SMM, September 1 — China's praseodymium-neodymium (PrNd) market opened high and trended lower through August before stabilising at month-end, with monthly declines of more than 2.7% in both PrNd oxide and PrNd metal. Entering September, as the supply side contracts and the traditional "Golden September, Silver October" peak demand season approaches, PrNd oxide supply is set to tighten relatively, lending support to prices — though the pace at which peak-season demand actually materialises remains uncertain.
I. August Review: PrNd Rallied Then Retreated
Prices traced a four-stage "rally → bottoming → rebound → pullback" path through the month. PrNd oxide touched its monthly high of 748,000 CNY/mt on August 3, then fell rapidly to a low of 715,000 CNY/mt on August 13 as the futures market retreated and off-season demand weighed. Mid-month, tightening availability of low-priced material and firmer offers from holders allowed prices to stabilise in a narrow range. In the latter part of the month, restocking by major producers and a recovering futures market fuelled a rebound to 733,500 CNY/mt. At month-end, limited downstream acceptance of higher prices and cautious purchasing, together with renewed futures weakness, pulled prices back to 727,500 CNY/mt, where they held, with actual transactions largely deadlocked.
II. Supply and Demand: Supply Rises Notably as Off-Season Demand Weighs
Supply growth was significant. China's PrNd oxide output rose by around 10% MoM in August. By supply structure, the increase came mainly from the scrap recycling segment — recycled PrNd oxide output grew by around 15% MoM, markedly faster than total output, while primary ore separation output rose by only about 6.7% MoM, a relatively limited addition. Although scrap recyclers had scheduled maintenance shutdowns earlier, they did not halt feedstock procurement during those periods, leaving inventories relatively ample. Combined with a broad view that September prices would rise — making higher output profitable — recyclers rapidly lifted operating rates once maintenance ended.
On the metal side, China's PrNd metal output grew 1.13% MoM and 13.05% YoY in August, marking a sixth consecutive month of MoM growth. By region, the commissioning of second-half expansion projects in Sichuan lifted operating rates noticeably, with the province's output up 12.16% MoM — the core driver of the August increase in national output.
Demand remained at the tail of the off-season. NdFeB magnets saw a transitional pattern in August of "modest overseas gains, no domestic turnaround," with only slight marginal improvement in exports and no substantive reversal in domestic sales. In mid-August, high temperatures and heavy rain across several regions forced some permanent-magnet motor plants to halt for maintenance and cut operating rates. Magnet makers booked mostly small-volume, just-in-need orders and showed little willingness to restock actively; leading producers relied on long-term contracts to maintain their base volume, while the industry as a whole postponed restocking.
Surplus persisted on the metal side. According to SMM data, the supply surplus in PrNd metal widened further in August compared with July. Pressured by the continued surplus, PrNd metal lacked upward momentum, and with cost inversion persisting, trading in the metal market remained deadlocked.
III. September Outlook: PrNd Oxide Supply to Tighten Relatively; Prices Likely Range-Bound but Firm
Supply set to tighten relatively. For PrNd oxide, a marked recovery in operating rates at primary ore separators may only gradually materialise around October, meaning near-term supply growth will remain dominated by the scrap recycling segment. With recyclers steadily drawing down feedstock inventories accumulated earlier, total supply growth looks limited and PrNd oxide supply is likely to be relatively tight in September. On the metal side, some producers in Inner Mongolia have cut operating rates slightly on reduced processing orders, and September PrNd metal output is forecast to fall by about 0.56% MoM — the first MoM decline since March. In addition, the actual pace of new PrNd oxide capacity coming on stream still warrants attention.
Peak-season demand expectations improve. With the traditional "Golden September, Silver October" peak season approaching, magnet makers' order and production schedules look promising, and procurement demand for PrNd is expected to recover gradually. In the final week of August, most downstream motor plants and end-users resumed operations and the frequency of overseas order enquiries increased, though actual order volumes remained relatively limited.
Price outlook. Taken together, relatively tight PrNd oxide supply in September, combined with tightening availability of low-priced material, stronger holding sentiment among suppliers and a recovering futures market, should keep prices range-bound but firm. For PrNd metal, as the supply side contracts and demand recovers in tandem, the surplus pressure seen since August is expected to ease somewhat from earlier levels, offering prices a measure of fundamental support.
Key uncertainties to watch: first, whether magnet makers' order and production schedules are actually delivered — if peak-season demand falls short, the scope for price gains will be limited; second, the pace at which new PrNd oxide capacity is released on the cost side — if raw material supply loosens, metal producers' offers may come under pressure; and third, the transmission effect of the futures market onto the spot market.
It is worth noting that this year's "Golden September, Silver October" faces the possibility of a delayed delivery window. In past years, the peak season depended on a genuine build-up of downstream orders and restocking from mid-August through September. This year, however, output in core downstream sectors already fell in July and only modest overseas gains appeared in August. If the signal for concentrated restocking emerges later than usual, September may not immediately see orders and prices rise in tandem — the strength of "Golden September" could be diluted, and "Silver October" may slip into an even later, more gradual recovery. SMM will continue to track changes in PrNd supply and demand, price trends, and the delivery of magnet makers' orders.
![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)
