SMM publishes China's monthly production data for various metals around the 10th of each month. It aims to uncover the true fundamentals from the essence, helping industry chain participants and investors grasp the future trends of the metals market more clearly.
Overview of China's Metals Production in November 2024 and Forecast for December
Copper Cathode
In November, SMM China's copper cathode production increased by 9,400 mt MoM, a rise of 0.94%, up 4.61% YoY, and exceeded expectations by 24,200 mt. Cumulative production from January to November increased by 524,400 mt or 5.02% YoY. In November, we added two new survey samples with a combined capacity of 350,000 mt/year, bringing the total surveyed capacity to 14.875 million mt/year.
One reason for the significant increase in November copper cathode production was the addition of two new surveyed companies. Excluding these two, the production only slightly increased from the original estimate. Despite the spot order TC for copper concentrates remaining at historical lows in November, with the SMM Imported Copper Concentrates Index (monthly) at $10.38/mt as of November 29, up $0.24/mt MoM, the increased supply of blister copper and copper anode boosted smelter production enthusiasm. As of November 29, SMM Blister Copper RCs in South China (monthly) was 1,050 yuan/mt, up 300 yuan/mt MoM. Additionally, the accelerated commissioning of new smelters also contributed to the higher-than-expected production.
In summary, the sample operating rate for the copper cathode industry in November was 80.44%, down 0.75 percentage points MoM. The operating rate for large smelters was 84.8%, up 1.17 percentage points MoM; for medium smelters, it was 70.38%, down 6.69 percentage points MoM; and for small smelters, it was 71.02%, up 2.17 percentage points MoM. The operating rate for smelters using copper concentrates was 83.6%, down 1.1 percentage points MoM, while for those not using copper concentrates (using copper scrap or copper anode instead), it was 75.6%, up 11.4 percentage points MoM.
Entering December, smelters that had previously undergone maintenance (SMM statistics show that seven smelters with a combined smelting capacity of 1.99 million mt underwent maintenance in November) gradually resumed production, contributing an additional 51,400 mt. Only three smelters are scheduled for maintenance in December, which is one reason for the significant increase in December production. Additionally, smelters newly put into operation continued to accelerate their production, contributing an additional 34,900 mt. Lastly, some smelters increased production in December to meet their annual production plans.
Based on the production schedules of various companies, SMM expects December domestic copper cathode production to increase significantly by 81,700 mt MoM, a rise of 8.13%, and up 87,400 mt YoY, a rise of 8.75%. Cumulative production from January to December is expected to increase by 611,800 mt or 5.35% YoY. The sample operating rate for the copper cathode industry in December is expected to be 86.86%, up 6.43 percentage points MoM. The operating rate for large smelters is expected to be 91.03%, up 6.23 percentage points MoM; for medium smelters, it is expected to be 78.56%, up 8.17 percentage points MoM; and for small smelters, it is expected to be 73.2%, up 2.18 percentage points MoM. The operating rate for smelters using copper concentrates is expected to be 90.70%, up 7.1 percentage points MoM, while for those not using copper concentrates (using copper scrap or copper anode instead), it is expected to be 79.5%, up 3.9 percentage points MoM, with the copper scrap supply increasing for three consecutive months. Finally, we expect January 2025 production to decline again (as some smelters will reduce production load due to the upcoming Chinese New Year holiday) but remain above 1 million mt.
Aluminum
According to SMM statistics, in November 2024 (30 days), domestic aluminum production increased by 2.74% YoY, and cumulative production from January to November 2024 increased by 3.86% YoY. In November, some domestic aluminum smelters underwent pot maintenance due to high pot age and winter environmental protection-related controls requiring production cuts. There have been announcements of production cut plans, coupled with increased alumina cost pressures, leading some enterprises to plan maintenance. During the month, resumption or new projects in Sichuan, Xinjiang, and other regions continued to progress, with daily aluminum production in November only slightly increasing MoM. The proportion of casting ingots in north-west China and other regions increased, while the proportion of liquid aluminum decreased by 0.6 percentage points MoM, remaining flat YoY. Based on SMM's liquid aluminum proportion data, the casting ingot volume in November increased by 2.93% YoY to approximately 956,500 mt.
Capacity Changes: As of the end of November, SMM statistics show that the existing capacity of domestic aluminum smelters was about 45.71 million mt, with an operating capacity of approximately 43.68 million mt, and the industry's operating rate increased by 0.46 percentage points YoY to 95.56%. Currently, domestic aluminum smelters show mixed changes in operating capacity, with increases mainly from the ramp-up of new projects in a Xinjiang aluminum smelter and the resumption of production in Sichuan and Guizhou regions. Decreases mainly come from partial production cuts in a Henan aluminum smelter due to environmental protection requirements and technical maintenance in Chongqing and Guangxi regions.
