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

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 metals market.

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

Copper Cathode

In June, SMM's China copper cathode production was down 3,400 mt MoM, a decrease of 0.3%, and up 12.93% YoY. The cumulative production from January to June increased by 674,700 mt, an increase of 11.40% YoY.

The June copper cathode production ended four consecutive months of growth and saw a slight decline, mainly due to the following reasons: 1. Although our statistics show that only one smelter had maintenance plans in June, the number of enterprises with decreased capacity utilization rates significantly increased; nearly 40% of the companies in our survey sample reduced production to varying degrees, double the amount in May; this can also be reflected in the decline of port copper concentrates inventory, which, according to our statistics, dropped from 795,900 mt at the end of May to 623,500 mt by the end of June. 2. A smelter in North China saw a significant drop in production due to environmental protection inspections. 3. The volume of imported copper anodes decreased in June, which to some extent also led to a reduction in production for some enterprises. However, it is worth noting that the price of sulphuric acid has continued to rise recently and is expected to keep rising in July; the increase in the price of sulphuric acid can effectively offset losses from copper smelting business.

In summary, the sample operating rate of the copper cathode industry in June was 85.76%, down 3.06 percentage points MoM (the main reason for the decline in the operating rate was the inclusion of a newly commissioned smelter); among them, the operating rate of large smelters was 87.52%, down 5.21 percentage points MoM, the operating rate of medium-sized smelters was 84.87%, up 0.19 percentage points MoM, and the operating rate of small smelters was 69.37%, up 6.48 percentage points MoM. The operating rate of smelters using copper concentrates was 89.1%, down 4.2 percentage points MoM. The operating rate of smelters not using copper concentrates (using copper scrap or copper anode) was 69.1%, up 0.2 percentage points MoM.

Entering July, according to our statistics, only one smelter has maintenance plan, and smelters that previously suspended production due to environmental protection inspections will resume normal production. Newly commissioned smelters in east China will ramp up production. The market concern about large-scale production cuts by enterprises due to losses did not materialize. Therefore, we believe that the domestic copper cathode production will further climb in July.

Based on the production schedules of various smelters, SMM estimates that domestic copper cathode production in July will increase by 15,500 mt MoM, with a growth rate of 1.37%, and increase by 122,200 mt YoY, with a growth rate of 11.88%. The cumulative production from January to July will increase by 796,900 mt YoY, with a growth rate of 11.47%. The sample operating rate of the copper cathode industry in July was 86.93%, up 1.18 percentage points MoM. Among them, the operating rate of large smelters was 89.41%, up 1.89 percentage points MoM; the operating rate of medium-sized smelters was 83.73%, down 1.13 percentage points MoM; and the operating rate of small smelters was 71.51%, up 2.14 percentage points MoM. The operating rate of smelters using copper concentrates was 90.5%, up 1.4 percentage points MoM; the operating rate of smelters not using copper concentrates (using copper scrap or copper anode) was 69.0%, down 0.1 percentage points MoM. We expect production to continue to rise in August, as there are still relatively few smelters with maintenance plans, and the capacity utilization rate of newly commissioned smelters will continue to increase.

Aluminum

According to SMM statistics, domestic aluminum production in June 2025 (30 days) increased by 1.57% YoY and decreased by 3.23% MoM. The operating capacity of domestic aluminum in June saw a slight MoM change. SMM learned that the phase II replacement project of an aluminum smelter in Shandong, which will be relocated to Yunnan, has commended. The plant in Shandong is required to shut down corresponding capacity for the replacement project and pass checks before being allowed to commission pots at its new plant in Yunnan. In June, the proportion of liquid aluminum at domestic aluminum smelters continued to rise, up 0.1 percentage points MoM to 75.8%. The increase was smaller than expectations at the start of the month, mainly due to high alloy inventory at downstream facilities and increased casting ingot production at some smelters. The proportion of liquid aluminum is expected to pull back in July. Based on SMM's data on proportion of liquid aluminum, domestic aluminum casting ingot production in June decreased 12.77% YoY to around 872,500 mt.

Capacity changes: As of month-end June, SMM statistics showed China's existing aluminum capacity at approximately 45.69 million mt (SMM adjusted the figure in late April by eliminating double calculations after taking into account capacity replacement and old plant dismantling). Operating capacity stood at around 43.83 million mt. The operating rate edged down MoM due to capacity replacement programs. SMM learned that the Shandong-to-Yunnan replacement project required the old smelter to complete production cuts and pass inspection before new pots could be started at the new facility. SMM will continue tracking aluminum capacity changes.

Production forecast: In July 2025, domestic aluminum operating capacity will maintain high levels. Yunnan's second batch of replacement projects will commence operation, boosting the industry operating rate. No progress has been made in other projects. Weakening end-use demand and significant inventory buildup of intermediate alloy products, coupled with production cut news from Qinghai and central China, may force upstream smelters to increase casting ingot output, potentially pulling the proportion of liquid aluminum back to around 74%. Future attention should focus on proportion of liquid aluminum trends, alloy product inventory and demand.

Alumina

SMM data shows China's metallurgical-grade alumina production in June 2025 (30 days) decreased 0.19% MoM but increased 6.1% YoY. By month-end June, China's existing metallurgical-grade alumina capacity reached approximately 110.82 million mt, with operating capacity up 3.14% MoM and operating rate at 79.7%.

With alumina prices rebounding earlier, the June monthly average price maintained highs. Refineries kept operating rates elevated, and previously idled capacity gradually resumed, leading to a notable MoM rebound in domestic alumina operating capacity.

By region, in June, alumina capacity in south China that was previously under maintenance gradually resumed, with operating capacity rebounding by nearly 2 million mt. In the north, alumina operating capacity saw both increases and decreases, but overall, operating capacity increased by approximately 700,000 mt.

Next month's forecast: Entering July, due to a short-term increase in demand for delivery brands, there are signs of spot alumina prices stopping the decline. The subsequent trend in alumina prices will require continuous monitoring of the circulation of spot alumina supplies. If prices continue to fall, there is a possibility of an increase in alumina maintenance and production cuts. As of July 1, there are expectations for partial maintenance, production cuts, and the gradual ramp-up of newly commissioned alumina capacity. In July, the nationwide operating capacity of metallurgical-grade alumina is expected to remain largely stable, at around 88.27 million mt/year.

Overseas aluminum

According to SMM statistics, the total overseas production of primary aluminum in June 2025 increased by 2.9% YoY, with a monthly average operating rate of 88.5%, up 0.2% MoM and 0.5% YoY.

In the month, Alcoa announced that its San Ciprian aluminum smelter in Spain, affected by a major power outage, has suspended production resumption. It will restart the resumption process after negotiating a stable and sustainable power supply plan with the government. No specific resumption time has been announced yet. Before the shutdown, the plant's capacity utilization rate had recovered from 6% to approximately 10%.

Additionally, SMM learned that Inalum's plan to expand capacity in cooperation with EGA, announced in February this year, has been canceled. Currently, Inalum is still seeking new partners to continue expanding its current capacity of 275,000 mt to 300,000 mt through production line upgrades, with a long-term plan to expand to 400,000 mt and simultaneously construct a fifth hydropower station.

