SMM September 30 news: China’s September Pr-Nd alloy production shifted from growth to decline MoM, ending five consecutive months of increases since April. According to SMM statistics, national Pr-Nd alloy production in September down 3.03% MoM and up 9.92% YoY. The core reason for the production decline was the squeeze from both prices and costs: according to SMM calculations, weekly net profit for Pr-Nd alloy remained negative for four consecutive weeks in September, with net margin at approximately -0.3% to -0.2%, leaving alloy enterprises in a persistent state of losses. The root cause of rising costs lies in the Pr-Nd oxide segment. In September, the weekly average price of Pr-Nd oxide rebounded from a low of 721,200 yuan/mt in late August to 735,125 yuan/mt in late September, while gross profit in the separation segment remained above 130,000 yuan/mt over the same period. Upstream supply growth was constrained by quotas and separation capacity, and the willingness to hold prices firm was strong, leaving alloy producers with limited bargaining room as raw material costs were rigidly passed through to the metal segment. This created a profit pattern of “fat upstream, thin midstream”—ample gross margins in the Pr-Nd oxide segment but negative net profit in metal processing. By region, September production cuts were concentrated in Inner Mongolia, Zhejiang, and Jiangxi. Top-tier players maintained normal operations supported by long-term contracts or processing orders and rigid production schedules, while alloy enterprises with a higher share of spot order retail sales faced stronger expectations for production cuts due to losses.
The demand side also failed to provide support. According to an SMM survey, industry-wide NdFeB blank production rose only 3.34% MoM in September, with the expected growth rate not climbing to 5.15% until October. The traditional September peak season did not materialize: end-use consumption remained weak, with limited growth in demand from automobiles, industrial motors, home appliances, and electromechanical products. Although inquiries from outside China were active, stricter export verification and longer procedures delayed actual shipments and revenue recognition. Combined with Pr-Nd alloy prices holding firm at high levels, motor and end-user enterprises tended to run low inventory and make just-in-time procurement only. Stockpiling demand is expected to be postponed and released in October, and the mild growth in September was more a time lag between order confirmation and production schedules than a weakening of demand. Pr-Nd alloy production in October is expected to decline further MoM, with losses yet to be repaired, and expectations for production cuts are relatively concentrated among alloy enterprises in Jiangxi, Sichuan, and Fujian. The key going forward lies in the mismatch in pace between upstream and downstream—magnetic material production schedules are expected to rise while alloy-side supply contracts; if both hold true, this will support the recovery of Pr-Nd prices and alloy producers' profits. In the medium term, attention should be paid to Pr-Nd oxide prices and overall supply growth, the extent to which magnetic material orders and operating rates materialize, and the pace of export verification progress. SMM will continue to track the recovery of Pr-Nd alloy operating rates and losses, as well as the actual progress of downstream magnetic material order fulfillment.
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