Production Forecast: Entering December 2024, the ramp-up of new capacities and capacity resumptions are expected to further increase domestic aluminum operating capacity. However, a Guangxi aluminum smelter's pot maintenance is expected to affect 100,000 mt/year capacity, and small-scale pot maintenance in Sichuan and Chongqing aluminum smelters is anticipated. Therefore, the overall increase in operating capacity in December is expected to slow down, with SMM forecasting that the annualized operating capacity will reach 43.69 million mt/year by the end of December. December will enter the traditional off-season, coupled with previous export rush depleting some December orders, leading to weaker downstream demand and production cuts in some billet plants. The proportion of liquid aluminum is expected to adjust to around 72% in December. Continued attention is needed on the changes in aluminum capacity in various regions and the operating conditions of downstream sectors such as aluminum billets.
Alumina
According to SMM data, in November 2024 (30 days), China's metallurgical-grade alumina production increased by 0.71% MoM and 8.80% YoY. As of December 6, China's metallurgical-grade alumina existing capacity was about 103.02 million mt, with actual operating capacity increasing by 3.24% MoM, and the operating rate was 86.63%. From January to November 2024, domestic metallurgical-grade alumina cumulative production increased by 4.41% YoY. This was mainly due to the rush to meet deadlines at multiple domestic alumina refineries in November to meet downstream aluminum demand, coupled with the resumption of capacity that was shut down in October due to environmental protection and equipment maintenance, leading to a record high in domestic operating capacity.
(Note: SMM revised the existing capacity of China's metallurgical-grade alumina during this survey period)
December Forecast: Entering December, domestic alumina refineries are expected to maintain high production levels. SMM has learned that only a few enterprises are considering small-scale maintenance in December, and the operating capacity of domestic metallurgical-grade alumina is expected to be 89.29 million mt/year. On the raw material side, there is no further news on the resumption of domestic ore production, and supply remains tight. Regarding imported ore, as of November 29, the total weekly port arrivals of bauxite at domestic ports were 3.7287 million mt, up 502,700 mt from the previous week. The total weekly port departures of bauxite from major ports in Guinea (including Boffa Port) were 3.5721 million mt, up 958,300 mt from the previous week. The total weekly port departures of bauxite from major ports in Australia were 1.0547 million mt, up 54,600 mt from the previous week. Therefore, in terms of trends, the shipment volume of bauxite from Guinea in October and November has significantly rebounded compared to the rainy season from July to September, but it has not yet stabilized to pre-rainy season levels, still limiting the increase in alumina operating capacity. SMM expects China's metallurgical-grade alumina daily average production to remain stable MoM in December 2024. Future attention should be paid to the pace of new and resumed alumina capacity releases.
Overseas Aluminum
According to SMM statistics, in November 2024 (30 days), overseas aluminum production slightly increased by 0.4% YoY, with an average operating rate of 87.7%, up 0.1% MoM and 1% YoY. Cumulative production in 2024 increased by 1.0% YoY.
New Zealand's Tiwai Point aluminum smelter ended power rationing and production cuts in September and is currently in the process of resuming production, with a total capacity of 125,000 mt to be resumed. Full production is expected to be restored by February next year, and the current capacity utilization rate of the plant is about 75%. Additionally, the second phase of a 250,000 mt aluminum smelter project in Indonesia was put into operation in October, but subsequent commissioning progress has been delayed due to cost factors. As of November 2024, the commissioning scale of the project was only 30,000 mt, and the specific commissioning time for the remaining capacity is yet to be determined. The total capacity of the plant will reach 500,000 mt after full commissioning.
Looking ahead, SMM expects overseas aluminum production in December 2024 (31 days) to slightly increase by 0.6% YoY, with an average operating rate of about 87.7%, up 0.1% MoM and 1.1% YoY. However, on November 26, 2024, Rusal announced that due to the surge in global alumina prices and weak domestic aluminum demand, it would cut annual production by 6%, or 250,000 mt per year. The specific plants and timeline for the production cuts have not yet been announced, but this will be a potential reduction in future overseas aluminum production.
Overseas Metallurgical-Grade Alumina
According to SMM statistics, in November 2024 (30 days), overseas metallurgical-grade alumina production decreased by 1.2% YoY, and cumulative production in 2024 decreased by 0.6% YoY. In November, the average operating rate of overseas alumina refineries was 80.9%, up 0.6% MoM but down 4.1% YoY. On November 25, Rio Tinto announced that it had lifted the force majeure on alumina shipments from Gladstone, Australia, stating that QAL and Yarwun had recovered from the incident, and current production had returned to normal. Under the impact of this event, the two plants are expected to reduce production by a total of about 250,000 mt YoY this year. Additionally, on October 11, EGA announced that Guinea had stopped exporting bauxite from GAC, and the export ban has not yet been lifted. The shortage of bauxite supply may affect the normal production levels of EGA's Al Taweelah alumina refinery, and the specific situation needs to be continuously monitored.
Looking ahead, overseas metallurgical-grade alumina production is expected to decrease by 0.7% YoY in December, with an average operating rate of about 81.5%.
