China's Pr-Nd Alloy Output Rises 3.74% MoM in July, Driven by Inner Mongolia Growth

Published: Jul 31, 2026 17:46

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China's Pr-Nd alloy output rose 3.74% MoM and 7.57% YoY in July, driven by stronger toll processing in Inner Mongolia. Tight Pr-Nd oxide supply raised raw material costs, squeezing margins and curbing output at some producers. Weak magnet demand cut downstream operating rates by 3% MoM, leaving the market oversupplied. In August, alloy output is expected to rise about 1% MoM, while magnet production may increase 2.65% MoM, improving market balance.

SMM, July 31: In July, China's Pr-Nd alloy production rose 3.74% MoM and 7.57% YoY. Regionally, in Inner Mongolia, some metal enterprises saw their operating rates improve significantly due to increased toll processing orders and relatively stable raw material supply, driving significant growth in the region's Pr-Nd alloy production. However, in Jiangxi, Shandong, Fujian, and other areas, as well as some metal enterprises in Inner Mongolia, tight spot supply of Pr-Nd oxide caused procurement costs to continue climbing, while Pr-Nd alloy transaction prices struggled to cover raw material costs, further squeezing profit margins for enterprises, with some even incurring losses, leading to a slight reduction in operating rates.
Overall, although production declined in many areas, the production growth from toll processing orders in Inner Mongolia effectively offset the production cuts, driving a rebound in total Pr-Nd alloy production in July on a MoM basis. However, the operating rate of downstream magnetic material enterprises fell 3% MoM in July, with order conditions being far from optimistic, and procurement demand for Pr-Nd alloy weakened accordingly, leading to an oversupply in the Pr-Nd alloy market in July. Although elevated raw material costs provided support for Pr-Nd alloy prices, with overall prices raised from June, the oversupply fundamentals limited any upside room, keeping the transaction side under pressure and market trading stagnant.
Looking ahead to August, expansion projects of some metal enterprises in Sichuan will be launched, expected to drive a MoM increase of about 1% in Pr-Nd alloy production. Meanwhile, as downstream demand gradually recovers, magnetic material enterprises are expected to see their production rise 2.65% MoM, which should bring some improvement to the supply-demand fundamentals for Pr-Nd alloy.

Pr-Nd alloy production Inner Mongolia oversupply raw material costs

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