Overview of China Metal Production in May 2025 and Forecast for June

SMM's monthly production data for base metals is released at the end of each month, aiming to uncover the true fundamentals for industry chain professionals and investors, and providing a clearer grasp of the future direction of the non-ferrous metal market.

Overview of China Metal Production in May 2025 and Forecast for June

Copper Cathode

In May, SMM's China copper cathode production increased by 12,600 mt MoM, a rise of 1.12%, and was up 12.86% YoY. The cumulative production from January to May increased by 544,800 mt YoY, a growth of 11.09%.

Copper cathode production in May exceeded expectations by 8,400 mt, primarily due to the following reasons: 1) Smelters that underwent maintenance in April resumed production as scheduled, with output exceeding expectations; 2) Production at smelters that commenced operations earlier continued to ramp up; 3) The volume of imported copper anodes rose in May; 4) Copper concentrate inventory at major domestic ports declined slightly in May, from 835,600 mt at the end of April to 795,900 mt at the end of May, though it remained significantly higher than the 575,200 mt in mid-March, indicating that copper concentrate availability for smelters was not tight. 5) Sulphuric acid prices rebounded in May due to reduced supply and increased export demand, a trend expected to persist until late June. The rise in sulphuric acid prices effectively offsets smelter losses. However, it is worth noting that tight copper scrap supply has led to a decline in production at smelters that do not use copper concentrates (using copper scrap or copper anodes instead), which is also reflected in their lower operating rates (down 3 percentage points to 68.9% in May). Additionally, the first round of mid-year long-term contract negotiations between miner and smelters has begun, with the initial TC quoted at -$15/mt, indicating that most smelters will face losses regardless of whether they rely on long-term contracts or spot cargoes, increasing the pressure for future production cuts.

In summary, the sample operating rate of the copper cathode industry in May was 88.82%, up 1.02 percentage points MoM. Among them, the operating rate of large smelters was 92.73%, up 1.58 percentage points MoM; the operating rate of medium-sized smelters was 84.68%, up 1.92 percentage points MoM; and the operating rate of small smelters was 62.89%, down 8.5 percentage points MoM. The operating rate of smelters using copper concentrates was 93.3%, up 1.8 percentage points MoM. The operating rate of smelters not using copper concentrates (using copper scrap or copper anode instead) was 68.9%, down 3 percentage points MoM.

As of June, according to our statistics, only one smelter had planned maintenance. However, the number of enterprises experiencing a decline in capacity utilisation rate increased significantly in June. Nearly 40% of the enterprises in our survey sample reduced production to varying degrees in June, doubling the number from May. Therefore, total production in June decreased compared to May.

Based on the production schedules of various enterprises, SMM expects domestic copper cathode production to decrease by 7,200 mt MoM in June, a decline of 0.63%, and increase by 126,100 mt YoY, a rise of 12.55%. The cumulative production from January to June is expected to increase by 670,900 mt YoY, a rise of 11.34%. The sample operating rate of the copper cathode industry in June was 88.26%, down 0.56 percentage points MoM. Among them, the operating rate of large smelters was 91.27%, down 1.46 percentage points MoM; the operating rate of medium-sized smelters was 84.46%, down 0.22 percentage points MoM; and the operating rate of small smelters was 70.65%, up 7.76 percentage points MoM. The operating rate of smelters using copper concentrates was 92.5%, down 0.8 percentage points MoM. The operating rate of smelters not using copper concentrates (using copper scrap or copper anode instead) was 69.6%, up 0.7 percentage points MoM. We expect production to continue to decline in July, with tight raw material supply being the main reason.

Aluminum

According to SMM statistics, domestic aluminum production in May 2025 (31 days) increased by 2.7% YoY and 3.4% MoM. In May, the operating capacity of domestic aluminum smelters remained stable MoM, mainly due to no new projects or maintenance and production cut appearing during the month. The supply of raw materials for aluminum smelting was sufficient, and profits were moderate. In May, the proportion of liquid aluminum in domestic aluminum smelters increased significantly. The industry's proportion of liquid aluminum rose by 1.48 percentage points MoM to 75.5% in May, mainly due to reduced casting ingot production and an increased proportion of liquid aluminum in enterprises in multiple northern regions. It is expected that the proportion will continue to fluctuate at highs in the future. Based on SMM's data on the proportion of liquid aluminum, the domestic aluminum casting ingot production in May decreased by 6.15% YoY to approximately 913,000 mt.

Capacity Changes: As of the end of May, SMM estimated that the existing capacity of domestic aluminum was around 45.69 million mt (considering capacity replacement and the dismantling of old plants, SMM made adjustments at the end of April by removing capacity that was double counted). The operating capacity of domestic aluminum was approximately 43.91 million mt. The industry's operating rate remained flat MoM and increased by 1.0 percentage point YoY to 96.1%. There were no new capacity additions, capacity replacements, or production cuts in May, and the aluminum industry operated steadily overall. The second batch of projects relocated from Shandong to Yunnan is expected to be implemented in Q3. SMM will continue to monitor changes in aluminum capacity.

Production Forecast: Entering June 2025, the operating capacity of domestic aluminum will continue to fluctuate at highs. Considering the progress of remaining new or replacement projects this year, no commissioning is expected in the short term. Additionally, the rising proportion of liquid aluminum may become a significant factor affecting the spot aluminum market. Currently, many aluminum plants in northern China have increased the proportion of liquid aluminum, reducing casting ingot production, which may subsequently impact arrivals in major regions. It is still necessary to monitor the trend of the proportion of liquid aluminum in the aluminum industry, as well as the inventory and demand for alloyed products.

Alumina

According to SMM data, China's metallurgical-grade alumina production in May 2025 (31 days) increased by 2.66% MoM and 4.06% YoY. As of the end of May, China's existing capacity for metallurgical-grade alumina was approximately 110.82 million mt, while the actual operating capacity decreased by 0.46% MoM, with an operating rate of 77.3%.

The operating capacities of domestic alumina refineries varied in May. Due to an overall decline in bauxite prices and a significant rebound in alumina prices, the profitability of alumina enterprises improved, leading to partial resumption of production at plants that had previously undergone maintenance and production cuts. Meanwhile, some enterprises conducted maintenance and production cuts. Overall, the national operating alumina capacity saw a slight MoM decline in May.

By region:

In May, multiple alumina refineries in Guizhou and Guangxi in south China underwent maintenance and production cuts, leading to a decrease in operating capacity. The operating rates fell by 10.2 and 1.3 percentage points MoM, respectively.

In May, the production decline caused by maintenance and production cuts in Shandong, Shanxi, and Henan in the earlier period was further reflected. Meanwhile, after the improvement in profitability, some alumina capacity resumed production in May. Overall, the alumina operating rates in Shandong and Henan fell by 4.8 and 2.9 percentage points MoM, respectively, while the alumina operating rate in Shanxi rebounded by 1.4 percentage points MoM.

Forecast for June: As of May 30, according to SMM's daily cost-profit model, the average profitability of the alumina industry exceeded 400 yuan/mt. It is expected that alumina capacity will gradually resume production and new capacity will be further released in June. Overall, the domestic operating metallurgical alumina capacity is expected to rebound to around 87.95 million mt/year in June.

Overseas aluminum

According to SMM statistics, the total overseas aluminum production in May 2025 increased by 2.8% YoY, with a monthly average operating rate of 88.4%, up 0.2% MoM and 0.4% YoY.

