SMM Analysis On China September Metals Production And October Forecast 

SMM, Oct 14: The followings are a detailed breakdown of China metals production in September and forecast for October:

Copper cathode
In September, SMM copper cathode production decreased by 9,200 mt MoM, a decline of 0.91%, and decreased by 0.76% YoY. From January to September, cumulative production increased by 478,200 mt YoY, an increase of 5.64%.
The main reasons for the unexpected decline in September production are as follows: 1. A major smelter in central China required long-term maintenance due to force majeure, significantly reducing its output; 2. Continued tight supply of blister copper and copper anode led to decreased production at some smelters, as reflected in the continued decline in processing fees for blister copper and copper anode (as of September 27, SMM reported south China domestic blister copper RCs at 800 yuan/mt, down 100 yuan/mt from the previous month; domestic copper anode processing fees at 400 yuan/mt, down 100 yuan/mt from the previous month).
In summary, the sample operating rate of the copper cathode industry in September was 82.6%, down 0.42 percentage points MoM. The operating rate for large smelters was 84.74%, down 0.56 percentage points MoM; for medium smelters, it was 80.60%, down 2.83 percentage points MoM; for small smelters, it was 67.78%, up 5.48 percentage points MoM. The operating rate for smelters using copper concentrate was 86.0%, down 0.3 percentage points MoM; for those not using copper concentrate (using copper scrap or copper anode instead), it was 62.70%, down 2.6 percentage points MoM.
Entering October, according to SMM statistics, five smelters are scheduled for maintenance, involving blister copper capacity of 1.04 million mt, a significant increase from 500,000 mt in September. Additionally, due to tight copper concentrate supply, the ramp-up speed of some newly commissioned smelters has slowed. Coupled with the continued tight supply of blister copper and copper anode, production at some smelters relying on them continues to decline. Under the influence of many unfavourable factors, production in October is expected to continue to decrease.
Based on production schedules, SMM expects October domestic copper cathode production to decrease by 1.08 percentage points MoM and by 0.03 percentage points YoY. From January to October, cumulative production increased by 5.04% YoY, an increase of 477,900 mt. The sample operating rate of the copper cathode industry in October is expected to be 81.53%, down 1.06 percentage points MoM. The operating rate for large smelters is expected to be 83.42%, down 1.32 percentage points MoM; for medium smelters, 78.46%, down 2.14 percentage points MoM; for small smelters, 72.22%, up 4.44 percentage points MoM. The operating rate for smelters using copper concentrate is expected to be 85.1%, down 0.9 percentage points MoM; for those not using copper concentrate (using copper scrap or copper anode instead), it is expected to be 62.50%, down 0.2 percentage points MoM, marking a continuous decline for four months, with further decline expected in the future. Finally, the number of smelters planning maintenance in November will increase to eight, and SMM expects production to continue to decline in November, with production expected to increase again in December as maintenance concludes.
Aluminum
According to SMM statistics, as of October 9, 2024, domestic aluminum production in September (30 days) was up 1.45% YoY. The capacity in Sichuan and Guizhou, which had previously halted for technical upgrades, gradually resumed production, leading to a steady increase in domestic aluminum operating capacity.
During the September-October peak season, the production and demand for downstream alloy products rebounded, driving the proportion of liquid aluminum up by 0.7 percentage points MoM and 0.6 percentage points YoY to approximately 73.76%. According to SMM's liquid aluminum proportion data, the casting ingot production in September decreased by 0.67% YoY to around 937,900 mt.
Capacity changes: By the end of September, SMM statistics showed that the existing capacity of domestic aluminum was about 45.36 million mt, with an operating capacity of approximately 4,351 mt, and the industry's operating rate increased by 0.94 percentage points YoY to 95.96%. In the month, the capacity in Sichuan and Guizhou, previously halted for technical upgrades, gradually started production, with output expected to reflect in October and November.
Production forecast: Entering October 2024, domestic aluminum operating capacity is expected to slightly increase, mainly due to the continued resumption of upgraded capacity in Sichuan and Guizhou, and the initiation of replacement projects in Xinjiang. Additionally, this year, Yunnan's power supply is relatively sufficient, reducing the expected production cuts. SMM expects the annualized operating capacity of domestic aluminum to reach 43.63 million mt/year by the end of October. As October marks the end of the peak season, and with the impact of environmental protection policies in north China affecting local production, combined with aluminum prices fluctuating at highs, some end-use sectors are adopting a wait-and-see approach, which may negatively impact the demand for aluminum billets and other alloy products. It is expected that the proportion of liquid aluminum will adjust to around 73% in October. Continued attention is needed on the resumption of aluminum production in various regions and the operating conditions of downstream sectors like aluminum billets.
Alumina
According to SMM data, in September 2024 (30 days), China's metallurgical-grade alumina production decreased by 4.27% MoM, up 2.69% YoY. As of October 10, China's existing metallurgical-grade alumina capacity increased by 1 million mt MoM, with actual operating capacity down 1.30% MoM, and an operating rate of 82.71%. From January to September 2024, domestic metallurgical-grade alumina cumulative production increased by 3.66% YoY.
By region:
Shanxi: The operating rate in September was 76.1%, down 2.01% from August, mainly due to tight ore supply and some capacity still under suspension for technical upgrades.
Henan: The operating rate in September was 61.6%, down 2.35% from August, mainly due to maintenance of some alumina refinery production lines in early September and some companies unable to increase production due to ore supply issues, resulting in a slight decline in the operating rate.
Guizhou: The operating rate in September was 84.0%, up 6.61% from August.
Hebei: The operating rate in September was 91.3%, down 12.06% from August, mainly due to overproduction after maintenance recovery in August and maintenance in early to mid-September, leading to a decline in production.
Guangxi: The operating rate in September was 92.1%, up 2.71% from August, mainly due to a local alumina refinery ramping up to full production mid-month.
Shandong: The operating rate in September was 90.3%, down 5.40% from August, mainly due to maintenance at some local alumina refineries, leading to a decline in production. Additionally, a new 1 million mt production line was completed at a local alumina refinery, with no contribution to September's production as it started in early October.
October forecast: The SMM survey indicates that despite plans for production reduction and technical upgrades in other regions, new capacity at a Shandong alumina refinery will start, and maintenance at a Hebei and a Guangxi alumina refinery will end, returning to normal production. It is expected that the daily average alumina production in China will slightly increase in October. On the raw material side, there is no further news on the resumption of domestic ore production, and supply remains tight. Import ore supply is expected to decrease due to the rainy season in Guinea, indicating a tight supply of bauxite, which continues to limit the increase in alumina operating capacity. SMM expects China's daily average metallurgical-grade alumina production to increase by 1.73% MoM in October 2024. Continued attention is needed on potential alumina demand brought by aluminum resumption in south-west China and the pace of new alumina capacity release.
Overseas Aluminum
According to SMM statistics, in September 2024 (30 days), the total overseas aluminum production slightly decreased by 0.1% YoY. As of September 2024, cumulative overseas aluminum production increased by 1.1% YoY. The average overseas operating rate was 88%, down 0.2% MoM, up 0.7% YoY.
By region:
North America: September total production decreased by 3.9% YoY, with an average operating rate of 83.1%. The New Madrid aluminum smelter in the US announced a shutdown at the beginning of 2024, reducing annual aluminum production by about 147,000 mt; however, Alcoa's Warrick aluminum smelter announced the restart of a 54,000 mt production line early last year, with the current operating rate at about 75%.
South America: September total production increased by 5.0% YoY, with an average operating rate of 67.7%. The increase was due to the restart of the Alumar plant. Alcoa holds a 60% stake, and South 32 holds 40%. It announced a restart in April 2022, with the operating rate recovering to about 70% in September.
Russia: September total production increased by 2.9% YoY, with an average operating rate of 95.3%. The increase came from the restart of the Taishet aluminum smelter. The plant announced a restart in early 2022, but progress was slow. In September, the total production was about 21,000 mt, with the operating rate recovering to about 64%.
Europe (excluding Russia): September total production increased by 2.9% YoY, with an average operating rate of 73.8%. The increase mainly came from the restart of Trimet's three plants in Germany. Trimet announced a restart in April 2024, expected to reach full production by mid-2025. According to SMM estimates, the operating rate of the three plants recovered to about 63% in September.
Africa: September total production increased by 2.7% YoY, with an average operating rate of about 84.9%.
Oceania: September total production decreased by 5.5% YoY, with an average operating rate of about 84.5%, down 0.2% MoM, down 4.7% YoY. The main reason was the Tiwai Point aluminum smelter in New Zealand reducing power consumption by a total of 205 MW in July and August to alleviate the energy crisis of the New Zealand State Grid. Currently, Tiwai Point's annual capacity is about 345,000 mt, and the two power reductions are expected to reduce aluminum production by about 125,000 mt.
Middle East: September total production slightly decreased by 1.5% YoY, with an average operating rate of 102.2%.
India: September total production was about 348,000 mt, up 0.7% YoY. The average operating rate was 100.2%.
Other Asian regions excluding China, India, and the Middle East: September total production decreased by 1.7% MoM, with an average operating rate of 76.3%, down 3.8 MoM. The decrease was due to an explosion at Press Metal's Samalaju plant in September, affecting about 9% of total aluminum capacity, specifically 100 out of 300 electrolytic cells in the plant's third phase. This incident is expected to reduce Press Metal's annual aluminum production in 2024 by about 3%. The repair of the damaged facilities is expected to take about four months, after which production will gradually recover.
October forecast: According to SMM statistics, in October 2024 (31 days), overseas aluminum production is expected to remain flat YoY, with an average overseas operating rate of 88%, down 0.2% MoM, up 0.7% YoY.
Overseas Metallurgical Grade Alumina

