In October 2025, China's NdFeB magnetic material production decreased by approximately 5% MoM. This round of production contraction was mainly driven by a combination of factors, including declining prices, fewer effective working days, adjustments to export policies, and changes in external news sentiment toward the month-end. However, spurred by positive news developments and active stockpiling, NdFeB production is expected to rebound against the trend in November, with an estimated increase of around 10% MoM.
October Market Review: Multiple Pressures Led to Production Contraction
In October, NdFeB production decreased by approximately 5% MoM. This round of production contraction was mainly influenced by multiple intertwined factors, including falling prices, fewer effective working days, adjustments to export policies, and changes in external news towards the month-end.
At the beginning of the month, raw material prices such as Pr-Nd oxide and Pr-Nd alloy showed a clear downward trend, leading to strong bearish market sentiment. This resulted in significant wait-and-see sentiment among motor and end-user customers, and new orders for magnetic material enterprises remained weak.
Additionally, the National Day holiday led to a reduction in actual working days, and the export control policy issued on October 9 further dampened market confidence, resulting in overall low trading activity for magnetic materials. Entering the final week of the month, as news emerged of China and the United States reaching an agreement on rare earth issues, market confidence was boosted.
November Outlook: Positive Factors Drive Production Rebound
Influenced by market news, the prices of Pr-Nd raw materials have fluctuated significantly, leading to strong bullish sentiment among some end-users, who have recently begun inquiries and placed orders. However, as most enterprises had largely finalized their October orders, production has generally been concentrated in November.
According to the SMM survey, except for a small number of magnetic material enterprises capable of producing small batches of new orders in October, the vast majority of magnetic material plants are queuing up for production of newly signed orders. The new orders signed in the last week of October laid the foundation for November's production.
Additionally, policy changes in the domestic new energy vehicle sector in November are expected to boost production, and with no holidays in November, stockpiling in some industries will also take place during this period. These factors collectively contribute to an expected 10% MoM increase in November production.
Analysis of Demand Structure: Domestic Demand Leads, Exports Lag
It is noteworthy that the increase in production does not imply an immediate rise in exports. Due to the extremely long shelf life of NdFeB finished products, feedback from some magnetic material enterprises indicates that the recent wave of rapid orders from end-users primarily consists of defensive measures by domestic motor enterprises in anticipation of future raw material price increases, rather than actual demand orders from European and American companies.
Even if European and American companies choose to place orders now, constrained by the Christmas holiday in December, they typically opt for delivery in January of the following year. This suggests that the current rebound in production is mainly driven by domestic defensive procurement, and a substantial recovery in the export market will still take time.