In May, the new capacity of Vedanta's Balco plant in India was gradually commissioned. According to the plan, the plant will gradually commence production in Q2 2025, with a total capacity of 1.015 million mt after expansion. It is expected to complete the production ramp-up by Q1 2026. Meanwhile, its self-owned Sijilami bauxite mine commenced operations in May, which will help increase the capacity of the Lanjigarh alumina refinery and further ensure the raw material supply for Balco's aluminum expansion. In addition, Alcoa is evaluating the impact of the large-scale power outage in Spain on the production resumption progress of the San Ciprian aluminum smelter. As of early May, the production resumption rate of the plant had increased from 6% to 8%-10%, and it is planned to achieve full production resumption by October 2025, with a designed capacity of 228,000 mt.

Looking ahead to June, with the release of new and resumed production capacity, overseas aluminum production is expected to increase by 2.9% YoY, and the operating rate is expected to rise to 88.5%.

Overseas Metallurgical-Grade Alumina

According to SMM statistics, overseas metallurgical-grade alumina production in May 2025 increased by 3.7% YoY, with the average operating rate of overseas alumina refineries reaching 81.9%, up 0.2% MoM and 2.7% YoY.

The increase in production in May mainly came from the capacity ramp-up of two alumina refineries in Indonesia: PT Borneo Alumindo Prima, controlled by Jinjiang Group, commenced production in January 2025 with a capacity of 1 million mt and is expected to reach full capacity in Q2; PT Borneo Alumina Indonesia, jointly controlled by Inalum and PT Antam, also has a capacity of 1 million mt and is currently close to full capacity. In addition, Rusal's Friguia alumina refinery in Guinea is undergoing maintenance. The maintenance of Roasting Furnace No. 1 was completed in Q1, and the maintenance of Roasting Furnace No. 2 commenced in Q2, with completion expected in Q3. The refinery's production in 2024 was 1.062 million mt, up 26.9% YoY. In 2025, Roasting Furnace No. 5 was put into operation after the completion of the maintenance of Roasting Furnace No. 1, and annual production is expected to increase further.

Looking ahead to June, overseas metallurgical-grade alumina production is expected to increase by 4.2% YoY, with the operating rate reaching 82.1%.

Primary Lead

In May 2025, the national primary lead production showed a slight increase, up 2.39% MoM and 14.66% YoY. The cumulative primary lead production from January to May 2025 increased by 8.41% YoY.

After completing maintenance in April, primary lead smelters experienced relatively concentrated production resumptions in May, including smelters in Central China, South China, and Southwest China, which all saw certain increases in production. Among them, smelters in South China saw significant increases in production, mainly due to the conclusion of environmental protection inspections and eased raw material shortages, enabling smelters to resume production as scheduled, resulting in a substantial increase in production volume. Although smelters in east China, north-west China, and south-west China entered routine maintenance or made short-term production adjustments during this period, the impact on production was limited and did not change the upward trend in primary lead production for the month.

Looking ahead to June, more primary lead smelters are expected to undergo maintenance, mainly concentrated in regions such as south-west China, east China, and north China. On the one hand, primary lead smelters typically enter a routine maintenance period from June to August each year, with some enterprises conducting maintenance as planned. Most of these enterprises are expected to halt equipment operations after mid-June, with a relatively significant reduction in production expected in late June. On the other hand, the price center of lead gradually moved lower in late May, and spot lead prices fell below 16,500 yuan/mt by month-end, dampening the production enthusiasm of smelters. Coupled with factors such as tightening lead concentrate supply and persistently high scrap battery prices, some enterprises made certain production adjustments. Overall, primary lead production in June is expected to decline by around 3% MoM.

Secondary Lead

In May 2025, the production of secondary crude lead plummeted, dropping 32.67% MoM and 12.69% YoY. The production of secondary refined lead also fell sharply, declining 36.39% MoM and 16.54% YoY.

In May, the end-use consumption of lead remained sluggish, with downstream battery producers showing weak enthusiasm for purchasing lead ingots, leaving no upward momentum for lead prices. On the raw material side of secondary lead, the supply of scrap lead-acid batteries was tight; the amount of scrap in the market was low, putting pressure on recyclers to purchase materials, and resulting in limited arrivals of raw materials at smelters. As the inventory of raw materials at enterprises declined, some enterprises raised their purchase prices to restock, with others following suit. This led to an increase in recyclers' reluctance to sell and a wait-and-see sentiment, further worsening arrivals at smelters. Amid high costs and continued raw material shortages, enterprises intended to jointly lower prices but found it even harder to close deals. With no pricing advantage on the sales side, difficult transactions, and little profits, both procurement and sales ends simultaneously squeezed the production enthusiasm of secondary lead smelters, leading to a sharp decline in production in May.

As June approaches, some smelters that underwent maintenance in the early stage are expected to resume production, and a few smelters have indicated plans to increase production. Therefore, the production of secondary lead may recover slightly on a MoM basis from May. It is worth noting that the short-term tight supply of raw materials is difficult to alleviate, and the impact of raw material procurement prices and profitability on production enthusiasm of smelters still needs to be considered in the future. If the market continues to slump, there may be more enterprises halting production for maintenance or enterprises postponing their production resumption plans.

Refined Zinc

In May 2025, SMM reported that China's refined zinc production decreased by 1% MoM and increased by approximately 2% YoY. From January to May, the cumulative production increased by over 0.5% YoY, falling below expectations. In May, domestic zinc alloy production experienced a slight MoM decline. Entering May, domestic smelter production decreased, driven by regular maintenance in major regions such as Henan, Anhui, Shaanxi, Guangxi, Hunan, and Qinghai, as well as unforeseen maintenance in Guangxi, Shanxi, and Qinghai that exceeded expectations. The increase was mainly attributed to the resumption of production after maintenance and production increase in regions such as Inner Mongolia, Hunan, Sichuan, Yunnan, and Guizhou.

SMM forecasts that domestic refined zinc production in June 2025 will increase by 7% MoM and over 8% YoY. It is expected that the cumulative production from January to June 2025 will increase by nearly 2% YoY. Overall, smelter production will increase significantly in June. In addition to the release of new capacity in Yunnan and Henan, production resumptions in Shaanxi, Henan, Anhui, Guangxi, and Shanxi, which underwent earlier maintenance, along with production increase in Inner Mongolia and Shaanxi, will contribute to the increase. The decrease will mainly stem from maintenance-related production controls in Yunnan and Hunan. Overall, production will increase significantly in June. Based on the production schedule of subsequent smelter maintenance, production is expected to remain high in July.

Refined Tin

According to SMM processed data based on market survey, in May 2025, China's refined tin production decreased by 2.37% MoM and 11.24% YoY. Due to the persistent tightening of the tin concentrates and scrap tin supply chains, which imposed constraints on capacity, the overall operating rate declined slightly.

Yunnan Production Area: Interplay of Raw Material Shortages and Cost Pressures

Tin ore imports from Myanmar have remained below the 5,000 mt warning line for several consecutive months. Additionally, although the Bisie tin mine in the DRC resumed production in April, the first batch of ore requires a 4-6 week transportation period and is expected to enter the smelting process in June-July. Therefore, the raw material shortage is unlikely to be alleviated in the short term. Treatment charges (TCs) for Yunnan's 40% grade tin concentrates remained at historically low levels, further squeezing smelting profits. Some enterprises entered seasonal maintenance or production cuts due to insufficient raw materials.