In September 2024 (30 days), overseas metallurgical grade alumina production decreased by 2.7% YoY. The average operating rate of overseas alumina refineries was 78.9%, slightly up 0.1% MoM, but down 3.8% YoY. From January to September 2024, cumulative production decreased by 0.1% YoY.

By region:

Australia: Production for the month decreased by 11.5% YoY, with an average operating rate of about 78%. Alcoa's Kwinana alumina refinery was completely shut down by the end of Q2. Due to a natural gas pipeline explosion, Rio Tinto's Gladstone operations, Yarwun and QAL, reduced production to 74% and 77%, respectively. Rio Tinto stated that the cuts are expected to continue until the end of the year, and the annual production guidance was lowered by about 600,000 mt. Additionally, due to delays in environmental protection approvals and conveyor belt maintenance, South32's Worsley alumina refinery was forced to cut production, and the company lowered its FY25 (2024.7.1-2025.6.30) alumina production guidance by 6% to 3.75 million mt.

North America: Production for the month increased by 3.7% YoY. The average operating rate was 70.4%.

South America: Production for the month increased by 3.5% YoY. The average operating rate was 87.9%.

Africa: Production for the month decreased by 1.4% YoY. The average operating rate was 41.5%. RUSAL's bauxite-alumina complex Friguia had a capacity utilisation rate of only 40% due to reduced bauxite production.

India: Production for the month increased by 1.8% YoY. Vedanta's Lanjigarh plant, due to a shortage of bauxite supply, operated at an annual capacity of only about 2 million mt, even though the total capacity was increased to 3.5 million mt, production was lower-than-expected. SMM expects that after Vedanta's new bauxite mine starts production in 2025, alumina production will gradually increase, and the plant plans to raise total capacity to 5 million mt by the end of 2025.

Indonesia: Since the ban on bauxite exports in June 2023, Indonesia's alumina production capacity has rapidly increased. In September, Indonesia's metallurgical grade alumina production rose by 12.8% YoY. The Mempawah SGAR alumina refinery, with a capacity of 1 million mt, successfully commenced operations and is expected to reach full capacity by February 2025.

Russia: Production for the month increased by 0.6% YoY. The average operating rate was about 88.3%.

Europe (excluding Russia): Production for the month increased by 1.1% YoY. The average operating rate was about 50.9%.

Other Asian regions excluding India, Indonesia, and China: Production for the month was 656,000 mt, down 5.9% YoY, with an average operating rate of 87.4%.

October forecast: According to SMM statistics, in October 2024 (31 days), overseas metallurgical grade alumina total production is expected to decrease by 2.7% YoY. The average operating rate is expected to be about 78.6%, slightly down 0.3% MoM, and down 4.3% YoY.

Primary Lead
In September 2024, national primary lead production turned to a decline, down 7.55% MoM and 7.65% YoY. From January to September 2024, cumulative primary lead production decreased by 4.5% YoY. The total capacity of surveyed enterprises in 2024 was 6.0063 million mt.
According to the SMM survey, primary lead smelters underwent concentrated maintenance in September, leading to a significant reduction in supply. For instance, large and medium-sized enterprises in Henan, Hunan, and Inner Mongolia entered maintenance in September, with durations ranging from 10 to 40 days. Most of these were delivery brand enterprises. The previous report predicted a MoM decline of about 10% in September, but the actual survey showed a decline of 7.55%. The lower-than-expected decline was mainly due to some smelters in Henan and Inner Mongolia postponing their scheduled maintenance.
Looking ahead to October, as smelters resume production, primary lead production is expected to fully recover September's decline. Smelters in Henan, Hunan, Inner Mongolia, and Guangxi, mostly large and medium-sized, are resuming production, significantly boosting output. Additionally, new capacity in Qinghai is about to be commissioned. This enterprise had been in a shutdown and new construction phase since the end of 2023, with a shutdown lasting 9 months. The new capacity is set to be commissioned in mid-October, upgrading lead ingot capacity from 10,000 mt/year to 20,000 mt/year. According to SMM forecasts, October primary lead production is expected to rise by about 7% MoM.