Looking ahead to July, with the gradual commissioning of new capacity in India and the steady progress of production resumption plans at some smelters in Europe, overseas primary aluminum production is expected to increase by 2.9% YoY, with the operating rate expected to rise to 88.8%.

Overseas Metallurgical-Grade Alumina

According to SMM statistics, overseas metallurgical-grade alumina production in June 2025 increased by 4.8% YoY. The average operating rate of overseas alumina refineries reached 82.5%, up 0.5% MoM and 3.6% YoY.

The increase in production mainly came from Indonesia. Among them, 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 production in Q2. PT Borneo Alumina Indonesia, controlled by Inalum and PT Antam, also has a capacity of 1 million mt, but due to insufficient orders, its current operating rate remains at around 80%. In addition, PT Bintan Indonesia Alumina (controlled by Nanshan Group) has commenced feeding raw materials for its phase III 1 million mt project, with the first batch of alumina expected to be produced in July and full production to be achieved by the end of the year. Immediately after the third phase reaches full production, the fourth phase will commence.

Looking ahead to July, overseas metallurgical-grade alumina production is expected to increase by 6.1% YoY, while the operating rate is expected to slightly decline to 80.9% due to the commissioning of Nanshan's new capacity.

Primary Lead

In June 2025, the domestic production of primary lead decreased as expected, with a MoM decline of 0.78% and a YoY increase of 16.23%. The cumulative production of primary lead from January to June 2025 increased by 9.69% YoY.

It is understood that in June, maintenance and recovery coexisted among primary lead smelters, with the overall production decline being smaller than expected. The main reason for the smaller-than-expected decline in primary lead production was that lead prices fluctuated upward in June, with the most-traded SHFE lead contract gradually stabilizing above the 17,000 yuan/mt level, especially in late June, when SHFE lead surged strongly, reaching a high of 17,270 yuan/mt, the highest level in nearly three months. As lead prices rose, the production enthusiasm of lead smelters increased, with some enterprises increasing production or postponing maintenance, resulting in a smaller-than-expected decline in production. During the period, lead smelters in north and south-west China underwent maintenance, while production cuts also occurred in other regions due to insufficient supply of raw materials such as lead concentrates and scrap. Meanwhile, smelters in central and south China resumed production after maintenance. Overall, June's production remained largely unchanged as increases and decreases offset each other.

Looking ahead to July, the relatively concentrated production resumption of primary lead smelters after maintenance is expected to drive output growth. For instance, lead smelters in east, central, and north China that completed equipment maintenance in June will resume normal production in July. Although new maintenance plans emerged among smelters in south-west China, this will barely affect the growth outlook for primary lead output in July due to their small size. Notably, if lead prices continue rising, they will further stimulate smelters' production enthusiasm, with primary lead output projected to increase by around 4% in July.

Meanwhile, lead concentrate TCs declined further, with negative TCs for imported ore becoming prominent, with reports of -$80 to -$100/dmt, while SMM's domestic Pb50 lead concentrate TCs dropped to 400-700 yuan/mt (metal content). Against the backdrop of smelter production increases, the supply gap for raw materials like lead concentrates will widen further, potentially limiting the growth of lead ingot supply in July.

Secondary Lead

In June 2025, secondary lead production recovery fell short of expectations, up 2.39% MoM but down 13.57% YoY. Secondary refined lead output rose 1.27% MoM but declined 17.97% YoY.

In May, high raw material costs coupled with weak downstream demand led to a significant drop in secondary lead production. Entering June, pressure on both procurement and sales showed no marked improvement. Secondary lead smelters maintained low production enthusiasm, with some postponing resumption plans after maintenance in April-May. Additionally, sudden equipment failures halted production at individual plants in central China, while new capacity in south-west China delayed commissioning due to issues identified during equipment debugging—all factors limiting June's secondary lead output growth.

According to smelters, scrap battery supplies are currently scarce in the market, while recyclers are withholding stockpiles, resulting in daily arrivals barely sufficient to maintain low production operations. Under such market conditions, operating smelters generally lack confidence in raising output in July, with most believing production will remain roughly flat compared to June, and some even holding expectations for production cuts. However, some large secondary lead smelters in east China, north China, and north-west China are expected to resume production post-maintenance or recover from cross-month maintenance, with July output projected to increase MoM from June. Overall, secondary lead production in July is expected to maintain a growth trajectory.

Refined Zinc

In June 2025, SMM data showed China's refined zinc production rose 6% MoM and approximately 7% YoY, with cumulative January-June output increasing by over 1.5% YoY—slightly below expectations. June domestic zinc alloy production slightly decreased MoM. Domestic smelter output expanded in June, driven by resumption after maintenance and production increases in Inner Mongolia, Hunan, Shaanxi, Anhui, Guangxi, and Qinghai, despite unexpected temporary maintenance in Hunan and Qinghai and routine maintenance in Yunnan.

SMM forecasts domestic refined zinc production will increase nearly 2% MoM and over 21% YoY in July 2025, with cumulative January-July output projected to rise over 4% YoY. July smelter output growth will primarily stem from resumption after maintenance, new capacity releases, and production resumptions in Yunnan, Henan, Guangxi, Shanxi, Shanxi, Qinghai, and Hubei. Production declines will mainly result from routine maintenance in Gansu and temporary maintenance in Inner Mongolia, Shaanxi, and Hunan.

Refined Tin

According to SMM's processed data based on communication with market players, China's refined tin output fell 6.94% MoM and 15.2% YoY in June 2025. The production cuts were mainly due to multiple factors such as raw material shortages, cost pressures, and regional production disruptions. A detailed regional analysis is provided below:

According to data from the General Administration of Customs, China's imports of tin concentrates reached 13,449 mt in May 2025. Despite Myanmar being China's largest source of tin ore imports in the past, imports from Myanmar remained low. Although Myanmar was once China's largest supplier of tin ore, due to the mining ban policy in August 2023 and the delayed production resumption in the Wa region in 2025, imports from Myanmar in May were less than 700 mt (metal content), with the annual import share dropping below 30%. Although imports rebounded in May, the cumulative imports of tin concentrates from January to May were 10,000 mt, with overall supply remaining at historically low levels. The long-term gap caused by the mining ban in Myanmar has not yet been fully filled.

Yunnan Region saw most severe raw material shortages. Local smelters generally had raw material inventories below 30 days, leading to intense competition for tin ore procurement. Some enterprises experienced inventory backlogs due to high-price stockpiling, but weak downstream demand suppressed shipments. Cost pressures were prominent: Processing costs for low-grade ores remained high, coupled with rising electricity costs, leading to further reductions in enterprise operating rates.

Jiangxi Region: Scrap supply chain was disrupted. The scrap tin recycling system was under pressure, with market circulation of scrap decreasing by over 30%. Insufficient crude tin supply directly led to a decline in refined production. Capacity exit risks: Small and medium-sized secondary smelters faced shutdowns due to sustained losses, leading to a passive increase in industry concentration.

Anhui and Other Regions saw dual raw material shortages: Weak supply of both tin concentrates and scrap tin, with operating rates consistently below 70% of planned capacity. Some enterprises planned maintenance, further suppressing production.