As of May 28, raw material inventories at Yunnan's smelters were generally below 30 days. Some enterprises faced inventory backlogs due to high-priced stockpiling in the earlier period, but weak downstream demand led to difficulties in shipping goods, resulting in sluggish transactions at spot premium quotes.

​​Jiangxi Production Area: Insufficient Scrap Tin Supply Intensifies the Risk of Capacity Exit​​

​​Jiangxi relies on a scrap tin recycling, but recycling volumes after the Chinese New Year only reached 70% of the annual average, with electronic scrap supply decreasing by 30% MoM. Policy uncertainties (such as those related to renewable resource policies) and trade frictions have hindered the circulation of scrap. Some suppliers have stockpiled scrap in anticipation of price increases, driving up the smelting costs of recycled tin. The decline in treatment charges, coupled with insufficient scrap, has led to a 15%-20% YoY increase in production costs for Jiangxi's smelters, with some capacity potentially exiting permanently.

​​Other Production Areas and Overall Supply-Demand Pattern​​

​​Inner Mongolia, Anhui, and Other Regions​​: In Inner Mongolia, production rebounded only slightly in May due to production issues at captive mines, but it has not yet returned to previous levels. Production areas such as Anhui have continued to experience operating rates below expectations due to shortages of scrap and tin concentrates.

Based on SMM estimates, refined tin production is expected to decrease by 4.58% MoM in June. Driving factors: Some smelters in Yunnan and Jiangxi plan to halt production for maintenance.

Refined Nickel

In May 2025, SMM's refined nickel production decreased by 3% MoM from April, increased by 38% YoY, and cumulative production from January to May up 31% YoY. The operating rate of domestic refined nickel enterprises reached 65%. In May, top-tier enterprises maintained relatively high operating rates and stable production, but other smelters faced limited profitability due to the decline in nickel prices, leading to a decrease in output and driving down the overall refined nickel production in May. In terms of prices, the spot price of refined nickel showed a slow downward trend in May, with an average price of 124,683 yuan/mt, a decrease of 1,012 yuan/mt from April. The average premium for Jinchuan nickel in May was 2,200 yuan/mt, down 300 yuan/mt MoM. Spot transactions in May were mainly driven by immediate demand, with enterprises showing low enthusiasm for stockpiling. The demand for refined nickel from alloy and special steel accounts for a relatively low proportion, making it difficult to reverse the nickel surplus situation. As a result, the upside room for nickel prices is limited.

It is expected that refined nickel production will decrease by 3% MoM in June. Due to the current high prices of raw materials for refined nickel and the downward trend in nickel prices, smelters are experiencing losses. As a result, some non-integrated smelters have chosen to cut production, leading to a further decline in refined nickel production in June.

NPI

In May 2025, the physical content of China's NPI production increased by approximately 2.94% MoM, while the metal content increased by approximately 1.33% MoM. Both the physical and metal contents of NPI production in China rose in May. The main reasons were the increase in port arrivals of nickel ore from the Philippines in May, which alleviated the low inventory levels of raw materials at smelters. Additionally, the production at a smelter in east China increased after the end of its maintenance period, and the production at a smelter in south China recovered after the end of its circuit maintenance, driving the growth in metal content for the month. From the perspective of integrated smelters, due to the still-high prices of externally purchased raw materials, there was a slight increase in high-grade NPI production at integrated 300-series stainless steel mills. Combined with the increase in 200-series crude stainless steel production, there was also a significant increase in low-grade NPI production at domestic integrated 200-series stainless steel mills. Overall, both the physical and metal contents of high-grade and low-grade NPI production in China increased MoM in May.

It is expected that the physical content of China's NPI production will decrease by approximately 4.59% MoM in June 2025, while the metal content will decrease by approximately 0.59% MoM. According to an SMM survey, a smelter in north China is expected to resume production in June, but the production increase during the initial ramp-up phase will be limited. The MoM decline in both physical and metal contents in June is mainly due to the continuous low prices of stainless steel and ongoing losses, leading to production cuts at some steel mills. Additionally, some integrated 200-series stainless steel mills are expected to enter maintenance periods, resulting in a temporary decline in low-grade NPI production. In summary, it is expected that domestic high-grade NPI production will increase while low-grade NPI production will decline in June, with a relatively limited impact on the total metal content.

Indonesian NPI

In May 2025, the metal content of Indonesian NPI production decreased by 1.4% MoM and increased by 15.89% YoY. In terms of supply, due to the low prices of NPI, NPI smelters were experiencing losses, leading some NPI producers to reduce their production in the month. Meanwhile, some NPI producers conducted production line maintenance in May, contributing to the overall decline in Indonesian NPI production in May. On the demand side, the downstream stainless steel industry entered the traditional off-season, coupled with stainless steel producers also facing losses, resulting in weak overall downstream demand. It is expected that the metal content of Indonesian NPI production will increase by 0.46% MoM and 17.88% YoY in June. Some NPI smelters have completed their maintenance, and it is anticipated that new nickel ore quotas will be issued in Indonesia in June, alleviating the tight supply of nickel ore and leading to an increase in Indonesian NPI production in June.

Nickel Sulphate

According to SMM data, in May 2025, SMM's nickel sulphate production is expected to reach approximately 25,100 mt in metal content, corresponding to about 114,300 mt in physical content, a decrease of approximately 2.97% MoM and 23.17% YoY.

On the demand side, in May, downstream precursor producers were in the stage of reducing finished product inventories, leading to weaker production schedules and consequently weaker demand for nickel sulphate. Supply side, affected by weak downstream demand, the actual production of nickel sulphate producers fell short of expectations.

Looking ahead to June, although orders from some downstream precursor producers have recovered, the overall market demand remains weak, and purchase willingness for nickel salts continues to be low. It is expected that in June, SMM's nickel sulphate production will rise to approximately 25,400 mt in metal content, with physical tonnes production expected to be 115,600 mt, an increase of approximately 1.11% MoM and a decrease of approximately 16.61% YoY.

Battery-grade manganese sulphate

In May 2025, high-purity manganese sulphate production registered a slight decline. On the supply side, some manganese salt plants suspended operations for maintenance in May, while others maintained lower operating rates, collectively reducing overall market supply. On the demand side, the ternary cathode precursor market showed subdued activity, with manganese sulphate procurement primarily driven by long-term contract fulfillment and minimal spot purchases. Meanwhile, limited demand from sodium-ion batteries and lithium manganese iron phosphate (LMFP) sectors failed to stimulate the market. Overall, the manganese sulphate market exhibited weak supply-demand dynamics throughout May. Looking ahead to June, a potential recovery in the downstream ternary cathode precursor market is anticipated to modestly boost manganese salt plants' production schedules.

Electrolytic manganese dioxide (EMD)

In May 2025, EMD production increased month-over-month (MoM) and year-over-year (YoY), primarily driven by steady growth in downstream primary battery demand and stable production performance. Both carbon-zinc and alkaline manganese dioxide output recorded slight increases. Although the lithium manganese oxide (LMO) market showed signs of recovery, the preference for Mn3O4 as a raw material failed to significantly boost LMO-grade EMD production. For June 2025, sparse new orders are expected in the primary battery sector and limited demand growth is projected for the LMO market, suggesting a likely downward trend in EMD production.