Secondary Lead
In September 2024, secondary lead production increased slightly, up 1.09% MoM but down 34.43% YoY. Lead prices first fell and then rose in September. Although some large smelters in Anhui and Guangxi resumed production, contributing to refined lead output, some enterprises reduced or halted production due to falling lead prices, firm battery scrap prices, and difficulties in procurement, keeping overall refined lead supply relatively stable. Lead prices rebounded in mid-to-late September due to pre-holiday stockpiling and government policies encouraging consumption. Smelters in Shanxi, Inner Mongolia, and Anhui that had previously halted production resumed or prepared to resume. According to the SMM survey, most of these enterprises are expected to maintain stable production in October; some indicated that the contribution to output might be in November due to the pre-production preparation and furnace heating cycle. In mid-to-late October, lead-acid battery consumption remains sluggish, and with high raw material costs, some enterprises in Jiangsu and Hunan halted production for maintenance. Overall, October secondary lead production is expected to increase slightly.
Refined Zinc
In September 2024, SMM reported that China's refined zinc production increased by over 2% MoM but decreased by over 8% YoY, surpassing expected values. Among them, domestic zinc alloy production increased by more than 2,000 mt MoM. In September, domestic smelters increased production, mainly due to the recovery from maintenance in smelters located in Sichuan, Gansu, Guangdong, Shaanxi, and Inner Mongolia.
SMM expects that in October 2024, domestic refined zinc production will increase by less than 1% MoM. Overall, smelters' production is expected to continue increasing in October, with the main growth concentrated in Inner Mongolia, Shaanxi, and Hunan, due to post-maintenance production boosts. Meanwhile, reductions are mainly in Gansu due to routine maintenance. Overall, as raw material inventory shortage at smelters slightly eases, production is expected to continue improving.
Refined Tin
According to in-depth research data from SMM, the domestic production of refined tin in September 2024 saw a significant decline compared to the previous month. In Yunnan, the continuous decrease in the import volume of Burmese tin ore has started to have a substantial impact on the smelting process due to tight supply at the mining end. Coupled with some companies undergoing annual maintenance shutdowns, this led to a sharp decline in tin ingot production in September. SMM's research indicates that the metal content of tin ore imported from the Wa State region of Myanmar remained at relatively low levels in September, highlighting the growing shortage of raw materials for smelters in Yunnan. Many smelters and beneficiation plants are facing production cuts due to insufficient raw materials. Particularly in Gejiu, the production of several smelters and beneficiation plants has been severely affected, with some companies forced to use low-grade ore or tailings for production, resulting in decreased recovery rates and increased production costs. Similarly, the Jiangxi region is also noteworthy. Here, some smelting enterprises are facing severe challenges in raw material supply, making it difficult for them to maintain current production levels, leading to a certain degree of production decline. Additionally, some companies have slightly reduced production due to equipment maintenance. In Inner Mongolia and Guangxi, the overall production of some smelting enterprises remains stable, but considering the raw material supply issues, future production growth is unlikely. Meanwhile, smelting enterprises in Anhui and other regions report that the recent procurement of tin concentrate and scrap has been challenging, with current production declining month by month. Looking ahead, we have made the following forecasts for refined tin production in various regions in October: Due to the difficulty in effectively replenishing raw material inventories before the lifting of restrictions on Burmese Wa State tin ore, and with the raw material inventories of beneficiation plants and smelters nearly depleted, national tin ingot production in October is expected to decline, and this situation may persist until the end of the year.
Refined Nickel
In September 2024, national refined nickel production increased by 7.7% MoM and 48.3% YoY, with cumulative growth at 39.24% YoY. Regarding the domestic refined nickel production increase pace, although some nickel companies hold cautious expectations for production growth, the overall market increment remains considerable. On one hand, some new projects launched this year are experiencing a production ramp-up. Production is expected to have some growth potential moving forward. On the other hand, a series of favorable macro policies in late September boosted sentiment in the futures market, leading to an increase in futures prices around the National Day holiday, further bolstering market confidence. Despite concerns about strong expectations but weak reality for short-term nickel prices, the market overall still expects some upward movement in nickel prices in the fourth quarter. In October, under this expectation, national refined nickel production is expected to rise by 0.95% MoM and 32% YoY, with cumulative growth at 38.4% YoY.
NPI
In September 2024, the national NPI production in physical content decreased by approximately 0.95% MoM, while the metal content increased by about 4.83% MoM. The decline in physical content and rise in metal content were mainly due to the decline in low-grade NPI production amid falling prices of 200-series stainless steel. With expanded losses, integrated 200-series stainless steel mills adjusted their production pace, reducing the output of 200-series stainless steel and consequently lowering low-grade NPI production. Additionally, in September, a smelter in east China resumed part of its production lines and ramped up production, while a smelter in north China saw an increase in production driven by downstream demand for high-grade NPI, boosting the overall national NPI metal content. Reviewing September, high-grade NPI prices fluctuated downward, but with support from downstream stainless steel demand and cost support, smelters' losses improved compared to before, driving a recovery in production. Overall, the metal content of high-grade NPI increased by 7.10% compared to August.
In October 2024, national NPI production in physical content is expected to rise by approximately 5.36% MoM, with metal content expected to increase by about 2.69% MoM. According to an SMM survey, a smelter in north China plans to overhaul a production line, leading to a decrease in output compared to September, while a smelter in east China continues to ramp up production on its restored line, supporting high-grade NPI production. Additionally, in October, stainless steel prices are expected to rebound due to favorable macro policies, with profits for 200-series stainless steel recovering, leading to higher production expectations. Integrated 200-series stainless steel plants are expected to increase low-grade NPI output, with physical content expected to rise by about 7.26% in October. In summary, domestic NPI production in October is expected to reach a yearly high.
Indonesian NPI
In September 2024, Indonesian NPI production slightly increased by 0.72% MoM and 1.3% YoY. The cumulative increase for 2024 was 6.5% YoY. On the supply side, the market's strong expectations for a significant release of Indonesia's RKAB laterite nickel ore quota in September were not realized. The supply from the Philippines continued to provide important support to the Indonesian nickel market. Additionally, with the weakening impact of weather factors in Indonesia and the gradual increase in circulating supply of domestic trade laterite nickel ore, the tight supply situation of nickel ore in the market was somewhat alleviated. On the demand side, with the ramp-up demand from new production line projects within the year and the potential for additional production from new lines in the fourth quarter, Indonesian smelters still have some potential for increased production. Furthermore, with the market still expecting new developments in the RKAB in October, the marginal easing of domestic laterite nickel ore supply in Indonesia is expected to continue, and the grade of Indonesian NPI will further improve. It is expected that in October, Indonesian NPI production will increase by 2.7% MoM and 8.4% YoY, with a cumulative increase of 6.7% YoY.
Nickel Sulphate
In September 2024, the national production of nickel sulphate was 32,400 mt (metal content), or 147,400 mt in physical content, up 2% MoM, down 11.1% YoY. In September, demand side, approaching the Mid-Autumn Festival and National Day, most ternary cathode precursor companies had certain restocking needs, thus consuming October demand in advance, leading to an increase in demand for nickel salts. Supply side, nickel salt smelters scheduled production based on sales, and since cathode material companies actively digested and adjusted inventories, they maintained minimal finished product inventories and about half a month's worth of raw material inventory. Nickel salt smelters slightly increased production due to the increased demand from precursors.
In October, demand side, as most precursor companies had completed their nickel salt restocking by the end of September, the inquiry and transaction activity decreased MoM, with weaker acceptance of high-priced nickel salts. Supply side, with LME nickel prices rising during the National Day holiday, most nickel salt smelters faced continued losses. Under weak demand and ongoing losses, it is expected that nickel salt production in October will slightly decrease. Currently, it is estimated that in October 2024, the national production of nickel sulphate will be 30,500 mt (metal content), or 138,600 mt in physical content, down 6.0% MoM, down 19.8% YoY.
Battery-grade Manganese Sulphate
In September 2024, China's production of high-purity manganese sulphate decreased both MoM and YoY. In September, the price of raw material sulphuric acid declined, weakening cost support. Market demand was not boosted by the traditional "September-October peak season," with most companies still fulfilling long-term contracts and spot order performance being poor. Due to these two factors, high-purity manganese sulphate companies faced significant pressure, with weak support for prices. Most companies responded to the market downturn by jointly reducing production to avoid the risks of oversupply and inventory buildup. As a result, production was very cautious, and market supply also decreased. Looking ahead to October, downstream ternary cathode precursor companies are expected to mainly purchase based on immediate needs, with some stocking demand possible. However, the supply-demand imbalance in the market is unlikely to ease, and high-purity manganese sulphate companies will continue cautious production. Overall, it is expected that China's production of high-purity manganese sulphate will slightly increase in October, but the extent will be limited.
Electrolytic Manganese Dioxide
In September 2024, China's EMD production increased both MoM and YoY. The main reason was a slight increase in downstream demand for primary batteries, which boosted the production of carbon-zinc and alkaline manganese type EMD. In the secondary battery market, although there was a recovery in demand for LMO, the procurement of EMD remained low and unstable, leading to low production enthusiasm for LMO type EMD. Therefore, its production did not significantly increase. It is expected that in October, the primary battery market will continue the trend of September, while the demand in the secondary battery market may further improve, slightly boosting the production of LMO type EMD. In summary, EMD production in October is expected to increase slightly MoM.
Mn3O4
In September 2024, China's Mn3O4 production increased both MoM and YoY. The production of electronic-grade and battery-grade Mn3O4 increased slightly. In September, the LMO market showed signs of recovery, driving up the demand for battery-grade Mn3O4. Additionally, the rapid development of LMFP technology led many companies to use Mn3O4 as the main manganese source, which also contributed to the increase in production schedules for Mn3O4 companies. Looking ahead to October, the LMO market is expected to continue recovering due to rising lithium carbonate prices. Mn3O4 still holds cost advantages over manganese dioxide, which will further boost the production of battery-grade Mn3O4. Based on market feedback, China's Mn3O4 production is expected to increase slightly MoM in October.
High-carbon ferrochrome
According to SMM data, national production of high-carbon ferrochrome further declined in September 2024. In September, the purchase price of high-carbon ferrochrome by stainless steel mills fell, leading to a decrease in retail prices. This trend caused some ferrochrome producers to face a situation where production costs exceeded market prices. Additionally, there was a severe oversupply of high-carbon ferrochrome throughout the year, increasing the difficulty of sales through retail channels, and producers faced significant pressure to sell production outside of long-term contracts. As ferrochrome producers had been continuously operating for an extended period, their outlook for the market was weak, prompting more producers to voluntarily conduct maintenance and reduce production.
In October, high-carbon ferrochrome production is expected to further decline compared to September, potentially falling below 700,000 mt. In October, the bidding prices from mainstream stainless steel mills dropped significantly, causing ferrochrome producers to fully enter a state where costs exceeded prices. Recently, large RKEF facilities in Inner Mongolia have seen concentrated shutdowns for maintenance. However, most ferrochrome producers still have substantial inventories of raw materials from earlier periods that have not been consumed, and the decline in chrome ore prices has gradually reduced costs. Stainless steel prices have shown a strengthening trend driven by macro policies, and the profits of stainless steel mills have gradually recovered, reducing their willingness to cut production. Although the ferrochrome market was previously in a state of severe oversupply and remained generally weak, the pessimistic sentiment in the market has somewhat eased. It is expected that the pace of ferrochrome production cuts may slightly slow down.
Stainless Steel
According to an SMM survey, the total stainless steel production in China in September 2024 decreased by 0.3% MoM and about 3% YoY, with a cumulative increase of about 3% YoY. Specifically, the production of 200-series stainless steel decreased by 6% MoM, while the 300-series increased by about 1% MoM, and the 400-series increased by about 4% MoM. The anticipated September peak season was missed, with stainless steel production and inventory at high levels, leading to severe oversupply. Both futures and spot prices dropped significantly, and with nickel ore prices remaining firm, 200 and 300-series stainless steel mills suffered losses greatly. In South China, stainless steel mills frequently announced maintenance or even shutdowns and production cuts, with a noticeable decline in 200-series production. However, there was a divergence in the 300-series; on one hand, NPI production in Indonesia and China climbed, and integrated stainless steel mills managed costs well, resulting in slight production increases or maintaining high operating rates. On the other hand, non-integrated stainless mills faced high costs and narrowing profits, leading to gradual production cuts. Some mills in South China resumed production after summer maintenance, resulting in a slight increase in 300-series production in September. For the 400-series, there was a significant increase, mainly due to a stainless steel mill in South China switching to 400-series production, combined with reduced costs amid a drop in chrome ore and ferrochrome prices in September while demand remained stable. Finished product prices held steady, and profits recovered, leading to an overall increase in operating rates for the 400-series stainless steel. Entering October, influenced by favourable macro factors, prices for all series of stainless steel rose. NPI and chrome manganese raw material prices declined in mid-to-late September due to negative feedback from stainless steel, leading to good profit recovery in October. Production schedules for 200-series stainless steel mills previously reducing production were also adjusted upwards. It is expected that the total stainless steel production in October will increase by about 1%, with the 200-series increasing by about 3.85%, the 300-series remaining roughly flat with some mills maintaining production cuts and a slight decrease of about 0.2%, and the 400-series production slightly increasing by about 0.3%.