Primary Lead
In November 2024, the national production of primary lead continued its upward trend, increasing by 3.91% MoM and 9.55% YoY. From January to November 2024, the cumulative production of primary lead decreased by 2.95% YoY. The total capacity of surveyed enterprises in 2024 was 6.0063 million mt.
According to the survey, in November, the production resumption and new capacity of primary lead smelting enterprises occurred simultaneously. Coupled with the strengthening lead prices, this boosted the production enthusiasm of smelting enterprises, resulting in a higher production increase than forecasted in the previous period. Specifically, smelting enterprises in Hunan and Henan resumed production after maintenance. Additionally, due to rising lead prices, some enterprises that originally planned maintenance in November postponed or completed maintenance earlier. Furthermore, new projects in Qinghai smelting enterprises were in the ramp-up phase. In November, lead concentrate enterprises saw a production recovery, leading to a temporary increase in supply. Combined with the completion of winter stockpiling by some smelting enterprises, lead concentrate TC in some regions showed signs of stabilization and rebound, providing certain conditions for increased production by smelting enterprises.
Looking ahead to December, based on the production schedules of major smelting enterprises, SMM forecasts that national primary lead production is expected to show a slight decline, with a MoM decrease of 0.63%. The main reasons for the expected decline in December are the planned maintenance of smelting enterprises in Hunan, Guangdong, and Yunnan, including routine year-end maintenance and equipment upgrades, which will drag down the monthly primary lead production. Meanwhile, new capacity in Qinghai smelting enterprises still has room for production ramp-up. Some smelting enterprises that reduced production in November due to declining ore grades plan to recover this month. Additionally, the strong performance of lead prices in early December and improved lead profits may stimulate the production enthusiasm of smelting enterprises, leaving the possibility of a slight increase in December primary lead production.
Secondary Lead
In November 2024, the production of secondary crude lead significantly increased, up 3.19% MoM, but decreased 28.29% YoY. The production of secondary refined lead rose by 2.72% MoM, but fell by 31.39% YoY. In October, many secondary lead smelters were heavily affected by environmental protection-related controls and equipment maintenance, leading to severe production cuts and shutdowns. In November, production mainly recovered. Additionally, lead prices fluctuated at highs throughout November. In early November, the price of battery scrap did not follow the lead price increase significantly, greatly restoring the profits of secondary lead enterprises, which led to a significant increase in production in late November. December is a traditional maintenance season, and some smelters plan to shut down for maintenance at the end of the month. However, most enterprises expect to increase production due to still favorable profits. Some large secondary lead smelters in Shandong and Jiangxi provinces will resume production, contributing to the main increase in refined lead production in December. A large smelter in Inner Mongolia limited its production in mid-to-late November due to equipment failure but will return to normal in December. Overall, the production of secondary lead is expected to maintain an upward trend in December, but we need to pay attention to the tight supply of battery scrap and the impact of severe winter weather on the production increase.
Refined Zinc
In November 2024, SMM China's refined zinc production increased by over 1,000 mt or more than 0.3% MoM, but decreased by nearly 12% YoY, exceeding the expected value. From January to November, domestic refined zinc production totaled over 5.6 million mt, with a cumulative YoY decrease of nearly 6%. Entering November, domestic smelter production slightly increased, mainly because the reduction at smelters in Henan, Gansu, Sichuan, and Inner Mongolia was lower-than-expected. Additionally, the major increase in production came from the higher-than-expected production in Qinghai, Inner Mongolia, Xinjiang, Hunan, and Shaanxi. Overall, production was significantly higher than expected. SMM expects that in December 2024, domestic refined zinc production will increase by over 20,000 mt MoM or about 5% MoM, with the cumulative domestic refined zinc production in 2024 decreasing by more than 6% YoY. Overall, December smelter production is expected to increase significantly, mainly because, except for minor reductions caused by maintenance in Hunan, Sichuan, and Xinjiang, other regions such as Inner Mongolia, Shanxi, Qinghai, Hunan, and Gansu will see varying degrees of production recovery and year-end production increases. Overall, December production is expected to exceed expectations. Additionally, based on the current production schedule of enterprises, smelter production in January 2025 is also expected to remain high.
Refined Tin
Based on SMM processed data from market exchanges, China's refined tin production in November 2024 increased slightly by 1.1% YoY and rose significantly by 9.1% MoM. With the supply of scrap replenished in November, the total production of tin ingots showed a moderate growth trend.
In Yunnan, the quantity of tin ore imported from Myanmar remained low, resulting in continued pressure on local raw material supplies. Most smelting enterprises maintained their current production scale or slightly reduced output. If the tin ore ban in Myanmar persists, it is expected that the production of smelting enterprises in Yunnan will continue to decline.