Mn3O4

In May 2025, Mn3O4 production rose slightly MoM while maintaining stable YoY growth. On the supply side, stable spot prices and moderate profit margins sustained strong production enthusiasm, with favorable operating conditions reported - particularly notable increases in battery-grade Mn3O4 output. However, the electronic-grade market is in the traditional off-season, with relatively small fluctuations in supply. It is expected that by June 2025, there will be no significant increase in demand for LMO in the market. Moreover, most enterprises have a certain level of raw material inventory, which may lead to a decrease in demand for battery-grade Mn3O4, resulting in a slight decline in overall planned production in the market.

High-carbon ferrochrome

According to SMM data, the production of high-carbon ferrochrome further increased in May 2025, rising 5.76% MoM but falling 5.38% YoY. Among them, Inner Mongolia accounted for 78.26% of the production, with a 1.27% MoM increase; south China, including Sichuan, Guizhou, and Guangxi, accounted for 17.14%, with a 24.69% MoM increase. In May, the procurement tender prices for high-carbon ferrochrome by mainstream stainless steel mills further increased by 500 yuan/mt (50% metal content), with Tsingshan Group's tender price reaching 8,095 yuan/mt (50% metal content). Influenced by this, the losses of ferrochrome producers have eased somewhat, and their production enthusiasm has increased. In addition, the spot price of ferrochrome remained high in April, leading to a certain degree of profit recovery for ferrochrome producers, boosting market confidence, and resulting in more production resumptions. Meanwhile, although the production of downstream stainless steel slightly decreased, it remained at a relatively high level overall. Coupled with the significant destocking of ferrochrome at steel mills, the demand for ferrochrome has driven producers to resume production. From the perspective of production costs, the spot price of chrome ore gradually decreased within the month, and with two rounds of coke price reductions, the smelting cost of ferrochrome gradually decreased. The increase in ferrochrome production in May mainly came from south China. Sichuan, Chongqing, Yunnan, and other regions are about to enter the rainy season, and lower electricity prices are beneficial for controlling production costs. Meanwhile, the low-priced chrome ore purchased earlier has gradually arrived at ports, and most producers have completed raw material stocking. Looking ahead to June 2025, the production of high-carbon ferrochrome is expected to continue to rise slightly. This is mainly because producers in northern China that halted production due to power restrictions and maintenance in May are expected to resume production, affecting the increase in ferrochrome output. In addition, regions such as Sichuan and Chongqing have officially entered the rainy season, and some ferrochrome producers have production resumption plans due to the advantage of lower electricity prices.

Stainless Steel

According to SMM survey data, China's stainless steel production in May 2025 declined slightly by 1.04% MoM but increased by 6.34% YoY. Production across different series showed significant divergence: the 200 series production decreased by 4.82% MoM; the 300 series production slightly declined by 0.05% MoM; and the 400 series production increased by 1.44% MoM.

Despite consecutive pullbacks of stainless steel production in April and May after it hit a record high in March, the overall supply remained at a high level. During May, stainless steel mills continued to face losses. As macro disturbances faded by mid-month, market focus returned to fundamentals, with downstream demand showing weakness and the overall market in the doldrums, intensifying competition among steel mills. However, the extent of production cuts was limited partly because favourable macro front drove improved spot transactions in early May.

In terms of the performance of different series, the 300 series production remained relatively stable, while the 200 series production declined significantly after previous big growth. Despite 300 series stainless steel mills still experiencing losses, as high-grade NPI prices hit bottom during the month, their production costs continued to decline, alleviating the extent of losses for steel mills. Meanwhile, the futures-spot arbitrage behavior triggered by fluctuations in the futures market pulled down the actual transaction price of 300 series stainless steel, with the transaction performance of low-priced cargo remaining moderate. In contrast, for the 200 series stainless steel, the concentrated production shift by steel mills in the early stage led to a surge in supply, but downstream demand did not show significant improvement, resulting in a severe imbalance between supply and demand in the market. Prices fell sharply, prompting steel mills to actively cut 200 series production.

Looking ahead to June, the stainless steel market is expected to officially enter the traditional consumption off-season. As macro disturbances ease temporarily, price movement will return to being dominated by supply and demand fundamentals. Previously impacted by the US tariff policy, stainless steel futures prices plummeted. Currently, the market continues to face a situation intertwined with supply surplus, weak demand, and pessimistic sentiment, with futures prices fluctuating at lows, thereby driving spot prices down to recent lows. Although some enterprises had already initiated production cuts in May, the industry's overall production remained at a historical high. Amid multiple pressures, including increased uncertainty in external demand, weak domestic demand, and insufficient market confidence, the profit margins of stainless steel enterprises were severely compressed. It is expected that more steel mills will implement production cuts and maintenance plans in June, and the industry's overall production is anticipated to decline further, thereby alleviating the current severe supply-demand imbalance.

Electrolytic Manganese Metal (EMM)

According to SMM data, China's EMM production in May 2025 increased by approximately 2% MoM and over 3% YoY. Despite production reductions due to shutdowns for maintenance at some EMM plants in Guizhou, production resumed at EMM plants in Hunan due to sufficient raw material supply, and production schedules at EMM plants in Guangxi increased due to a rise in long-term contract orders. Overall, the increased production in some regions offset the decreased production in others, and combined with the increase in the number of calendar days in May, the overall supply of EMM increased slightly.

Entering June, the overall operating rates of most manganese plants still did not exceed 70% of their capacity. Some shutdown EMM plants planned to resume production, but due to the fewer calendar days in June, the overall supply in the manganese market decreased slightly.

SiMn Alloy

According to SMM data, China's total SiMn alloy production in May 2025 decreased by over 6% MoM and over 20% YoY. The main reasons for the decline in SiMn production in May were that, despite maintaining higher operating rates in north China regions such as Inner Mongolia and Ningxia compared to south China due to cost advantages, the continuous decline in spot prices of SiMn led to sustained losses at SiMn plants. As a result, production cuts or shutdowns persisted at some plants, leading to an overall reduction in production.

As June arrives, the silicon-manganese (SiMn) market is entering the off-season for steel consumption, exacerbating the supply surplus of SiMn. In-plant inventory at SiMn plants continues to rise, and plans for silicon production cuts or suspensions persist. Additionally, with fewer calendar days in June, it is expected that SiMn production schedules will continue to decrease in the coming market.

Silicon Metal

According to SMM market communications, silicon metal production in May 2025 increased by 2.3% MoM but decreased by 24.6% YoY. From January to May 2025, cumulative silicon metal production decreased by 15.3% YoY.

In May, silicon metal production increased MoM, with variations across different production regions. Production increased in Sichuan, Ningxia, and Inner Mongolia, while most other regions, including Xinjiang, Yunnan, and Henan, experienced varying degrees of decline. Sichuan saw the largest increase in production due to new project ramp-ups and production resumptions at some facilities, with a MoM increase exceeding 12,000 mt. Although new projects were launched in Yunnan, production was still in the initial ramp-up phase, requiring time to reach full capacity. Coupled with production cuts or suspensions at older facilities, monthly production decreased MoM.