Based on SMM calculations, refined tin production is expected to rebound by 8.59% MoM in July. Driving factors: Some smelters in Yunnan and Jiangxi provinces have completed maintenance and are gradually resuming production.

Refined Nickel

In June 2025, SMM's refined nickel production decreased by 10% MoM from May, increased by 15% YoY, with YoY increase of 28% in H1. The operating rate of domestic refined nickel enterprises reached 59%. The decline in June production was primarily due to significant production cuts by a top-tier enterprise caused by raw material shortages, while other smelters maintained their previous production pace with no notable changes in output. Price-wise, refined nickel spot prices showed a clear downward trend in June, averaging 121,558 yuan/mt, down 3,125 yuan/mt MoM from May. The average Jinchuan nickel premiums reached 2,600 yuan/mt in June, up 400 yuan/mt MoM. The substantial price drop in June led to increased spot trading volume and downstream procurement volume for refined nickel compared to May, though the overall growth remained limited, failing to alleviate the high inventory levels of refined nickel.

Refined nickel production in July is projected to rise 1% MoM. The production cuts by top-tier enterprises are unlikely to recover soon. Nickel intermediate products remain scarce and prices continue to decline, dampening smelters' willingness to ramp up output. New capacity additions are still pending.

NPI

China's NPI production in June 2025 fell approximately 5.03% MoM in physical content and 4.82% MoM in metal content. Ore costs for domestic smelters rose further while finished product prices hit this year’s lows. The divergence between raw material and finished product prices exacerbated smelter losses. Traditional smelters reduced production, while some experienced grade declines. Additionally, a smelter in North China resumed operations slowly after maintenance in June, contributing to the sharp drop in production in metal content. For integrated smelters, high Philippine ore prices made in-house production of NPI less economical, leading to reduced high-grade NPI output from integrated 300-series stainless steel mills. Meanwhile, weaker 200-series stainless steel production drove low-grade NPI output lower. Overall, China's low- and high-grade NPI production began to decline in June amid losses and weakening downstream demand.

China's NPI production in July 2025 is expected to decrease approximately 0.58% MoM in physical content and 0.04% MoM in metal content. According to the SMM survey, a traditional smelter in east China resumed production after maintenance, supporting the overall production in metal content. Supply side, Philippine ore prices are unlikely to fall in the short term, making in-house production of NPI less economical. Production of high-grade NPI for 300-series stainless steel mills remained low, while output of 200-series stainless steel may decline further due to the off-season, dragging down low-grade NPI production. Overall, high-grade NPI production in metal content edged up slightly while low-grade NPI production in metal content dropped, resulting in relatively limited fluctuations in total production in metal content expected for July.

Indonesian NPI

Indonesian NPI production in metal content fell about 3.26% MoM but rose 13.51% YoY in June 2025. Saprolite ore premiums in Indonesia held up well, with relatively small production cuts in major mining areas. Ore demand remained high, while rainfall was still abundant in Halmahera, hindering mining and transportation. Finished product prices faced downstream resistance, and losses became common among mainstream Indonesian NPI smelters. The SMM survey showed some production lines in South Sulawesi and Central Sulawesi had halted due to high cost pressure, while others operated at lower rates. However, the impact was limited as high-cost capacity accounted for a relatively small share. Some lines in Kalimantan and Halmahera also reduced operating rates due to losses. Meanwhile, output increased at new lines in Obi Island. Overall, Indonesian NPI production declined slightly in June.

Indonesian NPI production in metal content is expected to drop about 1.52% MoM but surge 28.4% YoY in July 2025. Saprolite ore premiums in Indonesia may ease slightly, alleviating smelter losses compared to previous periods. According to the SMM survey, due to consecutive declines in finished product prices, smelters generally show low production enthusiasm amid losses. Coupled with weakening demand for NPI from downstream stainless steel, a few production lines in Halmahera may consider maintenance during this period. Additionally, persistently high costs are unlikely to ease in the short term, keeping NPI plants in loss-making territory for an extended period. Some convertible production lines may shift to high-grade nickel matte, thereby reducing NPI output. Overall, Indonesia's NPI production in July is expected to weaken further.

Nickel Sulphate

Based on SMM data, China's nickel sulphate production in June 2025 is estimated at approximately 24,200 mt in metal content, corresponding to 110,200 mt in physical content, down 1.42% MoM and 19.69% YoY. Demand side remained sluggish, with sufficient raw material inventory at some precursor producers and persistently weak end-use market demand, leading to reduced purchase willingness for nickel salts. Supply side, dragged by downstream demand, saw production cuts or shutdowns at some nickel sulphate producers, driving an overall MoM decline in supply.

Looking ahead to July, although order volumes at some downstream precursor enterprises showed signs of recovery, overall market demand remains weak, limiting incremental demand for nickel salts. SMM expects nickel sulphate production to rise to around 24,600 mt in metal content (111,900 mt in physical content) in July, up 1.57% MoM but down 9.9% YoY.

Battery-Grade Manganese Sulphate

In June 2025, high-purity manganese sulphate production declined MoM. Supply side, most manganese salt plants maintained low production enthusiasm, adopting conservative production schedules primarily to fulfill long-term orders and avoid inventory buildup, with overall operating rates below 50%. Demand side, ternary cathode precursor market focused on destocking, leading to cautious procurement of manganese sulphate—only meeting basic needs with minimal spot orders observed. The overall market sentiment remained sluggish, reflecting weak supply and demand dynamics. Meanwhile, demand for manganese sulphate from other sectors such as sodium-ion batteries and LMFP remained sluggish, failing to boost market vitality.

In July 2025, the downstream ternary cathode precursor market is expected to recover slightly, potentially driving MoM growth in production at manganese salt plants.

EMD

In June 2025, EMD production dropped slightly MoM. Specifically, output of EMD used for carbon-zinc battery and alkaline manganese battery contracted marginally, primarily due to the off-season in June with fewer new orders. Most enterprises maintained only their original procurement volume, coupled with slight price declines, leading to reduced production schedules. EMD used for LMO battery saw particularly notable production cuts, as fierce competition in the downstream LMO market prompted most manufacturers to switch to more cost-effective Mn3O4, reducing demand for EMD and dampening production enthusiasm.

In July 2025, the primary battery market may recover, boosting production schedules for EMD used for carbon-zinc battery and alkaline manganese battery, with overall EMD output projected to show an upward trend that month.

Mn3O4

In June 2025, Mn3O4 production declined MoM while maintaining YoY growth. Battery-grade Mn3O4 saw a more pronounced reduction, as the traditional off-season for the LMO market resulted in weak procurement demand and price pressure, lowering production enthusiasm and scheduled output. The LMFP market's slow development and unfixed manganese source selection failed to provide significant support. Meanwhile, the electronic-grade market remained sluggish, with supply largely maintaining previous levels and order deliveries, making it difficult to reverse the overall oversupply situation.

In July 2025, the LMO market may recover slightly, increasing planned production of battery-grade Mn3O4, with total Mn3O4 output expected to rise.

