Shanghai, September 1 (SMM) – China's recycled praseodymium-neodymium (PrNd) oxide output rose 15.35% month on month in August, while its share of total PrNd oxide output rebounded to 39.5% from 37.7% in July. Output resumed its recovery trend, ending two consecutive months of decline. By region, Shandong and Jiangxi saw notable MoM gains: Shandong output rose 27.27% MoM and Jiangxi rose 16.04% MoM. The recovery in both regions was mainly driven by higher operating rates at leading local recyclers, which boosted recycled PrNd oxide output.
In terms of operating pace, this round of output recovery carries a distinct "build-up then release" feature. Although some scrap recyclers had arranged production maintenance earlier, they kept purchasing raw materials and maintained normal restocking during the shutdown period, leaving their current NdFeB scrap feedstock inventories relatively ample. After maintenance ended, companies were able to quickly ramp up operating rates and release output without waiting for a feedstock preparation cycle, contributing to the notable MoM rebound in recycled PrNd oxide output.
Notably, the bulk of this month's output increase came from leading large recyclers, while operating rates at small and medium-sized enterprises (SMEs) remained at relatively low levels. The reason is that the supply of compliant tax-inclusive scrap is currently tight, raising procurement costs for recyclers and squeezing profit margins across the recycling industry. Leveraging their technological advantages and higher tolerance for expensive scrap, leading recyclers—bolstered by feedstock inventories accumulated earlier—were the first to restore operating rates, thereby driving recycled PrNd oxide output up on a monthly basis.
On the whole, although August recycled PrNd oxide output recovered markedly on a MoM basis, both the output level and the 39.5% output share remained below the average of the first half of the year (with an H1 share of roughly 43.5%). The industry's overall operating rate stayed relatively low, further highlighting the divergence within the recycling sector: leading recyclers are recovering while SMEs remain under pressure.
Looking ahead, China's rare earth scrap recycling market is closely tied to "XT" invoices (special invoices for rare earths). The procurement threshold for compliant tax-inclusive scrap is relatively high, and scrap holders, weighing compliance costs, show little willingness to sell at low prices, making it difficult for the tight supply of tax-inclusive scrap to reverse in the near term. As the "golden September and silver October" demand peak season arrives, coupled with the still-tight supply of PrNd oxide, the price center of PrNd oxide is expected to move higher. This should strengthen scrap holders' willingness to sell, potentially increasing the availability of market-circulated tax-inclusive scrap and supporting continued growth in recycled PrNd oxide output. However, constrained by the overall tight supply of tax-inclusive scrap and its limited room to expand significantly in the near term, the incremental supply that can be released from the scrap side remains limited, so the increase in recycled PrNd oxide output is expected to be relatively modest.
![Aug recycled Pr-Nd oxide production up 15.35% MoM, highlighting recovery among top producers and pressure on smaller players [SMM Analysis]](https://imgqn.smm.cn/usercenter/QLmfa20251217171745.jpg)