The silicon metal market has been hit by falling prices, leading to cash flow losses for producers. Production resumptions in south-west China are significantly lower than the same period in previous years. Coupled with weak operating rates at small and medium-sized silicon enterprises in northern China, the YoY decline in monthly silicon metal production has widened in recent months. In June, production schedules are expected to increase at silicon enterprises in major production regions such as Xinjiang, Yunnan, and Sichuan. Xinjiang will see increased production due to capacity ramp-ups at top-tier enterprises, while Sichuan and Yunnan will benefit from new project ramp-ups and contributions from a small number of silicon enterprises. Overall, it is expected that silicon metal production will increase by more than 30,000 mt MoM in June.

Polysilicon

In May, actual polysilicon production decreased slightly MoM compared to April, with a decline of approximately 0.2%. Despite some enterprises not reducing production as much as expected and some polysilicon enterprises with good sales increasing production, overall production decreased slightly MoM amid production cuts at some enterprises.

In June, production is expected to increase slightly due to the resumption of operations at some bases in western China. Overseas polysilicon production is estimated at around 5,100 mt, with little fluctuation in production from April to May. Production is expected to remain relatively stable in June, with the commissioning of 100,000 mt of polysilicon capacity in Oman likely to be delayed.

PV Modules

In May, many module enterprises significantly cut production, with output decreasing by approximately 12.7% MoM. The main reason for the decline in actual production was a sharp drop in domestic distributed PV orders starting from mid-May. Module plants' price reductions failed to stimulate order growth, prompting them to adopt a sales-based production strategy and cut production to match end-use demand. In June, demand for distributed PV is expected to decrease significantly, while industrial and commercial PV will provide some support. Centralized PV module producers will remain cautious. Therefore, it is expected that production will continue to decline MoM in June.

Solar Cells

In May, solar cell production decreased by 8.13% MoM, with Topcon cell production decreasing by more than 8%. Solar cell production remained under pressure throughout May, with demand weakening rapidly after the installation rush subsided, leading to continuous inventory buildup at solar cell plants. In late May, market differentiation emerged in end-use demand, affecting producers' production schedules for June. It is expected that the proportion of large-size solar cell production will increase.

PV Film

In May, the total production schedule for the PV film industry decreased by 15.13% MoM. The main reason was the end of the installation rush, leading to a continuous decline in module production schedules on the demand side, which drove down the demand for PV film and reduced film production. With the slowdown in downstream module demand, it is expected that PV film production will continue to decline in June.

PV-Grade EVA

In May, the production schedule for PV-grade EVA decreased by 37.74% MoM. The first reason was the end of installation rush ahead of April 30 and May 31 policy deadlines, leading to weak demand and a decline in PV-grade EVA production. The second reason was maintenance and production switches at some petrochemical enterprises. According to SMM, demand is expected to continue to decline in June, with some petrochemical enterprises still planning production switches or maintenance. It is expected that PV-grade EVA production will continue to decline in June.

PV Glass

In May, the monthly production of domestic PV glass increased, showing a 4.9% MoM growth from April. The number of production days for domestic PV glass increased by one day in May. Meanwhile, the production of kilns that started production before May, especially those that started in Q1, basically ramped up to full capacity in May, leading to an increase in supply. In addition, although the demand at the module end slightly weakened, glass profits remained considerable this month, so glass companies had limited willingness to halt production. However, it is estimated that domestic supply will decline in the long term due to the weakening market conditions. On the domestic supply side in June, despite a one-day reduction in production days, PV glass production is expected to continue rising due to the further release of production from ignited furnaces. It is estimated that the operating rate will increase by 0.68% MoM from May.

DMC

In May, domestic silicone DMC production increased by 6.48% MoM from April but decreased by 11.33% YoY. The domestic silicone market remained relatively weak in May, with a significant decline in DMC prices. Under the downward trend of the market, the scale of production cuts by leading monomer enterprises began to increase. However, as the production cut cycles of most monomer enterprises ended earlier, they gradually resumed operations in May. As a result, the overall operating rate of the silicone market showed a mix of increases and decreases, with a comprehensive increase in production. Regarding future operations, although some monomer enterprises still plan to conduct maintenance in June, the overall production reduction efforts will decrease. Silicone production in the industry is expected to increase by 11.41% MoM from May in June.

Magnesium Ingot

According to SMM data, China's primary magnesium production increased by 8.33% MoM in May 2025.

In May, domestic magnesium ingot producers experienced varying degrees of production increases and decreases. Overall, the national magnesium ingot production increased MoM. The increase in production was mainly due to the following reasons: Affected by the continuous rise in magnesium ingot prices in March and April, the profit margins of magnesium ingot smelters effectively improved. Magnesium ingot smelters that had previously halted production due to cost losses gradually resumed magnesium ingot production from late April to early May, leading to an increase in magnesium ingot production in May. The decrease in magnesium ingot production this month was mainly due to the following reasons: In May, magnesium ingot production was mainly in Xinjiang, where two Xinjiang magnesium ingot smelters conducted normal maintenance, resulting in a 5.60% decrease in production MoM. In addition, magnesium ingot smelters in provinces such as Shaanxi and Heilongjiang also reduced production or conducted maintenance due to insufficient coal gas supply and other reasons.

Currently, several magnesium ingot smelters in the main production areas have reported production resumption plans for June, but the specific resumption times have not been determined. SMM will continue to monitor the situation. Overall, the production of domestic magnesium ingot smelters may increase in June, and it is expected that the domestic raw magnesium production in May may increase slightly MoM.

Magnesium Alloy

According to SMM data, China's magnesium alloy production increased by 7.19% MoM in May 2025, and the operating rate of magnesium alloy enterprises continued to rise significantly.

In May, the production of domestic magnesium alloy manufacturers continued to increase. The growth in production was mainly due to the following reasons: Firstly, influenced by the prominent cost-effectiveness of magnesium alloy, coupled with the leading enterprises taking the lead in promotion, die-casting enterprises gradually switched from aluminum to magnesium. The magnesium alloy market saw an increase in orders but with relatively small order volumes. However, the overall market demand for magnesium alloy showed a trend of slight increase. Secondly, because May is the peak season for downstream die-casting plants, magnesium alloy orders increased significantly due to the peak season effect. According to magnesium alloy manufacturers, the new capacity of magnesium alloy enterprises will be put into operation successively in June, and it is expected that the magnesium alloy production will increase slightly in June.

Magnesium Powder

According to SMM data, China's magnesium powder production decreased by 9.65% MoM in May 2025. Due to the overall weak performance of domestic market demand, coupled with the poor performance of overseas steel mills' demand, magnesium powder exports continued to decline for several consecutive months, leading to a decrease in the overall order volumes of magnesium powder manufacturers. In May, some magnesium powder enterprises reduced their operating rates, resulting in a significant drop in domestic magnesium powder production in May. With the end of the peak season effect, the demand for magnesium powder is expected to continue to deteriorate, and it is expected that magnesium powder production will continue to decline in June.

Titanium Dioxide

According to SMM data, China's titanium dioxide production in May 2025 decreased by 4.89% MoM.

In May, affected by lower-than-expected overall demand and obstacles in some foreign trade exports, enterprises faced significant shipping pressure, leading to a gradual increase in inventories for some manufacturers. Additionally, with high raw material costs, enterprises faced substantial cost pressure, resulting in widespread maintenance activities among titanium dioxide smelters in May, which is expected to lead to a downward adjustment in titanium dioxide production in May.