EMM
According to SMM data, in September 2024, China's EMM production increased by 0.9% MoM and 24% YoY, with a cumulative growth of 17% YoY. The production increase in September was mainly due to higher operating rates at smelters in Guizhou and Guangxi. On one hand, after the end of summer in September, electricity costs decreased, reducing costs; on the other hand, downstream demand is expected to recover in October, combined with increased demand after the end of overseas summer holidays, leading to an overall increase in orders. Meanwhile, production of EMM plants in other regions remained at August levels, resulting in a recovery in overall EMM production in September. Entering October, after the alliance meeting and favorable policies, EMM prices rose overall. The reduction in downstream steel production was less than expected, with some steel production even increasing compared to September. This expanded profit margins and demand for EMM, with EMM producers maintaining overall operating levels. However, some EMM plants in Guizhou plan to halt production in October, so production is expected to decline.
SiMn Alloy
According to SMM data, China's total SiMn alloy production in September 2024 decreased by about 3% MoM and about 30% YoY. From January to September 2024, China's cumulative SiMn alloy production fell by over 10% YoY. The main reason for the reduction in September was the production cuts in most SiMn alloy plants in both north and south China. Specifically, in north China, such as Inner Mongolia, the high operating rate was maintained, and although some SiMn alloy plants underwent maintenance, the actual production fluctuation was minimal. In south China, due to severe losses on production and weak downstream demand, SiMn alloy plants slightly reduced production. The SiMn alloy plants that had previously halted production due to production pressure have not yet resumed, leading to a significant reduction in overall production in the south. Overall, SiMn alloy production continued to decline, with the total national SiMn alloy production showing a decrease in September. Entering October, firm coke prices are driving up SiMn alloy production costs, and due to production pressure, a significant increase in the operating rate of SiMn alloy plants is unlikely. Additionally, as the current SiMn alloy inventory is at a relatively high level, production growth remains under pressure. Therefore, the overall SiMn alloy production in October is expected to remain relatively stable.
According to SMM, China's silicon metal production in September decreased by 20,000 mt, down 4.3% MoM, but increased by 98,000 mt YoY, up 27.5% YoY. From January to September 2024, the cumulative increase was 1.037 million mt YoY, up 39.1% YoY.
In September, silicon metal production declined in multiple regions, with Yunnan and Sichuan experiencing the largest drops. The operating rates of the three major top-tier enterprises in Xinjiang remained stable. The reduction in production in Yunnan and Sichuan was mainly due to market downturns and production pressures, with some arc furnace reductions at the end of August and early September, reflected in September supply decrease. Gansu, Guizhou, and Heilongjiang also saw some capacity shutdowns for maintenance, leading to production declines, with some of this capacity expected to resume in October-November.
By mid-October, there will be no significant further reductions in Yunnan and Sichuan in south China, with most silicon enterprises planning to reduce or halt production by the end of October. In north China, some silicon enterprises in Xinjiang have recently increased furnace operations to raise operating rates, along with some enterprises in Inner Mongolia and Gansu resuming production in October and marginal capacity release from new projects. Considering that October has one more day than September, it is expected that national silicon metal production will increase by approximately 10,000-20,000 mt MoM in October.
Polysilicon
In September, polysilicon production increased slightly by 1.7%. This was mainly due to overall good order performance for granular silicon, which maintained a growth trend in the production schedule due to its lower price. Additionally, trial production at new bases of top-tier enterprises contributed to some increase. However, the overall production schedule remained relatively low. In October, polysilicon production will continue to increase slightly. After this, top-tier polysilicon enterprises are expected to have significant production cuts due to the dry season.
PV module
According to SMM statistics, China's PV module production in September remained flat MoM compared to August. In September, PV module companies were still affected by inventory backlog, maintaining a low operating rate in hopes of slightly reducing inventory before Q4. Throughout Q3, the operating rate of module producers was generally low, with variations among companies. The increase for some companies was mainly due to concentrated delivery demands from downstream customers, while the decrease for others was because smaller factories struggled to compete for more orders. Module prices continued to decline in September, with bid prices once again falling below the cash cost for various companies, intensifying profit pressure towards the end of the year. Due to financial pressure and losses, companies generally found it difficult to significantly increase their production schedules. Entering October, China's PV module production is expected to increase MoM. The main reasons are partial inventory reduction by top-tier enterprises at the end of Q3, combined with the year-end delivery peak, concentrated demand, and the pressure to meet shipping targets, leading top-tier enterprises to generally increase their operating rates. Smaller module factories will choose to maintain or reduce production, still facing insufficient orders and losses.
Solar Cells
In September, the total production of cells by Chinese companies decreased by 8.46% MoM. P-type cells decreased by 29.01% MoM, and N-type cells decreased by 4.43% MoM. Orders for solar cells shrank in September, with high raw material inventory at downstream module factories, leading to a reduction in externally purchased cells. Specialized cell manufacturers faced significant inventory pressure, with production cuts mainly in PERC cells and Topcon183 series cells, while BC cell production remained relatively stable. In October, affected by the National Day holiday, some cell manufacturers took 3-7 days off, and there are plans for equipment upgrades, impacting the overall production schedule of solar cells, down about 7% MoM. PERC cells and Topcon183 series cells saw further production cuts.
PV Glass
In September, domestic PV glass monthly production decreased again, down 12.48% MoM from August. Domestic PV glass companies further reduced operations in September, with nearly 6,000 mt/day of furnace capacity being shut down, leading to a rapid decrease in supply. In October, some domestic glass companies still plan cold repairs and shutdowns of furnaces, but due to the increased number of days in October, glass production is expected to slightly increase.
DMC
In September, domestic silicone DMC production decreased by 7.38% MoM from August. The operating rate of domestic monomer enterprises declined again in September, mainly due to the shutdown and maintenance of two monomer enterprises in north China. Additionally, some monomer enterprises in east China slightly reduced their load, bringing the overall industry operating rate down to around 70% for the month. It is expected that the operating rate will continue to decline, primarily because monomer enterprises in east China plan to completely shut down for maintenance in October, with a shutdown period of about 20 days. Furthermore, due to an accident, monomer enterprises in Zhejiang remain shut down with no restart plans, leading to a further decrease in supply.
Magnesium Ingot
According to SMM data, China's magnesium ingot production in September 2024 saw a slight increase MoM. This month, smelters in the magnesium ingot market experienced both production increases and decreases. The reasons for the decrease in magnesium ingot production this month include: first, regular maintenance during the summer by magnesium ingot smelters, with two smelters undergoing maintenance—one in Inner Mongolia and one in Shaanxi—affecting production by approximately 2,300 mt. Second, some companies faced reduced production due to traffic disruptions from road repairs and weak end-use demand, leading to two smelters reducing production and two halting production. The reasons for the increase in magnesium ingot production this month include: first, smelters that previously halted production for maintenance gradually resumed operations, increasing supply. Second, some manufacturers adjusted daily production based on their orders and inventory levels.
Recently, China's magnesium ingot market has shown a stalemate. Due to weak downstream demand and the disproportionate risk-to-reward ratio in market operations, magnesium ingot trading companies have low stocking intentions, and the market lacks supportive factors, leading to a bearish sentiment among industry insiders. Consequently, there is insufficient momentum for price increases. On the other hand, considering that current market prices are close to the breakeven point for many plants, smelters are reluctant to lower prices. It is expected that magnesium ingot prices will fluctuate rangebound in October. As previously maintained smelters gradually resume production, coupled with two smelters planning to restart in October, October magnesium ingot production is expected to increase to 76,000 mt.
Magnesium Alloy
According to SMM data, China's magnesium alloy production in September 2024 slightly decreased compared to August. The operating rate of downstream processing enterprises for magnesium alloy declined. The cut-throat competition in processing fee quotations intensified, but the high aluminum prices significantly highlighted the cost-effectiveness of magnesium alloy. The focus on end-use applications of magnesium alloys has steadily increased, with some magnesium alloy manufacturers operating at near full capacity. The reduction in production in September was due to the continued deterioration in end-use demand, making it difficult to follow up on magnesium alloy transactions. The cut-throat competition in processing fees made profitability challenging for manufacturers, leading some to reluctantly lower their operating rates. Amid continuous low-level fluctuation of raw material magnesium ingot prices, downstream enterprises purchased as needed. The essential demand remained, but the recovery cycle for the magnesium alloy market was prolonged. SMM estimates that magnesium alloy production in October will remain at 30,000 mt.
Magnesium Powder
According to SMM data, China's magnesium powder production saw a slight increase MoM in September 2024. Due to sluggish orders and strong wait-and-see sentiment among downstream enterprises amid fluctuating magnesium ingot prices, some magnesium powder companies remained production low. A representative from a major magnesium powder company stated that due to the sluggish domestic economic situation, steel mills' profits are thin, and frequent changes in magnesium ingot prices have made downstream procurement cautious. Considering that low-priced magnesium ingots might stimulate an increase in magnesium powder orders, SMM expects domestic production in October to remain at 8,000 mt.
Titanium Dioxide
According to SMM data, China's titanium dioxide production slightly decreased MoM in September 2024. Production in most regions declined due to market situations, raw material costs, and environmental protection inspections. Companies faced significant pressure and slightly reduced their operating rates.
September marked the traditional peak season, but due to weak demand, the market remained in a downward trend with significant shipment pressure. Some manufacturers reduced or halted production, leading to decreased operating rates. Demand in October is expected to remain sluggish, with a pronounced supply-demand mismatch. Early October saw leading companies lowering prices, further weakening market prices. Additionally, the potential announcement of anti-dumping duties from India and Brazil in October adds competitive pressure to the titanium dioxide market, with strong market sentiment of caution. It is expected that titanium dioxide production will continue to slightly decrease in October.
Sponge Titanium
According to SMM data, China's sponge titanium production in September 2024 saw a slight decline MoM. Affected by market conditions, sponge titanium enterprises faced significant production pressure, with some reducing output, leading to an overall decrease in production. Due to reduced demand in the downstream titanium market, the sponge titanium industry experienced considerable operational pressure, with weak new orders and an increasing trend in inventory. Prices continued to weaken, with a further decline of 2,000-3,000 yuan/mt by the end of September compared to the beginning of the month. Enterprises faced losses, and the market was oversupplied. The short-term outlook for the sponge titanium market remains pessimistic, with more companies expected to reduce production in October, leading to a continued decline in sponge titanium production.
Light Rare Earths
In September 2024, domestic production of Pr-Nd oxide and Pr-Nd alloy both increased MoM. The main increase in Pr-Nd oxide production was in Jiangxi, Jiangsu, and Shandong, while the increase in Pr-Nd alloy production was mainly in Guangxi and Inner Mongolia.
According to the SMM survey, the operating rate of downstream magnetic material companies increased, and the seasonal effect led to stronger stocking intentions from buyers. Driven by downstream demand, upstream production also increased. However, due to relatively tight supply at the mining end, the increase in oxide production was not as significant as that of the alloy. Most of the increase was concentrated in scrap recycling companies, where the operating rate significantly increased as the degree of inversion lessened.
The rise in demand led to a noticeable increase in inquiry and purchasing activity in the Pr-Nd market during this period. Holders were bullish and reluctant to sell, causing low-priced Pr-Nd sources to tighten quickly. Overall, Pr-Nd prices showed an upward trend in September.
Medium-heavy rare earth
In September 2024, the production of medium-heavy rare earth oxides saw a slight decline MoM, with the main reduction occurring in Jiangxi. Jiangxi is a major producer of medium-heavy rare earths, and the insufficient demand for medium-heavy rare earth metals led to low enthusiasm for raw material stocking by metal factories, resulting in a slight reduction in oxide production. However, by the end of September, there was a significant increase in the import volume of Myanmar ores. Under these circumstances, it is expected that the production of medium-heavy rare earth oxides will increase in October.
NdFeB
In September 2024, the domestic production of NdFeB magnetic materials did not show a significant increase. According to an SMM survey, the anticipated "September peak season" effect was not evident for magnetic material companies, as downstream market orders did not see a notable rise. Meanwhile, upstream raw material prices fluctuated upward, and by late September, frequent bidding by major magnetic material manufacturers led to a continuous increase in Pr-Nd prices. This made it difficult for downstream products to be sold at high prices. Downstream customers were not very receptive to the rising upstream prices, resulting in decreased inquiry interest and relatively weak market demand. Under these circumstances, magnetic material companies adhered to the principle of restocking as needed, with a strong market sentiment of caution, leading to a small increase in production.
With the arrival of October, China Northern Rare Earth's listing prices increased by 3% compared to September, and upstream market confidence remained strong. With the implementation of the "Rare Earth Management Regulations" and favorable news such as the US Fed's interest rate cut, it is expected that in the fourth quarter, orders for downstream magnetic materials may increase. In this context, the production of magnetic material companies in October is also expected to achieve some growth.