Meanwhile, smelting enterprises in Jiangxi have actively adopted strategies to address raw material supply challenges, such as expanding the procurement channels for rap tin scrap. Thanks to the seasonal release of some industry scrap, some smelting enterprises had relatively sufficient raw material supplies in November, achieving a slight increase in production. However, given the seasonal impact on scrap supply, it is difficult to maintain the current level, and it is expected that the production schedule of smelting enterprises in Jiangxi will be slightly adjusted downward. In Inner Mongolia and Guangxi, smelting enterprises' production activities remained stable. However, in Anhui and other regions, due to increased difficulty in obtaining raw materials, the production of smelting enterprises was somewhat affected, and it is expected that maintaining future production levels will face challenges.
Considering the above factors, we forecast that in December, the national production of tin ingots may see a slight decline. Given the ongoing uncertainty regarding tin ore imports from Wa State in Myanmar and the increasing prominence of raw material supply issues for smelters, market participants need to remain highly vigilant and closely monitor the latest developments in the raw material market to respond promptly to potential market fluctuations.
Refined Nickel
In November 2024, the national production of refined nickel increased by 0.4% MoM and 33.64% YoY. The industry's monthly operating rate was 71.53%, basically flat compared to the previous month. Throughout the month, the national production of refined nickel saw a slight increase MoM, mainly driven by the continuous production expansion of top-tier enterprises.
In November, the macro disturbances caused by Trump's inauguration and the US Fed's interest rate cut led to some favourable macro sentiment, which was successfully reflected in the futures market. However, the continuous inventory buildup both domestically and internationally, the loosening of Indonesian nickel ore premiums and prices in December, and the ongoing production expansion by top-tier refined nickel enterprises created a significantly bearish fundamentals outlook. The favourable macro factors were quickly digested multiple times, resulting in overall volatile nickel prices. Looking ahead, export profitability still has considerable room for growth. Enterprises with overseas delivery qualifications are likely to continue increasing production to seize profitable opportunities. It is expected that in December 2024, the national production of refined nickel will increase by 2.4% MoM and 27.68% YoY.
NPI
In November 2024, the national NPI production increased by approximately 8.64% MoM in physical content and by about 3.11% MoM in metal content. Both physical content and metal content continued their upward trend in November, mainly due to the resumption of production at smelters in north China after maintenance, which slightly boosted high-grade NPI production. Additionally, the price of high-grade NPI weakened due to the negative feedback from the decline in stainless steel prices. Coupled with a slight increase in nickel ore prices as the Philippines entered the rainy season, smelters suffered expanded losses. However, the high stainless steel production provided some support for demand, and traditional smelters maintained stable production. Another source of growth was the low-grade NPI production from integrated 200-series stainless steel mills. The 200-series production increased by 3.75% MoM in November, exceeding 1 million mt, strongly supporting the demand for low-grade NPI.
In December 2024, the national NPI production is expected to increase by approximately 2.13% MoM in physical content and by about 2.25% MoM in metal content. According to the SMM survey, integrated stainless steel mills in east China are expected to slightly increase their production schedule in December, pushing up the production of high-grade NPI. Leading integrated 200-series stainless steel mills are also expected to continue increasing their production schedule, with low-grade NPI production potentially rising by about 2.07% MoM compared to November. Overall, traditional smelters are expected to maintain stable production amid the downtrend in high-grade NPI prices and uptrend in stainless steel production, with growth mainly coming from integrated stainless steel mills.
Indonesian NPI
In November 2024, the production of Indonesian NPI continued to rise by 1.07% MoM and 4.2% YoY. The cumulative production for 2024 was up 7.0% YoY. On the supply side, the Indonesian domestic trade laterite nickel ore market continued to show a marginally easing trend in November, with the premiums steadily declining. Along with the decline in Indonesian domestic trade laterite nickel ore prices and the easing supply side, the supplementary supply of Philippine laterite nickel ore to the Indonesian nickel market also significantly decreased during the month. On the demand side, some RKEF production lines, which were initially expected to complete new commissioning within the year, did not proceed as scheduled, and the overall commissioning pace of new projects in the market is still slowing down. However, the overall production still saw a slight increase due to changes in costs and other factors. Additionally, influenced by the overall downward fluctuation of LME nickel prices, the drive for switching to high-grade nickel matte production in Indonesia continued to weaken. Coupled with the further highlighted cost advantages of Indonesian NPI smelting compared to domestic production, there remains some upside room for Indonesian NPI production.
It is expected that in December, Indonesian NPI production will rise by 1.05% MoM and 4.2% YoY, with cumulative production up 6.7% YoY.
Nickel Sulphate
In November 2024, national nickel sulphate production reached 30,800 mt in metal content, or 139,900 mt in physical content, up 7.2% MoM but down 13.1% YoY. Demand side, precursor enterprises' production in November exceeded expectations, with the main increase coming from some top-tier enterprises ramping up production based on downstream demand, further driving the growth of nickel salt demand. However, due to the intensified losses at salt plants and relatively sluggish market transactions during the early December procurement period, some salt plants have started to reduce or halt production for maintenance. Therefore, national nickel sulphate production in December 2024 is expected to drop to 30,000 mt in metal content, or about 136,500 mt in physical content, down 2.47% MoM and 0.12% YoY.