Affected by the continuous decline in titanium dioxide prices, titanium dioxide enterprises incurred losses, with anatase titanium dioxide experiencing particularly severe losses. The industry's average titanium dioxide loss was nearly 1,000 yuan. With the arrival of the off-season for titanium dioxide, the inventory pressure and cost pressure on titanium dioxide are significant. It is expected that titanium dioxide production will continue to decline in the subsequent period.

Titanium Sponge

According to SMM data, China's titanium sponge production in May 2025 remained relatively stable MoM.

China's titanium sponge production in March and April was relatively stable, with overall inventory levels maintained at a scale equivalent to 2 to 3 weeks of production, showing a gradual downward trend. In May, titanium sponge production increased slightly. Currently, spot supply of titanium sponge is tight. The previous price adjustment strategies of titanium sponge enterprises have been gradually accepted by the downstream market and consolidated under the influence of downstream manufacturers' pre-holiday stockpiling demand. The market demand for Grade 0 and Grade 1 titanium sponge is relatively stable. It is expected that titanium sponge production will maintain a slight increase in June.

Light Rare Earths

In May 2025, China's production of Pr-Nd oxide and Pr-Nd alloy both decreased MoM. The production cuts of Pr-Nd oxide were mainly concentrated in Jiangsu, Jiangxi, Shandong, and Sichuan. On the one hand, due to the continuous sluggish prices of rare earth ores, suppliers were generally reluctant to sell, leading to a sharp decline in market circulation and exacerbating the raw material shortage for enterprises relying on imported ores. On the other hand, the supply of NdFeB scrap decreased sharply due to the shrinking orders at downstream magnetic material enterprises, directly impacting the scrap recycling industry clusters, causing scrap recycling enterprises to face difficulties due to raw material shortages and losses.

Meanwhile, the reduction in Pr-Nd alloy production was concentrated in Sichuan and Inner Mongolia. Affected by the export control policies on medium-heavy rare earths, magnetic material enterprises, especially small and medium-sized enterprises, faced difficulties in obtaining export licenses, which in turn affected the demand for Pr-Nd alloy from downstream enterprises, leading some metal enterprises in certain regions to halt production and reduce output.

Medium-heavy rare earth

In May 2025, China's production of medium-heavy rare earth oxides declined significantly MoM. This phenomenon was mainly attributed to the simultaneous shortage of ion-adsorption ore from Southeast Asia and NdFeB scrap, directly affecting the operating rates of separation plants and scrap recycling enterprises. Firstly, due to the persistent low prices of ion-adsorption ore in regions such as Myanmar, suppliers were reluctant to sell, resulting in a significant reduction in market circulation. Meanwhile, the export control policies suppressed the demand for medium-heavy rare earth raw materials from downstream enterprises, and the delay in issuing mining quotas led separation plants to be more cautious in purchasing ion-adsorption ore, unwilling to accept high-priced ore.

Secondly, the export control policies made it difficult for magnetic material enterprises, especially small and medium-sized enterprises, to obtain export licenses, forcing them to cut production, thereby reducing the generation of scrap. In scrap recycling industrial clusters such as Jiangsu and Shandong, due to insufficient raw materials, the production of rare earth oxides declined significantly.

NdFeB

In May 2025, domestic NdFeB magnetic material production declined by approximately 4% MoM. According to an SMM survey, magnetic material enterprises are currently affected by export controls and the industry's "off-season," with no improvement in order conditions, leading to a decrease in magnetic material production MoM. The export control policies have shown a tightening trend, and no new export license approvals were issued in May. Export orders continued to decline compared to April, forcing products originally intended for export to be diverted to domestic sales, exacerbating cut-throat competition in the market and further compressing the profit margins of magnetic material enterprises. Affected by this, the operating rates of enterprises have declined, leading to a reduction in production in May.

Looking ahead to June, the recovery of end-use demand will take some time, coupled with the current sluggish rare earth market conditions. Given the tightening of export control policies and the difficulty in improving export conditions, it is expected that the production of NdFeB magnetic materials will remain flat or decrease slightly in June.

Molybdenum concentrate

According to SMM data, China's molybdenum concentrate production decreased slightly MoM in May.

In May, there were both increases and decreases in domestic molybdenum concentrate mine production. Production at mainstream mines remained relatively stable, with some large enterprises experiencing a MoM increase in molybdenum concentrate production. Some small mines in south-west China reduced their mining output due to declining ore grades. The expansion progress of mines in north-east China was slower than expected, with no MoM increase in production. Molybdenum concentrate production decreased slightly in May, while downstream demand for export rush and military applications improved. The tender volume and prices for domestic ferromolybdenum and other steel mills increased simultaneously, driving up the demand for molybdenum concentrate. The market spot supply became tight, and fundamental positive news drove up molybdenum concentrate prices in May. Entering June, some mines in north-east China are expected to undergo maintenance, and no expansion plans have been heard from enterprises. SMM expects that domestic molybdenum concentrate production in June will mainly decrease slightly MoM.

Ferromolybdenum

According to SMM statistics, China's ferromolybdenum production increased slightly MoM in May.

In the ferromolybdenum market, prices have risen significantly since May. However, due to high production costs and strong desire of steel enterprises to push for lower prices, smelters still face significant pressure, and the risk of losses has not yet been alleviated. Ferromolybdenum producers have not yet achieved profitability, with some smelters only slightly increasing their operating rates. With the gradual recovery of downstream demand, it is expected that ferromolybdenum production will continue to increase slightly MoM in May.

Ammonium paratungstate

According to SMM data, China's ammonium paratungstate (APT) production decreased by approximately 9.1% MoM in May.

In May, the tungsten market generally showed weak supply and demand. The reduction in mine supply has led to a significant increase in raw material prices, which in turn has driven up APT prices. Meanwhile, the order demand from downstream enterprises in the tungsten industry has not shown significant improvement, failing to meet the expected incremental growth. Their acceptance of high-priced APT is weak, and downstream enterprises have adopted a just-in-time procurement strategy. As tungsten concentrate prices fluctuated at highs throughout May, and downstream procurement demand remained weak, the phenomenon of losses in APT production persisted. Some APT producers suspended production in May and transitioned to toll processing, resulting in a decline in production.

Currently, some APT manufacturers have reported production resumption plans, but the specific resumption time remains undetermined. SMM will continue to monitor the situation. Overall, domestic APT smelter production in June is expected to increase.

Silver

In May 2025, silver production increased by 3.81% MoM. This was mainly due to the resumption of production at smelters in north-west China and east China following maintenance. However, another smelter in east China that halted production in May has not yet clarified when it will resume. In addition, a lead-zinc smelter in south China affected precious and rare metal production due to maintenance, while a copper smelter in the same region experienced a slight decrease in silver production due to lower gold and silver content in its raw materials.

Looking ahead to June, it is expected that the south China smelter undergoing maintenance in May will gradually resume normal production. However, some lead smelters plan to conduct routine maintenance in mid-to-late June, which may lead to a MoM decline in silver production. Considering these factors, the supply side of spot silver ingots in June will present a situation where maintenance and resumption coexist, with production likely to remain generally flat or increase slightly compared to May.

Silver Nitrate

In May 2025, silver nitrate production decreased by 17% MoM, with the capacity utilisation rate of multiple enterprises falling short of expectations. Although downstream demand for silver nitrate was moderate in early May, from mid-May onwards, with the end of the installation boom in the domestic PV market, multiple silver nitrate enterprises reported weakened consumer demand and poor order performance, leading to a decline in silver nitrate production. As June begins, the pessimistic outlook for orders in the PV sector persists, with no signs of recovery for silver nitrate producers in the short term. Some companies have indicated that the off-season has arrived, and their operating rates will remain below 50% in the short term. It is expected that silver nitrate production in June may continue to decline.