Molybdenum Concentrate
According to SMM statistics, China's molybdenum concentrate production in September increased by about 4% MoM. Entering September, the main reason was the continued strong demand in the domestic molybdenum market, prompting mining companies to actively boost production and maintain high operational loads. Additionally, the impact of environmental protection-related controls on molybdenum mines in Hebei weakened, gradually returning to normal production, leading to a slight increase in domestic molybdenum concentrate production.
Looking ahead to October, molybdenum market demand is expected to remain robust, with few mines planning maintenance. It is expected that domestic molybdenum concentrate production will continue to remain at a high level in October.

Ferro Molybdenum
According to SMM statistics, China's ferro molybdenum production in September increased by about 10% MoM. The main reason was that the domestic ferro molybdenum bidding volume increased from 15,000 mt in August to 16,000 mt in September, indicating very strong market demand. Additionally, the low spot inventory of ferro molybdenum led major ferro molybdenum plants to resume high production schedules.
Entering October, although the production schedule of downstream molybdenum-containing steel slightly decreased, it remains at a high level, and demand for ferro molybdenum will not significantly decrease. Coupled with most ferro molybdenum smelters still producing based on existing orders, future new orders will only further enhance capacity utilisation rates. Therefore, it is expected that ferro molybdenum production in October will continue to increase slightly.
Silver
In September, SMM data showed production of 1# silver increased MoM and also showed a YoY increase. Fourteen companies reported increased silver production in September due to: 1) resumption after market maintenance, 2) production plan requirements, 3) increased silver content in ore, and 4) a boost in overall silver prices compared to August, which slightly increased production enthusiasm.
Eleven companies reported decreased silver production in September, but the reduction was minimal compared to the previous month. The decrease was mainly due to reduced silver content in ore, with some companies adjusting production according to their plans.
After the release of this week's Thursday meeting minutes, market predictions for aggressive interest rate cuts decreased, putting pressure on prices. However, due to the inherent environment of interest rate cuts, the decline in silver prices was limited. It is expected that prices will decrease in October before gaining momentum. Entering the fourth quarter, the market will focus on clearing inventory to recover funds and complete annual plans, so a slight decrease in silver production is expected in October.
Silver Nitrate
In September, the production of silver nitrate increased slightly. The reasons for the increase differed from August, as the market began stocking for the Mid-Autumn Festival and National Day. Although the downstream market expansion this year was not as significant as last year, to prevent the lack of raw materials in October as seen last year, all segments stocked up as expected. Additionally, in early to mid-September, the relatively low silver prices did not dampen market purchasing enthusiasm. The production of silver nitrate producers changed, with some reducing output due to holidays like the Mid-Autumn Festival and other reasons. Orders were distributed to other companies, slightly increasing the production gap compared to August.
Entering October, as the stocks from pre-holiday were not fully consumed and with extended downstream holidays and low operating rates, demand did not see a strong boost. It is expected that silver nitrate production will decrease in October.