High-carbon ferrochrome

According to SMM data, China's high-carbon ferrochrome production in June 2025 decreased slightly, with a minor MoM decline of 0.83% and a YoY decrease of 8.96%. Among them, Inner Mongolia accounted for 78.20% of the production, with a MoM decrease of 0.9%. Sichuan, Guizhou, Guangxi, and other southern regions accounted for 17.16% of the production, with a minor MoM decline of 0.69%. The reduction in high-carbon ferrochrome production in June mainly came from Inner Mongolia, where environmental protection checks impacted ferrochrome production in the northern region. Some ferrochrome producers chose to stagger production, resulting in a decrease in output. In contrast, the southern regions officially entered the rainy season, and with the advantage of lower electricity prices, ferrochrome producers chose to resume production, leading to a slight increase in ferrochrome output. Overall, ferrochrome production remained largely stable.

In June, the tender prices for high-carbon ferrochrome procurement by mainstream stainless steel mills remained flat. Tsingshan Group's tender price was maintained at 8095 yuan/mt (50% metal content), aligning with market expectations. Oversupply in the downstream stainless steel market continued to drive the prices downward. During the traditional consumption off-season, end-use consumption was weak, coupled with production cuts by stainless steel mills, resulting in limited procurement demand for ferrochrome. The market trading atmosphere was mediocre, with difficulties in selling ferrochrome. Producers had a poor outlook for the future market, with many planning maintenance, leading to fluctuations in production.

Looking ahead to July 2025, high-carbon ferrochrome production is expected to increase. On June 24, Tsingshan Group announced the tender price for high-carbon ferrochrome procurement in July at 8095 yuan/mt (50% metal content), unchanged MoM. This flat price exceeded the market's earlier bearish expectations, boosting confidence in the chrome market to some extent. Additionally, with the rapid short-term decline in chrome ore prices, the smelting cost of ferrochrome decreased, expanding producers' profit margins and enhancing their production enthusiasm, leading to expectations for production increase. Furthermore, with the conclusion of environmental protection checks in the northern region, affected ferrochrome producers resumed normal production, and high-carbon ferrochrome production is expected to increase.

Stainless Steel

According to SMM survey data, China's stainless steel production in June 2025 decreased by 7.09% MoM and increased slightly by 0.1% YoY. By series, 200-series production decreased 3.89% MoM, 300-series fell 6.94% MoM, and 400-series dropped 11.55% MoM.

In June, the stainless steel market officially entered the traditional consumption off-season. Although macro policy disturbances temporarily subsided during the month, market uncertainties remained significant. Despite consecutive production cuts by steel mills in recent months, current output still stood at historically high levels compared to the same period of previous years, highlighting the supply-demand imbalance. Moreover, stainless steel prices continued to decline throughout the month, breaking multi-year lows. Influenced by the "rush to buy amid continuous price rise and hold back amid price downturn" mentality, end-users became more cautious in raw material procurement, mainly making minimal purchases based on immediate needs. This led to persistently sluggish market transactions, further increasing the sales pressure on steel mills and their agents. Facing severe cost-price inversion, more mills planned production cuts.

By series, 200-series stainless steel output remained generally stable during the month, while 300-series and 400-series saw significant declines. Having already implemented substantial cuts earlier, 200-series mills slowed their reduction pace in June, but transactions stayed weak with further price drops, prompting expectations of additional cut plans. Affected by the weakening futures market, 300-series became dominated by low-priced supplies, with slow sales and heavy inventory pressure at mills. Severe losses drove output reductions. Meanwhile, 400-series faced obvious sales stagnation after previous output increases, with persistent price declines and tightening ferrochrome supply exacerbating cost pressures.

Looking ahead to July, stainless steel production is expected to decline further. Stainless steel prices have hit five-year lows, and market confidence remains weak with downstream players maintaining cautious pessimism. Steel mills, agents and traders all face tremendous sales pressure, while the supply-demand imbalance persists. Due to the shutdown of overseas smelters and reduced imports of chrome raw materials, supply has tightened, keeping high-carbon ferrochrome prices firm. Although nickel raw material prices have continued to decline, stainless steel mills still operate at a loss. Currently, the supply-demand relationship in the market has not been effectively improved, and steel mills are under triple pressure from weak demand, high inventory, and losses. Before the end of the traditional consumption off-season, downstream demand is unlikely to rebound significantly, and production cuts have become a necessary measure to alleviate the supply-demand imbalance. The specific pace and scale of production cuts will be key factors in determining whether stainless steel prices can stabilize in July.

EMM

According to SMM data, China's EMM production in June 2025 decreased by about 4% MoM but was up over 1% YoY. The main reason for the production decline in June was the maintenance at EMM plants in Guizhou and Hubei, leading to a slight decrease in EMM production. Overall, most EMM plants' production schedules showed relatively small fluctuations, and the reduction in EMM supply was influenced by the shorter number of days in the calendar month.

In July, EMM plants in Guizhou and Hubei that had halted production may have plans to resume production, but the resumption timelines vary among plants, so the estimated increase in production is limited. Based on the production schedule survey of manganese plants, the supply side is expected to see a slight increase in production in July.

SiMn Alloy

According to SMM data, China's total SiMn alloy production in June 2025 increased by about 1% MoM but decreased by nearly 30% YoY. The MoM growth was mainly due to high operating rates in low-cost regions such as Inner Mongolia, while production in other areas of north China was basically stable. Additionally, production in regions like Yunnan slightly increased due to lower electricity prices during the rainy season, and some enterprises in Guangxi increased their production schedules due to rising orders.

Looking ahead to July, most enterprises in north China expect relatively stable production, while in south China, some enterprises plan to resume production due to lower electricity prices, and overall production is expected to increase.

Silicon Metal

According to SMM market survey, silicon metal production in June 2025 increased 6.5% MoM and decreased 27.7% YoY. The cumulative production of silicon metal from January to June 2025 was down 17.8% YoY.

The increase in silicon metal production in June was mainly driven by the regions of Sichuan, Xinjiang, and Yunnan. Some capacity in Xinjiang resumed production, leading to a MoM increase in output. Sichuan entered the rainy season in June, with a few silicon enterprises resuming operations, but production was constrained due to losses; Sichuan's production in June increased MoM but decreased 38% YoY. Yunnan was still in the transitional period from the dry season to rainy season, with two new projects being put into operation; Yunnan's production in June increased MoM but decreased 73% YoY. Additionally, production in Gansu and Inner Mongolia declined MoM due to maintenance at some silicon enterprises.

In July, the production of silicon metal in Sichuan and Yunnan is expected to continue increasing. As Yunnan enters the rainy season, some silicon enterprises in Baoshan and other areas plan to resume and expand production, with an estimated MoM increase of around 10,000 mt. The growth rate of production in Sichuan will slow down. In north China, most silicon enterprises' operations were basically stable, with large producers holding a significant share of capacity, and there are uncertainties regarding whether they will increase or cut production. Therefore, the silicon metal production in July has strong uncertainty, and attention should be paid to the operational dynamics of major producers.

Polysilicon

The actual polysilicon production in June increased slightly by about 5.2% MoM compared to May, mainly due to increased output from some large producers in Sichuan and Xinjiang. The arrival of the rainy season was the primary reason for the production growth.

Polysilicon production in July is expected to continue growing, mainly due to further increases in production in Sichuan and Yunnan, as well as lower-than-expected production cuts in Inner Mongolia.