Battery-Grade Manganese Sulphate
In November 2024, China's production of high-purity manganese sulphate increased slightly MoM but showed a significant YoY decline. Some enterprises, which experienced temporary production halts in October caused by environmental protection inspections in Guangxi, have now resumed normal production, leading to an increase in market supply. However, some enterprises hold a pessimistic outlook on the future market, adopting conservative production plans and choosing to reduce production to avoid surplus inventory. Overall, market supply remains lower than in 2023. It is expected that as year-end approaches, the demand from downstream ternary cathode precursors may stabilize, with most orders being long-term contracts and fewer spot purchases. Consequently, China's production of high-purity manganese sulphate is expected to decrease slightly.
Electrolytic Manganese Dioxide
In November 2024, China's production of electrolytic manganese dioxide (EMD) saw a slight decline MoM. The primary reason for the decrease in November was the gradual stabilization of the primary battery market but a slight drop in demand for carbon-zinc and alkaline-manganese EMD, leading to reduced production plans by enterprises. The secondary battery market also struggled to see demand growth, and companies generally reduced the production of lithium-manganese EMD, resulting in a tight market supply overall. It is expected that by December, the downstream market will remain mediocre, and with the year-end approaching, companies will primarily focus on destocking, leading to more cautious production arrangements. Consequently, production is expected to decline again MoM.
Mn3O4
In November 2024, China's Mn3O4 production saw a slight decline MoM. The LMO market is currently in a destocking phase. Coupled with the previous price drop, market sentiment is relatively pessimistic, leading to a reduction in the procurement volume of raw materials. This trend has resulted in a downward adjustment in the production plans of battery-grade Mn3O4 enterprises. It is expected that by December, the LMO market will further weaken, and the production of battery-grade Mn3O4 may continue to decline. Meanwhile, the electronic-grade market is facing an oversupply situation, causing enterprises to be more cautious in their production. Overall, it is anticipated that China's total production of Mn3O4 will further decrease in December.
High-carbon Ferrochrome
According to SMM data, the national production of high-carbon ferrochrome further declined to 707,600 mt in November 2024, down 41,000 mt MoM, a decrease of 5.54%; up 36,700 mt YoY, an increase of 5.54%. Among them, the production in Inner Mongolia was 530,000 mt, up 16,000 mt MoM, an increase of 3.11%. In November, the bidding prices for high-carbon ferrochrome by mainstream stainless steel mills continued to fall, exacerbating the losses for ferrochrome manufacturers and significantly reducing their production willingness. Sichuan officially entered the dry season, leading to a noticeable increase in production cuts or shutdowns among ferrochrome manufacturers in the region; other manufacturers in south China also experienced concentrated production cuts due to cost pressures. However, large ferrochrome manufacturers in Inner Mongolia, due to lower costs and relatively small losses, maintained production to sustain cash flow and comply with power agreements. As a result, the overall national ferrochrome production only slightly declined.
The national production of high-carbon ferrochrome in December is expected to be 595,000 mt, a decrease compared to November. Recently, the procurement prices for high-carbon ferrochrome by mainstream stainless steel mills have significantly dropped, coupled with high costs of imported raw materials, leading to increased losses for ferrochrome manufacturers. Additionally, the supply surplus in the ferrochrome market has resulted in low purchasing enthusiasm downstream, causing difficulties in sales for ferrochrome manufacturers, with some already halting production outside of long-term contracts. Facing expanding losses, the ferrochrome market holds a pessimistic outlook for the future, and it will be challenging to digest the surplus inventory in the short term. Even in Inner Mongolia, where costs are relatively low, there have been frequent reports of production cuts. It is expected that due to cost and sales pressures, ferrochrome production will further decline.
Stainless Steel
According to the SMM survey, the total stainless steel production in China in November 2024 decreased by approximately 0.07% MoM and increased by about 2.98% YoY. The cumulative production grew by 3.33% YoY. Among them, the production of 200-series stainless steel increased by about 3.75% MoM, 300-series increased by about 2.36% MoM, and 400-series decreased by about 13.35% MoM.
Entering the off-season in November, the operating rate of downstream sectors and the order volume of stainless steel mills overall declined. For the 200-series, the stabilization of 200-series prices after a period of decline, coupled with the drop in prices of raw materials such as stainless steel scrap led to the resumption of 200-series stainless steel mills in south China and the switch to 200-series production in southwest China, resulting in a significant increase in 200-series stainless steel production. For the 300-series, due to the high prices of NPI and the weakening of finished product prices in November, the production of small and medium-sized non-integrated stainless steel mills in China saw a certain production reduction. However, large steel mills with integrated cost advantages and ample funds maintained a relatively high operating rate. Notably, a large stainless steel mill in south China added new steelmaking capacity in November, leading to a substantial increase in production. For the 400-series, a stainless steel mill in east China halted 400-series production and switched its capacity to plain carbon steel. Additionally, a large state-owned steel mill in south China reduced 400-series stainless steel production by tens of thousands of mt due to maintenance and the impact of finished product prices, resulting in a significant decline in total 400-series stainless steel production.