Antimony Ingot

According to SMM's assessment, China's antimony ingot (including antimony ingot, crude antimony conversion, antimony cathode, etc.) production in May 2025 increased by approximately 4.2% MoM compared to the previous month. Specifically, among the 33 surveyed companies assessed by SMM, 11 producers halted production, an increase of 3 from the previous month; 19 producers experienced production cuts, a decrease of 2 from the previous month; and 3 producers maintained relatively normal production levels, a decrease of 1 from the previous month. In terms of antimony ingot production, after a significant decline in April, antimony production slightly increased again in May. Many market participants consider this a normal phenomenon, as the recent volatile market prices have also led to greater elasticity in market production. Currently, many overseas ore sources are still unable to enter the domestic market. Market participants indicate that the overall domestic raw material supply remains tight. However, with the correction of antimony market prices, the willingness of antimony ore suppliers to ship has gradually increased. Nevertheless, as many producers announced production halts and cuts from late May to early June, market participants expect that China's national antimony ingot production in June 2025 is likely to experience a significant decline compared to May.

Note: Since May 2022, SMM has been publishing its assessed production of antimony ingot (including antimony ingot, crude antimony conversion, antimony cathode, etc.) nationwide. Benefiting from SMM's high coverage rate in the antimony industry, the total number of surveyed antimony ingot producers by SMM is 33, distributed across 8 provinces nationwide, with a total sample capacity exceeding 20,000 mt and a total capacity coverage rate of over 99%.

Sodium Pyroantimonate

According to SMM's assessment, China's production of first-grade sodium pyroantimonate in May 2025 is expected to decrease by approximately 21.21% MoM compared to the previous month. After a significant rebound in March, production remained basically stable in April, but unexpectedly declined again this month, catching many market participants off guard. However, many industry insiders viewed this as normal. Since late February, antimony prices continued to rise, leading to increased orders from glass manufacturers. The production increase in March for many producers was also linked to additional order intake, a trend that extended into April. However, with the sharp decline in antimony market prices in April, end-user orders entered a stagnation phase, subsequently affecting the procurement demand for sodium pyroantimonate. Under these circumstances, production adjustments by manufacturers unable to secure orders were considered reasonable. Detailed data shows that among SMM's 11 surveyed producers in May, 2 were either idled or in trial operation, 3 sodium pyroantimonate producers reported production growth, while 3 others experienced significant output declines—with one even seeing a drop of more than 50%. Consequently, overall production declined noticeably. Market participants expect the national sodium pyroantimonate output in June to show little likelihood of further decline compared to May, with flat or slightly higher production being more probable.

Note: Since July 2023, SMM has published its assessed national sodium pyroantimonate production. Benefiting from SMM's high coverage rate in the antimony industry, the survey covers 11 sodium pyroantimonate producers across 5 provinces, with total sample capacity exceeding 75,000 mt and a capacity coverage rate as high as 99%.

Refined Bismuth

According to SMM's assessment, China's refined bismuth production in May 2025 dropped sharply by around 16.8% MoM from April. The sudden significant decline after a rebound and overall stabilization surprised many market participants. Nevertheless, some industry sources noted that tight raw material supply has led to stagnant or sharply reduced output. Recent competition for bismuth raw materials in the market, often transacted at high prices, indicates supply constraints have already disrupted normal operations for many producers. From the production situation of manufacturers, some manufacturers are still in the process of equipment maintenance, and many manufacturers are showing a downward trend in production. As a result, the overall domestic production has decreased significantly compared to April. Looking at the detailed data, among the 24 survey respondents of SMM, almost no manufacturers saw a significant increase in production in May, but five manufacturers experienced a significant decline in production, while the production of the remaining manufacturers remained relatively small in change. Many market participants expect that the tight supply of raw materials for bismuth manufacturers nationwide will be difficult to alleviate in June, and there is a high likelihood that production will continue to be affected. It is likely that refined bismuth production will remain stable or continue to decline slightly, and there is also a possibility of another significant drop in production.

Note: SMM has published its national refined bismuth production assessment since October 2022. Benefiting from SMM's high coverage rate of the bismuth industry, the survey covers 24 refined bismuth producers across 8 provinces, with total sampled capacity exceeding 50,000 mt and capacity coverage rate reaching over 99%.

Lithium Carbonate

In May 2025, SMM's total lithium carbonate production decreased 2% MoM but increased 15% YoY. Lithium carbonate prices plummeted sharply in May, with the monthly average price falling by over 10% MoM. Some non-integrated lithium chemical plants reduced or halted production due to cost pressures, coupled with maintenance at certain facilities, resulting in a slight decline in May's total lithium carbonate production, though the production remained high.

By raw material type, lithium carbonate derived from spodumene decreased 4% MoM in May. Although output reductions occurred at some lithium chemical plants due to cost pressures or maintenance, stable production from integrated enterprises provided strong support, limiting the decline in spodumene-derived lithium carbonate output. Lithium carbonate derived from lepidolite showed a minor increase of 2% MoM, driven by continuous production ramp-ups at leading lithium chemical plants. Salt lake-derived lithium carbonate output rose 3% MoM as warmer temperatures in salt lake regions boosted production. Meanwhile, recycling segment output decreased significantly by 16% MoM, primarily due to severe losses at lithium chemical recycling plants caused by scrap/black mass prices holding relatively firm despite plummeting lithium carbonate prices.

Lithium Hydroxide

SMM data shows May lithium hydroxide production remained relatively stable MoM but decreased over 20% YoY. By raw material classification, most smelting-end producers maintained stable production. However, against the backdrop of continuously falling lithium carbonate prices, some enterprises adjusted their product structure of lithium carbonate and lithium hydroxide. In the causticisation segment, after several months of capacity ramp-up, the production and quality of some enterprises have stabilised, contributing a certain increment to the overall output. This has led to a MoM increase of approximately 30% in causticisation segment production, although it still decreased by 22% YoY.

Looking ahead to June, some smelting enterprises are expected to halt production for technological transformation, but the output loss will be offset by ramp-up of new production lines at some enterprises. The overall production is expected to remain basically flat MoM, with a decrease of approximately 25% YoY.

Cobalt Sulphate

In May 2025, cobalt sulphate production decreased by 13% MoM. Recently, cobalt sulphate prices have declined, and the economic viability of cobalt sulphate production has also decreased, leading to a slight drop in the capacity utilisation rate of smelter enterprises. Consequently, cobalt sulphate production decreased MoM in the month.

Entering June, with cobalt intermediate product prices remaining high, the economic viability of cobalt sulphate production is relatively low. It is expected that the output of cobalt sulphate from ore will further decline. However, with the growth in the recycling segment, the overall cobalt sulphate output is expected to change relatively little. It is anticipated that cobalt sulphate output will decrease by approximately 1% MoM in June.