PV Module

The module scheduled production in June declined by more than 10% MoM, mainly affected by a sharp reduction in installation projects after the May 31^st policy deadline and low market sentiment. Both the purchase and shipments of dealers decreased, and finished product inventories of module producers rose. The module scheduled production in July is expected to decline by about 2% MoM. Apart from a very small number of manufacturers increasing production, most module factories cut production, but the reduction was relatively small. This was because the installation data in May hit a record high, and projects rushed to meet the May 31st deadline, adopting a strategy of applying first and then installing and connecting to the grid. The postponement of some projects has supported module demand in July. These projects are mainly distributed projects. Given the different proportions of distributed and centralized projects in the customer structures of various module manufacturers, orders in July also varied.

Solar Cell

In June, solar cell production decreased by 5.57% MoM. Driven by structural demand, the proportion of TOPCon210RN increased to around 35%. The installation rush in April-May depleted the demand for June and H2, leading to a sharp drop in total orders. Consequently, solar cell production remained under pressure in June, with enterprises facing significant shipping pressure and high inventory levels.

PV Film

In June, the total production schedule of the PV film industry decreased by 8.72% MoM. The main reason was the decline in module scheduled production on the demand side, resulting in weak demand and a reduction in the overall operating rate of film manufacturers. Film production also decreased. Module scheduled production continued to decline in July, with demand remaining weak. It is expected that film production will also continue to decline in July.

PV-grade EVA

In June, the production schedule of PV-grade EVA decreased by 0.43% MoM. The reasons include the conversion and maintenance of some petrochemical enterprises and the decrease in module scheduled production in June. The operating rate of film manufacturers fell short of expectations, and demand declined. According to SMM, demand is expected to continue to decline in July. Some petrochemical enterprises are expected to convert production and undergo maintenance, and it is projected that the production of PV-grade EVA will continue to decline in July.

PV Glass

In June, the monthly production of domestic PV glass continued to increase, with a 0.42% MoM growth from May. Although the number of production days for domestic PV glass decreased by one day in June and some glass enterprises began to block their kilns and reduce production, the kilns that started production earlier began to release a large amount of output this month, resulting in both an increase and decrease in supply. The comprehensive production increased slightly. Regarding supply in July, due to the further intensification of loss pressures for PV glass, glass enterprises are expected to increase production cuts in July, with an estimated nearly 5% MoM decrease in operating rates from June.

DMC

In June, domestic silicone DMC production increased by 13.75% MoM from May and decreased by 1.60% YoY. In June, the operating load of most domestic silicone monomer enterprises improved. After consecutive months of production cuts and suspensions, the number of silicone units under maintenance decreased recently, leading to an increase in silicone production due to the rise in overall operating capacity.

Looking ahead, although the operating rates of some monomer enterprises in China will still decline in July, the impact will be limited. It is estimated that DMC production in July will increase by 1.53% MoM from June.

Magnesium Ingot

According to SMM survey data, China's primary magnesium production increased by 6.63% MoM in June 2025.

In June, the production changes of domestic primary magnesium manufacturers varied, but overall, China's magnesium ingot production increased MoM. The increase in production was mainly due to the following two reasons: Firstly, affected by the low and declining prices of raw materials, the profit margins of primary magnesium smelters effectively improved. Magnesium ingot smelters that had suspended production due to cost losses in the early stage gradually resumed production in early June, leading to an increase in primary magnesium production in June. Secondly, two primary magnesium smelters in Xinjiang that had undergone maintenance gradually resumed production, which significantly boosted primary magnesium production. The decrease in primary magnesium production this month was mainly due to the following reason: Two primary magnesium smelters in Shaanxi Province underwent maintenance or production cuts, resulting in a decrease of approximately 1,500 mt in primary magnesium production in June due to this impact. Overall, the increased production of primary magnesium in China exceeded the decreased production, and the overall primary magnesium production in June increased by 6.63% MoM.

According to SMM survey, currently, four primary magnesium smelters in the main production areas have reported production resumption plans for July, and one smelter has recently started production. The specific resumption times of other primary magnesium smelters are undetermined, and SMM will continue to track. Overall, the production of domestic magnesium ingot smelters in July may increase, and it is estimated that domestic primary magnesium production in July may increase slightly MoM.

Magnesium Alloy

SMM data shows that in June 2025, China's magnesium alloy production increased slightly MoM, and the operating rate of magnesium alloy enterprises continued to rise at a high level.

In June, domestic magnesium alloy producers continued to increase their production, and the magnesium alloy market recently exhibited a fluctuating development trend. As major producers intensified their market promotion efforts, the cost-performance advantage of magnesium alloy materials gradually gained industry recognition, prompting some die-casting enterprises to begin adjusting their production processes and gradually replacing aluminum alloys with magnesium alloys. Although this material substitution trend has not yet resulted in large-scale orders, it has driven a mild increase in overall demand. It is worth noting that June, as a traditional peak production season for the die-casting industry, directly boosted the short-term demand for magnesium alloys. However, as seasonal factors shifted, the market began to exhibit off-season characteristics, with procurement volumes pulling back recently. Based on the current changes in market supply and demand, the industry generally expects that magnesium alloy production may undergo a moderate adjustment downward in July.

Magnesium Powder

According to SMM data, China's magnesium powder production decreased by 1.65% MoM in June 2025. In June, the domestic magnesium powder market exhibited characteristics of structural adjustment. Despite facing dual pressures from both domestic and external demand—with the domestic consumer market remaining sluggish and the procurement demand from international steel enterprises shrinking, leading to a continuous decline in export orders for several months—market differentiation was evident. Some small and medium-sized producers have actively reduced their capacity utilization rates, while leading producers have increased their operating levels due to concentrated order advantages. This dynamic of one declining while the other rises has narrowed the total production decline for the month more than expected. With the end of the traditional peak season, the market generally expects demand to weaken further, and the industry is likely to face greater production cut pressure in July.

Titanium Dioxide

According to SMM data, China's titanium dioxide production decreased by 5.93% MoM in June 2025.

This month, domestic titanium dioxide producers have shown significant divergence: leading enterprises maintained stable production, while small and medium-sized producers generally implemented production cuts or shutdowns. The overall industry operating rate remained at 60%, leading to a 3.06% reduction in total production. Affected by multiple factors such as the deterioration of the international trade environment, tariff barriers, and anti-dumping policies, China's titanium dioxide export orders have contracted significantly, with product prices continuing to decline in June. In the domestic market, fierce competition among peers has exacerbated overcapacity pressure, with producers' inventories continuing to accumulate, forcing them to reduce production or shut down to alleviate inventory pressure.

Currently, the industry is generally facing inventory backlogs, with downstream order demand remaining weak. Enterprises that have halted production have not yet shown any intention to resume production. It is expected that more enterprises will join the production cut ranks in July, and titanium dioxide production may continue to decline.