Entering December, the downstream demand for stainless steel remains weak due to the off-season. On the raw material side, the prices of NPI, high-carbon ferrochrome, and stainless steel scrap have all seen significant declines. Furthermore, some stainless steel mills may schedule maintenance and production cuts in January. To ensure stable billet supply, they make higher production schedules in December. Overall, it is expected that the 200-series production will decrease by 1.85% MoM in December; for the 300-series, new capacity will continue to ramp up, and with the reduction in costs, the production schedule of stainless steel mills will increase, resulting in a 6.25% MoM growth; for the 400-series, the resumption of 400-series production lines in south China and other stainless steel mills filling the market share of halted mills will lead to an overall production increase of about 10.74% MoM.
EMM
According to SMM data, China's EMM production in November 2024 increased by approximately 8.4% MoM and 7.9% YoY. The cumulative production grew by about 11.2% YoY. The primary reasons for the production increase in November were the reduction in power costs and the rise in export orders, which led to higher operating rates in Guangxi and the Manganese Triangle Region (Chongqing Xiushan, Hunan Huayuan, Guizhou Songtao). Additionally, several EMM plants in Guangxi and Guizhou resumed production, while the operating rates of EMM plants in other regions remained stable. Consequently, the overall EMM production showed a significant increase. Currently, EMM prices have slightly rebounded due to the price hikes of other manganese products and the growth in export demand. Moreover, some EMM plants in Sichuan are expected to resume production. Therefore, it is anticipated that EMM production in December will see a slight increase, up approximately 0.9% MoM.
SiMn Alloy
According to SMM data, China's total production of SiMn alloy in November 2024 increased by approximately 4% MoM but decreased by over 20% YoY. From January to November 2024, China's cumulative SiMn alloy production decreased by over 8% YoY. The moderate bidding prices by steel mills, coupled with positive news stimuli, led to a high operating rate of producers in north China. Although some manufacturers halted furnaces for maintenance, overall, the increase in SiMn alloy production in north China outweighed the decrease. In south China, due to production pressure, the resumption of SiMn alloy production was slow, with some plants in Guangxi slightly reducing production, while some in Guizhou resumed production. Overall, the total national SiMn alloy production in November showed an increase.
In December, some SiMn alloy plants plan to conduct maintenance at year-end, leading to a slight decline in the operating rate. Additionally, manganese ore inventory at southern ports remained low, and miners' sentiment to stand firm on quotes was strong, with manganese ore prices expected to rise. Due to the increase in raw material costs, some SiMn alloy plants in south China are expected to halt production due to increased production pressure. Therefore, the overall SiMn alloy production in December is expected to decrease.
Silicon Metal
According to SMM statistics, China's silicon metal production in November decreased by 65,100 mt, down 13.9% MoM, and slightly increased by 0.3% YoY. From January to November 2024, cumulative production increased by 1.116 million mt, up 32.3% YoY.
The significant MoM decrease in November was mainly due to increased costs from higher electricity prices amid the dry season in Sichuan and Yunnan combined with the sluggish silicon prices. The combined MoM reduction in Yunnan and Sichuan was around 65,000 mt. Additionally, some silicon enterprises in Fujian, Chongqing, and other regions also reduced production. The operating rate of northern silicon enterprises was basically stable, maintaining at a high level.
Entering December, silicon metal production is expected to be significantly reduced again. On one hand, the operating rate of silicon enterprises in Sichuan and Yunnan is expected to weaken further, with Sichuan's production expected to fall below 10,000 mt in December and Yunnan's monthly production to hit a three-year low. On the other hand, top-tier enterprises in Xinjiang experienced two rounds of significant production cuts in early December, which are expected to have a substantial impact on the supply for the month. In terms of production increase, a few silicon enterprises have new electric arc furnaces, contributing a small amount of increase. Overall, the production schedule for silicon metal in December is expected to decrease to around 315,000 mt.
Polysilicon
In November, the domestic production of polysilicon decreased significantly by approximately 11.8% MoM from October. The rise in electricity prices due to the end of the rainy season in November and the convening of industry-related meetings lead to a substantial production decline in the Sichuan and Yunnan regions. In December, production in these regions will further decrease significantly.
PV Module
According to SMM statistics, China's PV module production in November decreased by approximately 1.6% MoM, with an industry operating rate of about 49.6%. By technology route, the production schedule share of BC modules remained stable with a slight increase, HJT saw a significant production increase due to orders, and TOPCon continued to dominate the mainstream market. The primary reduction in November came from domestic bases of Chinese enterprises, with a growing number of small third-tier factories significantly reducing or halting production at year-end due to insufficient orders. First and second-tier top-tier module enterprises had sufficient demand for year-end tender deliveries, maintaining or slightly adjusting their operating rates. Some enterprises chose to significantly increase production to meet order demands and strive to achieve shipment targets. Production at overseas bases of Chinese enterprises also increased, mainly from the US and Malaysia, attributed to local demand in the US, import demand from India, and relatively smaller impact of anti-dumping and anti-subsidy tax rates on Malaysia among Southeast Asian countries.