Antimony Ingot
According to the SMM survey, in September 2024, China's antimony ingot production (including antimony ingot, crude antimony conversion, antimony cathode, etc.) significantly decreased by 10.49% MoM compared to August. Specifically, among the 33 surveyed companies, 17 stopped production, an increase of 6 from the previous month; 12 reduced production, a decrease of 7 from the previous month; and 4 maintained normal production, an increase of 1 from the previous month. The antimony ingot production saw a significant decline after a rebound in the previous month. Many market participants consider this normal due to tight domestic and international raw materials, falling domestic prices, and difficulties in importing overseas raw materials. The tight raw materials led to a production decrease in September, which is also seen as normal. Therefore, some market participants expect the antimony raw material market to remain weak. SMM expects that in October 2024, national antimony ingot production may continue to decline compared to September.
Note: Since May 2022, SMM has been publishing national antimony ingot production (including antimony ingot, crude antimony conversion, antimony cathode, etc.). Thanks to SMM's high coverage rate in the antimony industry, the survey includes 33 producers across 8 provinces, with a total sample capacity exceeding 20,000 mt and a capacity coverage rate of over 99%.
According to SMM's survey of major sodium antimonate manufacturers nationwide, the production of first-grade sodium antimonate in China in September 2024 significantly decreased by 14.78% compared to August. Looking at the changes in first-grade sodium antimonate production since Q2, after April, except for a noticeable rebound in June, other months continued to see a downward trend. The decline in August was mainly due to a sudden production halt by one manufacturer, while in September, many manufacturers experienced a certain degree of production decline.
Specifically, among the 11 surveyed by SMM, three manufacturers were in a shutdown or testing state in September, and most other sodium antimonate manufacturers primarily saw a decrease in production, with a few remaining stable, leading to an overall production decline. SMM expects that the probability of maintaining stable production of first-grade sodium antimonate in China in October is relatively high, but some market participants believe that production may continue to decline.