Titanium Sponge

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

In the first half of this year, the domestic titanium sponge market exhibited a dynamic balance between supply and demand. Despite the continued tight spot supply, the production side maintained stable operations, with enterprises' inventory cycles having been reduced to a reasonable range of 15-21 days. After entering June, driven by downstream producers' advance stockpiling in preparation for the traditional peak production season, the stable demand for high-end titanium sponge products (Grade 0 and Grade 1) supported a slight increase in production. It is worth noting that after previous price strategy adjustments, a new price consensus has gradually formed between producers and downstream users, laying the foundation for market stability. Judging from the current trend, under the dual influence of continuous inventory digestion and end-use demand support, production is expected to continue to grow mildly in July.

Light Rare Earths

In June, Pr-Nd oxide production increased slightly MoM, with the main increase observed in Jiangxi and Shandong provinces. It is worth mentioning that the growth in Pr-Nd oxide production was mainly due to an increase in scrap recycling output. As scrap prices were favorable, suppliers' willingness to sell increased, and the recycling volume of scrap recycling enterprises also grew. Due to environmental protection inspections in a certain region, the production of separation plants was slightly affected in terms of raw ore output, resulting in a slight decrease in the output of Pr-Nd oxide raw materials. However, overall Pr-Nd oxide production in June increased 2.6% MoM.

Pr-Nd alloy production rose slightly MoM in June, with the main increment coming from Gansu region. This growth was primarily attributed to the commissioning of capacity expansion projects in the area, supported by increased orders and correspondingly higher operating rates. Production in other regions remained stable without significant fluctuations. Overall, total Pr-Nd alloy output grew 4.5% MoM in June. Looking ahead to July, with gradual recovery in end-user demand and continued progress in export licenses, Pr-Nd alloy production is expected to increase slightly.

Medium-Heavy Rare Earth

China's medium-heavy rare earth oxide production saw a mild rebound MoM in June 2025. Although ion-adsorption ore imports were unfavorable, with some separation enterprises reporting procurement difficulties, most separation plants maintained relatively stable production thanks to existing raw material inventories.

While rare earth oxide output from raw ore remained stable, production from scrap showed notable growth. Scrap recycling enterprises reported that the scrap market has consistently been a seller's market. With NdFeB scrap prices rising in June, magnetic material enterprises became more willing to sell scrap, leading to significantly higher operating rates at most recycling plants. This became the main driver behind the MoM growth in medium-heavy rare earth oxide output in June.

NdFeB

China's NdFeB magnetic material production showed a mild upward trend MoM in June 2025. Despite facing multiple pressures including rare earth raw material price fluctuations and export policy adjustments—which caused some small and medium-sized magnetic material enterprises to experience pressure on new orders—leading producers maintained strong production stability through their high-stickiness customer base (such as core NEV suppliers) and long-term contract mechanisms.

Notably, as the policy orientation of the rare earth industry becomes clearer, particularly with the clarification of the export license management framework and the implementation of support measures for high-end manufacturing industries, magnetic material enterprises generally reported a marginal recovery in newly signed orders in late June, with market expectations turning cautiously optimistic.

Observing the industry's operational landscape, structural differentiation is particularly pronounced: top-tier enterprises, leveraging their barriers to large-scale manufacturing, technological synergies, and order reserves in high-end application fields, continue to maintain a high-load production pace. In contrast, small and medium-sized producers, squeezed by homogeneous competition in low-end magnetic materials, are forced to scale back their capacity due to weak cost control capabilities and rising compliance risks. The current momentum for production growth primarily stems from the positive contributions of top-tier enterprises, whose capacity expansions effectively offset the natural pullback in production from small and medium-sized producers.

Based on the transmission effect of policy dividends (such as improvements in the overseas trade environment and domestic stimulus policies for the green electricity industry chain), coupled with the certainty of high-end demand growth, such as lightweight upgrades in NEV motors and precision components for robot joints, there is a widespread consensus within the industry that production will continue its upward trend in July.

Molybdenum Concentrate

In June, domestic molybdenum concentrate production experienced a slight MoM decline. From the supply side, June is traditionally the season for equipment maintenance, with some molybdenum mines conducting planned equipment maintenance work, leading to restricted production activities. Meanwhile, intensified environmental protection inspections prompted some mines to slow down their mining pace, further affecting molybdenum concentrate output. Molybdenum concentrate prices fluctuated at highs in June, with major mines maintaining a relatively stable shipping pace, while downstream smelters were reluctant to replenish stocks due to high prices. In June, mines in regions such as Heilongjiang Province completed their maintenance shutdowns and resumed production, slightly affecting output. Entering July, there will be fewer instances of extensive maintenance for domestic molybdenum concentrate, and with the downstream ferromolybdenum market about to enter the off-season, demand for ore will decline, and it is expected that the supply tightness of molybdenum concentrate will ease somewhat in July.

Ferromolybdenum

In June 2025, domestic ferromolybdenum production declined MoM. In June, the prices of ferromolybdenum raw materials fluctuated at highs, leading to inverted margins for ferromolybdenum enterprises. Most enterprises focused on production based on orders, with insufficient willingness to maintain production inventory. Additionally, downstream demand from stainless steel mills also showed a slight decline, and the market was about to enter the off-season, further affecting the production willingness of some ferromolybdenum plants. Entering July, the tight supply situation of molybdenum concentrate eased somewhat, but the industry was still constrained by poor downstream demand, making it difficult to expect an increase in production.

Ammonium Paratungstate

Production of ammonium paratungstate (APT) in June 2025 In June 2025, domestic APT production declined slightly MoM. Affected by the reduction of the first batch of tungsten mining quotas by over 4,000 mt YoY, mine maintenance, and environmental protection inspections, the supply of tungsten concentrate was tight, raw material prices rose, enterprise production costs increased significantly, profit margins were compressed, and production enthusiasm was dampened. Some APT enterprises in Jiangxi and other places underwent maintenance and production cuts. Meanwhile, downstream industries such as cemented carbide and special steel had weak demand, and market expectations were pessimistic. Enterprises actively reduced production scale and output. Entering July, it was difficult to expect an increase in tungsten concentrate supply, and the price concession space for raw materials was limited. The industry cost would still fluctuate at highs. However, downstream demand was unlikely to rebound significantly in the short term. It was expected that APT production would remain at a low level or fluctuate slightly.

Silver

In June 2025, silver production increased by 1.79% MoM. This growth was mainly attributed to the resumption of production by smelters after maintenance and the slight increase in production by some enterprises in anticipation of the mid-year performance report disclosure.

Additionally, in terms of production cuts, a small-to-medium-sized smelter in south-west China conducted maintenance and halted production on its precious and rare metal production line, with production expected to resume in early July. A smelter in north China underwent routine maintenance of its lead-silver system, with production expected to resume in mid-to-late July. Another small-scale smelter in north China reduced production due to environmental protection checks and other reasons.

Looking ahead to July, a small-scale smelter in south-west China originally scheduled for silver refining maintenance in late June has delayed the work to July; a smelter undergoing maintenance in May in southern China is expected to gradually resume normal production in July; routine maintenance conducted by individual lead smelters in mid-to-late June may cause their silver output to decline MoM; smelters that underwent maintenance in June will resume production sequentially. Overall, spot silver ingot supply in July is expected to continue increasing slightly.