Entering December, China's PV module production schedule is expected to continue decreasing, down approximately 9.7% MoM from November, with an industry operating rate of about 44.8%. The primary reduction still comes from domestic bases of Chinese enterprises, while the reduction at overseas bases mainly comes from Southeast Asian countries with high anti-dumping tax rates such as Vietnam and Thailand. Both first and second-tier top-tier enterprises are reducing production, with an increasing number of top-tier enterprises choosing significant production cuts due to high turnover inventory at year-end, the retreat of the rush for installations, reduced export tax rebate rates, and loss pressure. Most module enterprises are opting for production based on demand to ensure year-end inventory levels remain reasonable, which will help stabilize PV module prices in Q1 next year.
Solar Cell
In November, solar cell production increased by 6.87% MoM, with the growth mainly driven by Topcon cells, while the production of PERC cells, HJT cells, and BC cells all declined. The increase in Topcon cell production was primarily supported by demand. November marked the concentrated delivery period for 18X PV modules, leading to a very tight supply of cells. Some specialized cell plants increased the opening rate of Topcon183 cells. In December, the planned production of solar cells is expected to increase by 0.08% MoM, remaining almost stable. The planned production of PERC cells, HJT cells, and BC cells is expected to continue to decline slightly, while the planned production of Topcon cells is expected to steadily increase.
PV Film
According to SMM statistics, the production of PV film in China is expected to decrease by 3.73% MoM in December. Most companies will reduce their production, while some are expected to remain stable production. The main reason for the production decline is the slowdown in the production schedule of modules, leading to reduced demand. Additionally, the production of PV film in overseas markets is also showing a downward trend, particularly in Vietnam and Thailand. This is mainly because the capacity of Chinese module companies in these regions has almost stagnated, and the current production is primarily for export to module companies in the US, Turkey, and India.
PV-grade EVA
PV-grade EVA production in December is expected to decrease by 10.45% MoM. Some companies will maintain their production levels, while others will see slight declines mainly due to equipment maintenance. LDPE producers are expected to maintain their current production levels. On the import side, due to the rapid increase in domestic PV-grade EVA prices, December imports are expected to be higher than in November, with total domestic supply expected to remain flat compared to November. On the demand side, due to reduced module production schedules, demand is expected to decrease by 12% MoM, with inventory accumulation likely starting in mid-month, and the rate of increase gradually narrowing.
PV Glass
In November, domestic PV glass production continued to decrease, down 8.4% MoM from October. The operating rate of domestic PV glass producers decreased in November, mainly due to weakened demand from modules, which led to a more cautious supply sentiment among glass producers. Cold repair capacity increased during the month, with leading enterprises reducing daily melting capacity by 3,000 mt/day, and further reductions are expected. In December, nearly 5,000 mt/day of daily melting capacity is expected to undergo cold repair, and PV glass production is expected to continue to decrease.
DMC
In November, domestic silicone DMC production increased by 10.36% MoM and 27.06% YoY. The significant increase in November was mainly due to the ramp-up of new capacity from domestic monomer enterprises and the resumption of production at Zhejiang monomer enterprises in mid-to-late November. The operating rate of the industry increased again. In December, there will still be no large-scale production line shutdowns for maintenance domestically, but the operating rates of new facilities in Shandong and capacity in Zhejiang are expected to increase again in December. It is estimated that domestic silicone production in December will rise to around 230,000 mt.
Magnesium Ingot
According to SMM data, China's magnesium ingot production in November 2024 decreased by 1.5% MoM. In November, smelting enterprises in the magnesium ingot market saw both increases and decreases in production. The reason for the decrease is: due to the combined effects of supply surplus and weak demand, magnesium ingot prices have been declining for nearly two months. As magnesium ingot prices broke through the break-even line for smelting enterprises, these enterprises were forced to reduce or halt production. The reasons for the increase are: firstly, smelting enterprises that had previously halted production for maintenance gradually resumed production, leading to an increase in magnesium ingot supply. Secondly, some manufacturers adjusted their daily production based on their orders and inventory levels.
At the beginning of December, magnesium ingot prices were still on a downward trend, with no clear signs of stabilization. However, as smelting enterprises in major production areas faced losses across the entire cycle, news of production cuts and halts became frequent. It has been confirmed that the production of magnesium ingots has been affected by 250 mt, with smelters gradually reducing or halting production. The current supply-demand pattern in the market is gradually beginning to reverse, but the production cuts and halts are mainly occurring in Shanxi, Shaanxi, Ningxia, and Xinjiang provinces, with only 120 mt in major production areas affected. Therefore, the impact on stabilizing magnesium prices is limited, and further news of production cuts and halts in major production areas is still awaited. Considering that ten smelting enterprises will reduce or halt production in December, it is expected that magnesium ingot production in December will be adjusted down to 70,000 mt.