Refined Bismuth
According to SMM's survey of bismuth producers nationwide, China's refined bismuth production in September 2024 saw a significant decrease of 9.04% MoM compared to August 2024. This marks the first decline since production began its upward trend in April. From the producers' perspective, with bismuth prices stabilizing around 90,000 yuan/mt and raw material shortages re-emerging, the market generally expected the September production drop. Detailed data shows that among SMM's 24 surveyed companies, six saw a significant decrease in production in September, while four experienced a notable increase, leading to an overall decline in bismuth ingot production compared to the previous month. However, some market participants still indicate that the supply of bismuth raw materials is expected to remain tight, making raw material shortages a potential recurring factor affecting future production. Therefore, SMM expects the national refined bismuth production in October 2024 to remain stable, though a slight decline cannot be ruled out.

Note: Since October 2022, SMM has been publishing national refined bismuth production data. Thanks to SMM's high coverage rate in the bismuth industry, the survey includes 24 producers across eight provinces, with a total sample capacity exceeding 50,000 mt and a coverage rate of over 99%.

Ammonium Paratungstate (APT)
According to SMM statistics, China's APT production in September increased by about 5% MoM. During September, APT smelters increased production slightly to meet long-term contract demands and supplement spot inventory. Looking ahead to October, due to lower-than-expected inventory replenishment in September and mediocre performance in new orders from downstream markets, some APT smelters opted for production halts and maintenance during the National Day holiday. APT production in October is expected to decrease slightly.
Lithium Carbonate
According to SMM statistics, the total domestic production of lithium carbonate in September continued to fluctuate at highs, down 6% MoM and up 38% YoY. By raw material, the total production of lithium carbonate from spodumene decreased by 3% MoM. Most lithium chemical smelters using spodumene maintained high and stable operating rates in September to fulfill long-term contracts and retain market share, while non-integrated smelters kept low operating rates due to cost issues. Additionally, some smelters experienced reduced production due to production line maintenance, leading to a decrease in spodumene-based lithium carbonate production. The total production of lithium carbonate from lepidolite decreased by 22% MoM, with frequent reports of production cuts in Jiangxi. Confirmed significant reductions at major smelters in the region, while other non-integrated smelters maintained low operating rates, resulting in a notable decrease in lepidolite-based lithium carbonate production. The total production of lithium carbonate from salt lakes decreased by 5% MoM, affected by weather conditions that lowered operating rates in the region. In contrast, the total production of recycled lithium carbonate saw a rare increase, up 21% MoM, mainly driven by increased orders for processing waste batteries from a battery maker, boosting production at recycling smelters.
Entering October, driven by continued strong downstream demand, some lithium chemical smelters are expected to slightly increase their production schedules. Additionally, some smelters plan to switch from lithium hydroxide production to lithium carbonate production, leading to a steady rise in domestic lithium carbonate production, expected to increase by 1%-2% MoM.
In the current spot market for lithium carbonate, apart from some material factories facing raw material shortages due to reduced customer supply and needing to restock as needed, other factories have stable long-term orders, limiting the increase in downstream demand for spot lithium carbonate. Upstream smelters continue to stand firm on quotes. Given this supply-demand situation and the current high inventory levels of lithium carbonate, spot prices are expected to have room for a slight increase, showing range-bound fluctuations.
Lithium Hydroxide
According to SMM statistics, China's lithium hydroxide production in September 2024 slightly decreased MoM by about 1%, while it was up approximately 30% YoY.
Supply side, regarding raw material types, lithium hydroxide from the smelting side decreased about 1% MoM and increased 44% YoY in September, while production from the causticisation side fell about 8% MoM and dropped approximately 48% YoY. On the smelting side, the changes in September mainly resulted from some smelters gradually resuming production after maintenance in August and others adjusting shipment pace due to increased orders in October and holiday adjustments. Additionally, delays in new production lines due to weather and weak market demand led to a reduction in switch from lithium hydroxide production to lithium carbonate and outsourcing orders. Overall, the total from the smelting side saw a slight decrease. Regarding causticisation, aside from a small increase in orders for some companies in October, other companies experienced a reduction in overall causticisation volume due to new production lines not meeting expectations and product quality issues, maintaining a relatively low operating rate.
Demand side, in September, some major ternary cathode manufacturers saw a reduction in orders, combined with decreased production from small and medium-sized manufacturers, leading to a significant overall production decline of 6%-8%. Among these, production of 8-series and above decreased by 10%-15%, mainly due to a downward trend in demand for ternary materials after increases in July and August, driven by changes in end-use demand.
In terms of exports, due to the peak season and inventory adjustments, lithium hydroxide exports in August increased by about 15%. Based on recent research on order negotiation progress and changes, exports are expected to decline again in September-October. Considering the slight decrease in upstream production and weakened downstream demand, lithium hydroxide is expected to be in a slight surplus in September-October.
Looking at October, China's lithium hydroxide production is expected to remain relatively stable compared to September, mainly because most manufacturers produce according to orders, maintaining a stable production state.
Cobalt Sulphate
In September, China's cobalt sulphate production decreased by 2% MoM and 28% YoY. The main reasons for the production decline in September were high spot inventory levels and downstream demand focusing on integration, leading to minimal spot demand. Some smelters, under inventory and cost pressures, chose to reduce production, resulting in an overall production decline. It is expected that in October, downstream demand will show further signs of weakening, so cobalt sulphate production may continue to decline.