Silver Nitrate

In June 2025, silver nitrate production decreased by 5.8% MoM. As downstream silver paste and solar cell enterprises slowed their operations, consumption demand from silver nitrate enterprises weakened slightly. One silver nitrate producer reported that while orders from major clients remained relatively stable, orders from smaller clients decreased significantly, leading to an overall decline in operating rates. Additionally, with silver nitrate capacity expansion, some enterprises entered the market by lowering processing fees, resulting in mixed operating rate changes among silver nitrate producers - operating rates at individual enterprises increased compared to May. Looking forward to July, as end-use demand in the PV sector has yet to recover, silver nitrate producers are adopting a wait-and-see approach, and silver nitrate production in July is expected to remain stable or decrease slightly.

Antimony Ingot

According to SMM assessments, China's antimony ingot (including antimony ingot, crude antimony conversion, antimony cathode, etc.) production in June 2025 dropped sharply by approximately 21.5% MoM compared to the previous month. Specifically, among the 33 survey respondents evaluated by SMM, 15 producers reported zero production - an increase of 4 from the previous month; 15 producers experienced production cuts - a decrease of 4 from the previous month; and 3 producers maintained normal production levels - unchanged from the previous month. Regarding antimony ingot production, June saw another sharp decline following May's slight production increase. Many market participants consider this a normal phenomenon, as recent sharp market price declines have made production volumes highly elastic. Furthermore, numerous producers entered summer maintenance shutdowns to limit production, reduce inventories, and alleviate sales pressures. Currently, imported ore still cannot enter the domestic market in large quantities, and market participants indicated that the overall supply of raw materials remains tight. However, by late June or early July, more manufacturers are expected to announce production halts or cuts. Market participants anticipate that China's antimony ingot production in July 2025 will likely still see a significant decline compared to June.

Note: Starting from May 2022, SMM has been publishing its assessed production of antimony ingots (including antimony ingots, converted crude antimony, antimony cathode, etc.) nationwide. Thanks to SMM's high coverage rate of the antimony industry, SMM surveyed a total of 33 antimony ingot producers, distributed across 8 provinces nationwide, with a total sample capacity exceeding 20,000 mt and a total capacity coverage rate as high as over 99%.

Sodium Pyroantimonate

According to SMM's assessment, the production of first-grade sodium pyroantimonate in China in June 2025 is expected to increase by approximately 13.23% MoM from the previous month. After experiencing volatile fluctuations for several consecutive months, production declined again in May but rebounded in June, leaving many market participants marveling at the ever-changing market dynamics. However, many market participants consider this a normal phenomenon, as the installation rush in the PV sector during May-June, coupled with an increase in orders from glass factories ahead of the summer break in overseas markets starting from the end of June, is also a normal occurrence. The production increase of many manufacturers in June is also related to receiving more orders, and whether this situation will continue into July remains uncertain. Looking at the detailed data, among SMM's 13 surveyed entities, 4 manufacturers were in a state of shutdown or commissioning in June, 4 sodium pyroantimonate manufacturers experienced an increase in production, but 1 manufacturer also saw a decline in production. Therefore, this also led to a significant increase in the overall production of first-grade sodium pyroantimonate in China in June. Market participants expect that the possibility of a continued substantial increase in the nationwide production of sodium pyroantimonate in July compared to June is relatively small, with a greater likelihood of it remaining flat or continuing to increase slightly.

Note: Starting from July 2023, SMM has been publishing its assessed production of sodium pyroantimonate nationwide. Thanks to SMM's high coverage rate of the antimony industry, SMM surveyed a total of 13 sodium pyroantimonate producers, distributed across 6 provinces nationwide, with a total sample capacity exceeding 86,000 mt and a total capacity coverage rate as high as 99%.

Refined Bismuth

According to SMM's assessment, the production of refined bismuth in China in June 2025 is expected to decrease by approximately 1.24% MoM compared to the nationwide production of refined bismuth in May. Refined bismuth production continued its downward trend after a sudden sharp decline in May, which was within the expectations of many in the market. Market participants indicated that the current stagnation or continued decline in production is reasonable due to the persistent tightness in raw materials. From the recent competition for bismuth raw materials in the market, many transactions for bismuth raw materials were concluded at high prices, reflecting the tight supply of raw materials, which has already impacted the normal operations of many producers. Regarding production conditions, some producers are still undergoing equipment maintenance, while others show stable or declining production trends, resulting in a further decline in overall domestic production compared to May. From detailed data, among the 24 surveyed producers by SMM, three producers saw a significant increase in production in June, while two experienced a notable decline. The production of the remaining producers either remained relatively stable or showed a slight increase. Many market participants expect that the tight supply of raw materials for bismuth producers nationwide will be difficult to alleviate in July. Producers are currently competing fiercely for production raw materials such as bismuth concentrate, and production is likely to continue being affected. The production of refined bismuth is expected to remain stable or decline slightly, with the possibility of another significant drop in production not ruled out.

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

Lithium Carbonate

In June 2025, the domestic lithium carbonate market showed a significant increase in production, with total lithium carbonate production up 8% MoM and up 18% YoY. The main driver of the production increase was the emergence of hedging opportunities in the futures market, prompting many lithium chemical producers, previously operating at low utilization rates, to resume production, leading to a notable rebound in overall industry output levels.

Breakdown by raw material, lithium carbonate derived from spodumene saw a total production increase of 11% MoM in June. The increase stemmed from two factors: the resumption of production after maintenance at leading lithium chemical plants, and the significant output growth at non-integrated lithium chemical plants with previously low operating rates, stimulated by hedging opportunities in the futures market. Consequently, lithium carbonate derived from spodumene saw a notable output increase. Total lithium carbonate derived from lepidolite continued to rise, up 9% MoM, benefiting from the production ramp-up at leading plants and incremental output from non-integrated plants driven by hedging operations in the futures market. Lithium carbonate derived from salt lake rose 7% MoM, with production reaching annual highs amid favorable temperature conditions. The recycling sector, however, recorded a substantial decline in total output, down 7% MoM, primarily due to severe losses at lithium chemical recycling plants as black mass prices remained relatively firm despite the sharp drop in lithium carbonate prices.

Lithium Hydroxide

SMM data shows lithium hydroxide production fell 5% MoM and 31% YoY in June. With relatively stable upstream supply structure, most lithium chemical plants adopted a produce-based-on-sales approach, while adjusting production structures between lithium carbonate and lithium hydroxide based on changes in market price, leading to an overall MoM decline in smelting output. The causticisation sector saw a 14% MoM and 19% YoY drop due to slow ramp-up at new production lines and short-term raw material adjustments.

In July, some smelting plants are expected to shut down for technological transformation, while new production lines at other plants will partially offset the impact. Overall output is projected to remain flat or drop slightly MoM, and fall around 26% YoY.

Cobalt Sulphate

SMM cobalt sulphate production decreased 9.71% MoM but increased 3.80% YoY in June 2025.

By raw material source, cobalt intermediate products accounted for 59%, MHP for 19%, and recycled materials for 22%. Due to the extension of the DRC's export ban, the prices of cobalt intermediate products have continued to rise, and the inventories of cobalt intermediate products at smelters have gradually decreased. Currently, recycled materials and MHP are gradually squeezing the share of cobalt intermediate products.