Co3O4

In May 2025, Co3O4 production increased both MoM and YoY. In terms of supply, despite the overall downward trend in spot prices of Co3O4 in May, they remained at a relatively high level compared to before, with a relatively optimistic profit margin. The operating rates of some enterprises increased, and production enthusiasm was high, driving a slight increase in market supply. From the demand side, LCO enterprises maintained a wait-and-see attitude, focusing on just-in-time procurement and fulfilling existing orders, with relatively stable demand. It is expected that by June, the issue of tight raw material supply will remain difficult to resolve. Co3O4 enterprises will adopt a more cautious approach to production scheduling, with some enterprises potentially experiencing significant production cuts. Therefore, the overall market supply is expected to decline.

Ternary Cathode Precursor

In May 2025, SMM's ternary cathode precursor production decreased by 3.99% MoM and increased by 4.53% YoY. In terms of series composition, 5-series ternary cathode precursors accounted for 19%, 6-series accounted for 42%, and 8-series accounted for 28%. 6-series products, with their significant cost advantages, have gained more favour amid the ongoing intensification of price wars in the current automotive market. Their market share has continued to climb, encroaching on the shares of 5-series and 8-series products. In the NEV market, domestic vehicle sales fell short of expectations, with an overall weak performance. The overseas market also showed signs of weakness. In the consumer market, the end-use demand for 3C and small power products was moderate. However, influenced by the concentrated release of orders in the previous two months, the precursor sector is currently in a destocking phase. Although orders remained stable in May, there is still uncertainty regarding the demand trend in June. Overall, the performance of the ternary cathode precursor market in May was poor.

Looking ahead to June, the destocking trend in the consumer market is expected to continue, with orders potentially declining. However, in the NEV market, some new car models scheduled for launch may drive producers to stockpile in advance, which is expected to boost the production schedules of some precursor enterprises. Based on a comprehensive assessment, it is anticipated that the production of ternary cathode precursors will increase by 1.63% MoM in June.

Ternary Cathode Material

In May 2025, SMM ternary cathode material production increased by 3.52% MoM and 23.91% YoY. The overall operating rate of the industry reached 43% in the month, further rebounding from April. In terms of series composition, 5-series ternary cathode material accounted for 16%, 6-series accounted for 35%, 8-series accounted for 33%, and 9-series accounted for 14% in May. The market share of 5-series ternary cathode material significantly decreased due to rising costs and lower-than-expected sales of some traditional car models. Leveraging its dual advantages in cost and performance, the share of 6-series material further increased, squeezing the market space of 8-series material. The market share of 9-series material rose due to an increase in overseas orders. In the NEV market, the overall performance of end-user auto sales was mediocre. Coupled with the continuous decline in lithium carbonate prices, the overall sentiment towards stockpiling in the market has become more cautious. In the consumer market, the end-use demand for 3C and small power products performed well, and the capacity utilisation rate of top-tier enterprises in the consumer cathode material sector remained at a high level.

Looking ahead to June, the market maintains a bearish outlook on raw material prices, with production scheduling intentions becoming more conservative. Additionally, the peak stockpiling period before the "618" shopping festival in the consumer market has ended, and the market has entered a destocking phase. It is expected that the production of ternary cathode material will decline by 1.17% MoM in June.

Iron Phosphate

In May, the domestic iron phosphate market remained stable, with production increasing by 2% MoM and surging by 38% YoY. On the supply side, the resumption of production by integrated LFP enterprises drove an increase in the in-house production of iron phosphate. Enterprises with raw material cost advantages secured more orders due to stable production lines. Production at enterprises with stable prices remained largely unchanged from the previous month. On the demand side, downstream demand for LFP materials rebounded compared to April. On the cost side, prices of industrial-grade MAP and phosphoric acid remained stable, while ferrous sulphate prices rose, keeping iron phosphate production costs at a high level.

As June approaches, the period for pushing for mid-year targets has arrived. To capture market share, enterprises will boost sales through discounts and promotions. Meanwhile, new capacities will gradually come on stream and undergo downstream validation. It is expected that iron phosphate production will increase by 4% MoM and 59% YoY in June, potentially intensifying market competition further.

LFP

In May 2025, China's LFP production increased by approximately 6.7% MoM and 43% YoY, with an overall operating rate of around 56% in the industry. In the ESS sector, there were concerns about potential decline in overseas ESS orders in early May due to the impact of the US's reciprocal tariff policy, leading to a slowdown in the production pace of some material factories. However, after the negotiations between China and the US concluded in mid-May, the reciprocal tariff will be significantly reduced from 125% to 10% over the next 90 days. This tariff adjustment prompted downstream battery cell manufacturers to accelerate production to rush exports, thereby driving the recovery of orders for LFP material factories and leading to a more active production environment. The overall production schedules of NEV-oriented LFP material producers declined in May. Auto sales maintained a good level at the beginning of the month, but have been sluggish since mid-month. Downstream battery cell manufacturers have gradually reduced their orders for LFP cathode materials, leading some material producers to eventually experience production and delivery levels that fell short of expectations.

Looking ahead to June, the LFP market will face demand differentiation. Affected by the traditional off-season for auto sales, it will be difficult for demand in the NEV market to achieve breakthroughs, and production scheduling expectations for LFP materials and battery cells are expected to decline. However, in the ESS market, following tariff reductions, downstream battery cell manufacturers will continue to actively produce and rush to export, with demand remaining robust and growing. Overall, the increase in LFP material production scheduling for June is expected to be limited.

Lithium Cobalt Oxide (LCO)

In May 2025, LCO production increased by 6% MoM. On the demand side, benefiting from the stimulus of this year's national subsidy policies, the overall performance of the consumer end-use market improved in H1, with downstream demand remaining robust and procurement demand for LCO continuing to be strong. On the supply side, LCO prices are mainly influenced by the costs of Co3O4 and lithium carbonate. The oversupply situation in the lithium carbonate market is expected to persist for a relatively long time. In the cobalt market, there is widespread anticipation regarding the finalization of mining policies in the DRC by the end of June, with the overall market sentiment remaining relatively mediocre. Against this backdrop, LCO producers have adhered to a sales-based production strategy, maintaining a relatively conservative inventory level.

In June, downstream consumer market demand is expected to remain good, with leading battery cell enterprises' procurement volumes of LCO expected to remain at a high level. Supported by this, it is expected that LCO enterprises' production scheduling plans will be basically flat compared to May, with a possible slight increase of approximately 1% MoM.

Lithium Manganese Oxide (LMO)

In May 2025, LMO production increased both MoM and YoY. From the supply side, the production plans of most LMO enterprises have been relatively stable. Although some small enterprises lacking cost advantages have reduced production, the operating rates of major enterprises have increased, leading to a rise in market concentration and an overall upward trend in supply. Demand side, many battery plants believe that the price of lithium manganate oxide (LMO) has already reached a low point, leading to an increase in procurement activities and boosting market activity.

Looking ahead to June, the market will primarily focus on fulfilling existing orders, with the number of inquiries likely to decrease. It is expected that LMO production will experience a slight MoM decline, but the YoY growth rate is anticipated to remain stable.

*Survey Methodology

SMM's production survey is conducted by professional analysts through phone calls, field surveys, and other methods, regularly tracking monthly production of Chinese metal producers and issuing China's metal production reports.

During the survey process, the basic coverage ratio of samples is ensured and continuously expanded. At the same time, factors such as capacity scale, geographical distribution, and enterprise nature are considered to reasonably select and allocate samples, ensuring the representativeness of each sub-item data.

At the end of each month, the reports are released through official channels such as the SMM official website (www.smm.cn), WeChat subscription account, and mobile site (m.smm.cn).