Co3O4
In September, China's Co3O4 production increased slightly both MoM and YoY. The main reason for the production increase in September was the boost from Huawei's new models, leading to an increase in LCO enterprises' production schedules, which in turn drove up demand for Co3O4, mainly among top-tier enterprises. On the other hand, with the National Day holiday approaching, some companies arranged production in advance to cope with the holiday, boosting Co3O4 production schedules. It is expected that in October, downstream LCO market demand will become mediocre, with low purchase willingness for Co3O4, leading to a MoM production decline and limited YoY growth.
Ternary Cathode Precursor
In September 2024, China's production of ternary cathode precursors decreased by 5% MoM and 1% YoY. Supply side, in September, due to continuously falling raw material prices and intense market price competition, manufacturers faced operational difficulties and losses, leading to reduced production schedules for small and medium-sized enterprises. Only leading precursor companies maintained stable production schedules, with a high concentration among top players. Demand side, after a brief recovery in stocking demand for ternary cathode materials, there was another decline in September. Simultaneously, overseas demand for ternary cathode materials also decreased, resulting in a significant reduction in precursor orders in September. The market mainly focused on maintaining essential demand. It is expected that in October, China's production of ternary cathode precursors will continue to decrease by 5% MoM and 4% YoY, with the market showing a weak supply and demand pattern.
Ternary Cathode Materials
In September 2024, China's ternary cathode materials production decreased by 7% MoM and was up 3% YoY. The overall operating rate in September was 40%, lower than in August. Overseas ternary cathode materials production decreased by 10% MoM from August. In terms of series proportion, in September, the 5-series accounted for 24%, the 6-series for 32%, and the 8-series for 37%. Compared to the previous month, the 6-series maintained a significant increase, while the 8-series high-nickel proportion showed a noticeable decline. Market structure-wise, Ronbay, Reshine, and Brunp occupied the top three in industry production, with CR3 at 48%, CR5 at 60%, and CR10 at 80%, indicating a further increase in market concentration compared to August. Demand side, the current demand for ternary cathode materials remains low. On one hand, overseas NEV sales continue to decline, and on the other, the domestic market is increasingly occupied by LFP. In September, ternary battery cell production increased by 2% MoM, but the increase was lower-than-expected. The stocking pace of small power and digital 3C manufacturers has slowed, reducing demand for ternary cathode materials. In October, ternary cathode materials production is expected to continue its downward trend, with an anticipated decrease of 4%.
Iron Phosphate
In September, China's iron phosphate production increased 15% MoM and 65% YoY. The production increase was significant, driven by downstream demand, leading to a gradual recovery in the upstream iron phosphate market. Both top-tier and second-tier enterprises showed good operational status, with a noticeable increase in orders, further boosting production. Some companies reduced output due to equipment maintenance, but the overall industry production trend was upward.
Cost side, phosphate prices rose in September. Mid-month, some companies resumed phosphate production, increasing market supply. Pre-holiday downstream stocking supported the market, maintaining supply-demand balance; industrial ammonium prices remained stable.
Price side, iron phosphate prices saw a slight increase in September, with most companies intending to raise prices due to tight market supply and high phosphate prices. October's production schedule growth is expected to slow, but market feedback is optimistic, with October's LFP production expected to maintain roughly the same MoM and YoY growth as in September.
LFP
In September, China's LFP production increased nearly 20% MoM and was up nearly 100% YoY. Boosted by the strong "September-October peak season," the LFP market showed robust momentum, with production continuing to rise compared to August. First and second-tier companies had relatively full orders, and this trend is expected to continue into October. Demand side, the peak season for downstream NEV and energy storage sectors arrived as expected, with battery cell production schedules continuing to increase MoM in September and October. The frequent release of new cars in H2 also boosted downstream power demand. The demand increase for overseas and domestic energy storage projects remained significant, especially for medium-sized LFP producers, which showed more notable growth in energy storage orders. It is expected that LFP production growth will slow in October but will still maintain a relatively optimistic production situation, with a high operating rate. Compared to September, LFP production is expected to remain flat MoM but increase nearly 100% YoY.
LCO
In September, LCO production increased 11% MoM and was up 11% YoY. The increase in LCO production and supply in September was driven by sufficient stocking orders from downstream battery cell manufacturers in the digital sector, particularly for mobile phone end-use. The release of new models by mobile phone brands in September stimulated consumer demand for new devices. Additionally, domestic mobile phone producers are expected to launch annual flagship models in October and November, maintaining high interest in the digital market. However, future stocking by LCO battery cell manufacturers will depend on changes in actual mobile phone sales, which will guide procurement plans. With the completion of a stocking cycle in September, LCO production in October is expected to decrease by 10% MoM but increase by 1% YoY.
LMO
In September 2024, China's LMO production increased MoM. The main reason was the rise in lithium carbonate prices, which led to a rebound in LMO prices, boosting companies' production enthusiasm. The recovery in downstream market demand also increased the production schedule of LMO companies. It is expected that in October, lithium carbonate prices will continue to rise, further enhancing downstream market purchase willingness, driving an increase in production schedules. However, the overall market oversupply remains difficult to resolve. Overall, China's LMO production in October is expected to continue rising MoM, but the increase will be limited.