SMM August 28 News: This week, Pr-Nd alloy prices first rose and then fell. In the middle of the week, prices were driven higher by a significant upward move in Pr-Nd oxide futures, but toward the weekend, they pulled back as the futures retreated. As of 17:00 Friday, spot Pr-Nd alloy was quoted at 880,000 yuan/mt, down 2,500 yuan/mt from Friday morning and essentially flat compared with last Friday (880,000 yuan/mt), ending two consecutive weeks of gains with a WoW change of zero.
Intra-week rally then pullback; Wednesday jumped 6,000 yuan/mt in a single day
Reviewing the weekly trend, Pr-Nd alloy prices showed a pattern of "first rising then falling": prices moved steadily at the start of the week, then edged down to 879,000 yuan/mt on Tuesday amid quiet inquiries. From Wednesday, driven by a noticeable uptick in Pr-Nd oxide futures, low-priced supply quickly tightened, and alloy producers raised quotes sharply under oxide cost support, jumping 6,000 yuan/mt in a single day. Prices continued to climb to a weekly high of 886,000 yuan/mt on Thursday. On Friday, as futures retreated, spot quotes pulled back, with morning levels at 882,500 yuan/mt and closing at 880,000 yuan/mt by 17:00. The weekly average was about 882,500 yuan/mt, up approximately 8,500 yuan/mt from last week's 874,000 yuan/mt, a WoW increase of 0.97%, with the overall price center moving higher.
Rising costs and negative margins weigh on alloy producers
On the cost-profit front, SMM weekly data show that this week's cash cost for Pr-Nd alloy was 882,859 yuan/mt, up 9,588 yuan/mt (or 1.1%) from last week's 873,271 yuan/mt, mainly due to a higher Pr-Nd oxide price center and rising raw material costs. Based on the weekly average, the net profit per mt was about -1,859 yuan/mt, with a net margin of about -0.2%, significantly wider than last week's loss of -771 yuan/mt. Although prices briefly surged mid-week, improving margins, costs rose even faster, further highlighting the cost-inversion pressure on alloy producers.
Outlook
In the short term, on the demand side, as motor manufacturers gradually end their "summer breaks" and the traditional September-October peak season approaches, leading magnetic materials companies have positive expectations for order production schedules. The market still holds strong expectations for downstream restocking and stockpiling. However, given that alloy producers are still under cost-inversion pressure and their quotes remain volatile with the futures market, attention should be paid to whether peak-season demand expectations can materialize, as well as the pace of new Pr-Nd oxide capacity additions. Pr-Nd alloy prices are expected to fluctuate within a range.