In terms of supply, from early May to mid-June, the spot price of cobalt sulphate generally showed a continuous downward trend. During this period, some cobalt sulphate smelters gradually chose to cut production or even suspend operations due to weak production economics or shortages of raw material inventories. After the DRC's policy extension was announced on June 21, upstream quotes for cobalt sulphate returned to near the previous highs, and profits improved somewhat. However, as downstream players remained in a wait-and-see mode during this period, the market remained relatively sluggish, so smelters maintained steady production.

In terms of demand, downstream ternary and Co3O4 enterprises have not seen significant improvement in orders. They have chosen to wait and see, focusing on digesting previous inventories. A few enterprises with shorter days of raw material inventories have focused on just-in-time procurement, with demand remaining relatively stable.

It is expected that by July, the issue of tight raw material supply for enterprises will become more pronounced. Production schedules for cobalt sulphate enterprises will become more cautious, and some enterprises may experience significant production cuts or even suspensions. It is projected that cobalt sulphate production schedules will decrease by 7.93% MoM in July.

Co3O4

In June 2025, Co3O4 production decreased by 8% MoM and increased by 24% YoY. In terms of supply, the spot price of Co3O4 generally showed a downward trend in early to mid-June. After the DRC's policy extension was announced on June 21, Co3O4 prices began to rise, and profit margins improved. However, the overall market has remained relatively sluggish recently, with a slight overall decline in Co3O4 production. In terms of demand, LCO enterprises have maintained a strong wait-and-see attitude, focusing on just-in-time procurement and fulfilling existing orders, with demand remaining relatively stable.

It is expected that in July, the issue of tight raw material supply will become more pronounced. Production schedules for Co3O4 enterprises will become more cautious, and some enterprises may experience significant production cuts. Therefore, the overall market supply is expected to decline further.

Ternary Cathode Precursor

In June 2025, SMM ternary cathode precursor production rose 2.3% MoM but fell 3.18% YoY. By product structure, 5-series precursors accounted for 16.76%, 6-series for 42.33%, and 8-series for 28.34%. The 6-series products gained more favour due to notable cost advantages amid ongoing price wars in the auto market, continuously expanding its market share and squeezing the share of 5-series and 8-series products. Domestic vehicle sales underperformed expectations with overall weak demand, except for stockpiling needs for new car models that boosted some orders. Overseas auto markets also showed weakness. Demand for small power products in June turned mediocre compared to the previous two months, compounded by generally declining raw material prices, negatively impacting market transactions. Meanwhile, as a semi-annual period, some firms conducted destocking to improve cash flow.

Overall downstream demand is expected to remain weak in July, but there may be phased restocking, with the market likely to recover slightly. Ternary cathode precursor production is projected to increase 1.14% MoM in July.

Ternary Cathode Material

In June 2025, SMM ternary cathode material production grew 0.93% MoM and surged 31.54% YoY. The industry's overall operating rate stood at 44%, slightly rebounding from May. By product structure, 5-series materials accounted for 14.76%, 6-series for 35.82%, 8-series for 31.74%, and 9-series for 15.28%. 5-series materials saw significant decline in its market share due to rising raw material costs and weakened performance competitiveness. 6-series materials continued expanding market share with balanced cost and performance advantages. 8-series materials, mainly for overseas NEV markets, showed a slight pullback in share as overseas auto sales missed expectations and hadn't entered peak season. 9-series materials maintained production growth in recent months due to order transfers. In the NEV market, raw material prices generally declined in June. Coupled with the impact of the semi-annual period, producers generally carried out destocking to optimize cash flow, and the sales performance of finished vehicles was mediocre. The demand in the consumer market was similarly mediocre, with some sectors experiencing a phased decline. Meanwhile, downstream battery cell manufacturers significantly drove down prices, leaving very limited profit margins for cathode material producers.

Looking ahead to July, the market may experience a phased recovery, but the extent of the recovery will be limited. It is expected that the production of ternary cathode material will increase by 1.31% MoM.

Iron Phosphate

In June, the domestic iron phosphate production increased slightly by 2% MoM and significantly by 56% YoY. On the supply side, enterprises maintained a stable production pace. Although a few enterprises underwent maintenance, it did not significantly impact the overall production. On the demand side, some downstream LFP enterprises saw an increase in orders, directly boosting the sales growth of upstream iron phosphate enterprises. Additionally, enterprises rushed to meet their mid-year sales targets and build momentum for business negotiations in H2, enhancing market activity. On the cost side, the prices of industrial-grade MAP and phosphoric acid remained stable in June. Although the price of ferrous sulphate increased, the overall cost fluctuation was relatively small. Due to the lack of cost support, iron phosphate prices continued to weaken, with some enterprises more actively reducing prices to ensure shipments.

In July, with the resumption of production after maintenance and the gradual release of capacity, iron phosphate production is expected to increase slightly. It is projected that production will increase by 4% MoM and 61% YoY in July.

LFP

In June, China's LFP material production increased by approximately 1.56% MoM. The operating rates of leading LFP material plants saw significant improvement. However, some small and medium-sized LFP plants experienced a slight decline in production due to the impact of weak demand from downstream battery cell manufacturers. From the perspective of application fields, some LFP material plants were affected by the active destocking of downstream passenger vehicle OEMs, leading to a slowdown in demand for power battery cells. This, in turn, led to a slight reduction in production of cathode materials used for power battery. The demand in the ESS sector remained strong. On one hand, battery cell manufacturers continued to rush to export. On the other hand, supported by relevant local policies in Europe and Australia, there was a significant increase in overall demand for energy storage.

Looking ahead to July, the performance of the NEV market is expected to remain weak. However, it is worth noting that the battery cells corresponding to some popular car models are undersupplied, which contrasts sharply with weak demand for battery cells used in other car models. The ESS market is expected to remain strong in July, driving overall industry growth.

LCO

In June 2025, LCO production decreased by 3% MoM and increased by 20% YoY. On the demand side, the 3C electronics consumer market was weaker than before, and the price trend of LCO was highly uncertain. Downstream battery cell manufacturers were more sensitive to raw material costs. Coupled with sufficient current inventory, this formed a certain suppression on market demand. On the supply side, LCO cathode plants adopted a sales-based production strategy and did not maintain excessive inventory. Therefore, actual production was slightly lower than the production schedule.

In July, downstream demand is expected to remain weak overall. Coupled with the shortage of raw materials, enterprises' production schedules will be more conservative. It is expected that LCO enterprises will continue to adhere to a sales-based production strategy in July, and production will be basically flat compared to June.

LMO

In June 2025, LMO production decreased slightly MoM. From the supply side, the production plans of leading LMO enterprises remained stable, and overall production fluctuations were relatively small. However, some small and medium-sized enterprises, lacking cost advantages, faced fierce market competition. Spot prices remained low, and profit margins were limited, leading most enterprises to choose to cut production or even suspend production. In addition, as downstream battery cell manufacturers basically only purchased for rigid demand and were unwilling to stock up in large quantities, market demand remained weak, failing to stimulate the production enthusiasm of LMO enterprises, resulting in a significant decline in total market supply.

It is expected that by July 2025, the activity of the downstream market may increase, and the number of inquiries may rise, thereby driving an MoM increase in the supply of LMO enterprises.

*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).