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May Magnetic Material Operating Rates Declined [SMM Analysis]

iconJun 12, 2024 18:03
Source:SMM
According to an SMM survey, domestic NdFeB output declined in May, with output decreasing by 12% MoM. Subsequent orders were insufficient, with a strong bearish sentiment in the market.

According to an SMM survey, domestic NdFeB output declined in May, with output decreasing by 12% MoM. Subsequent orders were insufficient, with a strong bearish sentiment in the market.

A sales leader at a large magnetic material company stated that June and July are traditionally slow seasons for the market. In terms of cost control, large companies have relatively strong bargaining power for raw materials. To maintain factory operations, large companies' product quotations are relatively competitive compared to small and medium-sized plants. Subsequent orders are expected to further tilt towards large companies, and the difference in operating rates among magnetic material companies is expected to expand further in June. Currently, large companies' operating rates are 80-100%, while small and medium-sized plants are bleak, with some operating at less than 40%.

Currently, the situation of insufficient capacity utilisation in the domestic magnetic material industry is quite severe. Additionally, end-user products such as NEVs are facing increasingly strict cost control, resulting in significantly lower profits for magnetic materials compared to previous years.

A general manager at a large magnetic material company stated, "Now everyone is competing on technology and costs. Magnetic material companies will face significant horizontal competition pressure in the next two years."

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