly, some smelters moved February orders to January, anticipating the Spring Festival. February's domestic Spring Festival is expected to lead to maintenance breaks, with cobalt sulphate production estimated at 3,894 mt in metal content, down 31% MoM and 47% YoY.

Tricobalt tetraoxide (Co3O4)

January saw China's Co3O4 production at 7,455 mt, up 18% MoM and 110% YoY. Cobalt prices had previously bottomed, improving buying sentiment, and pre-holiday stocking boosted Co3O4 orders, prompting higher scheduled production.

For February, it is projected that production will decline due to two main factors: Firstly, February is inherently a shorter month. Secondly, some enterprises are inclined to undergo maintenance during the Spring Festival. Thus, February's overall Co3O4 production is set to drop, estimated at 6,476 mt, down 13% MoM but up 70% YoY.

Ternary precursor

January saw China's ternary precursor output at roughly 76,765 mt, up 12% MoM and 32% YoY. Demand side: Overseas, demand rose as South Korean cathode makers moved precursor material pickups to January, fearing February logistics issues. Secondly, overseas cathode plants stocked up for new projects, but some were still using December stocks, dampening demand. Domestically, January's high-nickel cathode demand rose due to early stockpiling for new car models and a gradual recovery in previously scaled-down projects. Supply side: with nickel and cobalt prices low and the February Spring Festival ahead, ternary precursor firms increased January inventories. Key companies, facing February maintenance shutdowns, boosted January production.

Entering February 2024, precursor demand will drop due to the Chinese New Year holiday logistics slowdown. Supply side, overseas holidays being shorter, ternary precursor firms with such orders will maintain production. Yet, domestic leading companies' partial shutdowns will lower market supply. China's February ternary precursor output is projected at 60,745 mt, down 21% MoM but up 4% YoY.

Ternary cathode material

In January 2024, China's ternary cathode material output hit 55,352 tons, up 4% MoM and 36% YoY. On the supply side, in digital and power battery sectors, smaller producers cut back or stopped production, while leading factories maintained output, anticipating February demand and reacting to steady January lithium prices, which spurred stockpiling. In the EV market, January saw higher ternary battery production, driven by companies scaling for cost cuts, pre-producing February's orders, and ramping up for new projects, boosting cathode material output. Looking at the demand side, domestically and abroad, a December buying surge led to weaker January procurement. Shipping issues temporarily spurred stockpiling but didn't boost final deliveries. In the domestic market, leading battery cell factories report stable ternary material demand, with a small rise in demand for medium to high-nickel cathode and a fall for low-nickel cathode. Some second-tier battery factories stocked up medium to low-nickel cathode for February.

Entering February 2024's low season, ternary cathode material production is expected at 47,787 mt, down 14% MoM but up 4% YoY. From the supply side, most cathode makers have cut production due to holiday lulls, though a few see growth from more medium-nickel user projects. On the demand side, battery cell makers arranged production schedules based on holidays and orders, and some have finished stockpiling. Jan-Feb 2024 production is projected at 103,140 mt, up 19% YoY, outperforming earlier gloomy predictions.

Iron phosphate

In January, China produced 75,800 mt of iron phosphate, down 5% MoM but up 22% YoY. Firms prepared for the Spring Festival, advancing February orders and boosting some January production unexpectedly. Demand did not improve notably, meaning production growth could not sustain into February. LFP firms pushed for price cuts, while producers resisted, keeping prices steady. Low production enthusiasm persisted, with companies running at lower operating rates in January, prioritizing inventory reduction. In terms of costs, raw material prices were stable in January, but cost pressure was high. Iron phosphate producers sought flexible deals with limited success. Some with orders will manage to maintain operations in the slow February period, while most stopped for the Spring Festival, planning to restart late February. China's expected iron phosphate output for February 2024 is 53,500 mt, down 29% MoM and 23% YoY.


China's January LFP production hit 98,810 mt, up 4% MoM and 53% YoY. The new year brought high demand expectations for January 2024, with a small rise in LFP orders pre-scheduled for February aiding production recovery. Main raw material prices stayed stable, keeping LFP production costs steady. Supply side, LFP firms got more February orders, prompting early scheduled production for potential logistics issues, slightly raising January's market supply. Demand-side, EV sector saw a small recovery, energy storage remained stable, and advanced February orders increased LFP order delivery.

Q1 2024 is the industry's low season, mixing pessimism with recovery hopes; LFP demand won't likely surge. The Spring Festival in February means less production and company breaks. Expected China's LFP production for February 2024 is roughly 73,200 mt, down 26% MoM but up 2% YoY.


In January, China's LCO output was 7,400 mt, up 17% MoM and 135% YoY. Cost side, Co3O4 and lithium carbonate prices have dipped to historic lows, with a minor recovery, keeping LCO production costs relatively low. Supply side, cobalt and lithium's low prices, plus cathode makers' 1-2 week Spring Festival break in February, prompted LCO producers to increase January inventories, leading top manufacturers to produce more than they sold. On the demand side, January saw no severe price wars for market share as the industry concluded annual settlements, with downstream firms focusing on long-term contracts.

February is the LCO market's low season, with most factories scheduling holidays and few maintaining production. Expected February output is 5,450 mt, down 26% MoM but up 24% YoY.


China’s LMO output was 7,320 mt in January, up 43% MoM and 181% YoY. From the demand side, as spot prices of lithium carbonate stabilised, battery cell factories’ orders picked up, driving battery cell factories to increase production. Meanwhile, with the forthcoming CNY holidays, battery cell factories stocked up. Therefore, the operating rate of most LMO companies increased in January.

Raw materials stockpiled by battery cell factories before the holidays have partially factored in orders to be delivered in March. This was holiday-driven rather than demand recovery. Both battery cell factories and LMO plants will be shut down for the CNY holidays. LMO output may be some 4,155 mt in February, down 43% MoM but up 8% YoY.


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

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