Magnesium Alloy
According to SMM data, China's magnesium alloy production in November 2024 decreased by 1.0% MoM. In November, the operating rate of magnesium alloy enterprises remained stable overall. Due to the continuous decline in prices of magnesium ingots and the slowdown in demand from downstream die-casting plants and 3C producers, buyers generally held a pessimistic outlook on the magnesium alloy market. Market transactions were difficult to follow up, and there were rumors that a major magnesium alloy producer had high inventory levels, leading two magnesium alloy manufacturers to halt production.
As the aluminum-magnesium ratio gradually decreased, the high aluminum prices significantly highlighted the cost-performance ratio of magnesium alloys. The attention to magnesium alloys in end-use applications steadily increased, and the operating rates of some magnesium alloy enterprises were adjusted upward. SMM expects magnesium alloy production in December to recover to 31,000 mt.
Magnesium Powder
According to SMM data, China's magnesium powder production in November 2024 increased by 1.5% MoM. In November, most magnesium powder enterprises operated normally, but the operating rates of some enterprises decreased. Due to low order volumes and fluctuating magnesium ingot prices, downstream enterprises' wait-and-see sentiment intensified, causing the production of some magnesium powder enterprises to remain at low levels. A representative from a large magnesium powder enterprise pointed out that the weak domestic economy, thin steel mill profits, and frequent fluctuations in magnesium ingot prices made downstream procurement more cautious. However, with the possibility of low-priced magnesium ingots stimulating a rebound in orders, SMM forecasts for December that domestic magnesium powder production will remain stable.
Titanium Dioxide
According to SMM data, China's titanium dioxide production in November 2024 saw a slight decrease MoM.
In early November, the price reduction of titanium dioxide led downstream enterprises to become more cautious in taking orders, resulting in a strong wait-and-see sentiment. With the effects of anti-dumping duties, some export orders were temporarily delayed, leading to a rise in producers' inventory. Consequently, domestic production of titanium dioxide in November experienced a slight decline.
In early December, due to a significant increase in sulphuric acid costs, leading enterprises maintained stable policy prices this month, and most titanium dioxide producers also kept their quotations firm. Additionally, nearly 40% of enterprises were in a state of production reduction or suspension, and the existing producers generally do not operate at full capacity. The market generally expects overseas markets to stockpile before the holidays, and the CHINACOAT also brought some anticipation to the market. Therefore, market sentiment slightly improved, and SMM forecasts for December that domestic titanium dioxide production will remain around 8,000 mt.
Titanium Sponge
According to SMM data, China's titanium sponge production in November 2024 decreased by 0.8% MoM. In early November, the titanium sponge market still faced a supply-demand imbalance, with downstream titanium material market demand remaining sluggish, bringing significant operational pressure to the titanium sponge industry. New orders were weak, and corporate inventories gradually increased. Despite an attempt by a titanium sponge company in Xinjiang to adjust prices at the beginning of the month, downstream acceptance of the new prices was low. According to SMM analysis, titanium sponge companies may continue to reduce production in December, with domestic output expected to decrease further.
Light Rare Earths
In November 2024, domestic production of Pr-Nd oxide and Pr-Nd alloy continued to see a slight decrease MoM. The reduction in Pr-Nd oxide production was mainly observed in Sichuan and Jiangxi, while the reduction in Pr-Nd alloy production was primarily in Sichuan.
According to the SMM survey, environmental protection inspections began in Sichuan in November, leading to reduced or halted production at some separation and metal plants. This situation is expected to continue until January. Additionally, some scrap recycling enterprises experienced varying degrees of increased or resumed production, resulting in a higher proportion of Pr-Nd oxide output from scrap recycling.
Throughout November, Pr-Nd prices declined, with demand remaining weak. Most industry participants have a pessimistic price outlook for Pr-Nd.
Medium-Heavy Rare Earth
In November 2024, the production of dysprosium oxide and terbium oxide increased MoM, while the production of gadolinium oxide continued to decline MoM. The production of holmium oxide also continued to grow slightly MoM.
According to the SMM survey, driven by the demand from major manufacturers and market news, the production of dysprosium oxide and terbium oxide increased MoM. The market demand for gadolinium oxide remained weak, and some separation enterprises adjusted their operating rates for gadolinium oxide downward in response to the market. It is understood that the ion-adsorption ore in the Panwa area has not yet resumed normal exports to China, and some miners indicated that this situation might continue until the Chinese New Year. However, due to the ample inventory of ion-adsorption ore in domestic separation plants, the production of medium-heavy rare earth oxides has not been affected.
NdFeB
In November 2024, domestic production of NdFeB magnetic materials slightly declined by approximately 1% MoM. According to an SMM survey, orders for magnetic materials showed weak growth, with most small and medium-sized enterprises seeing limited order increases and insufficient market demand support. However, some large enterprises had relatively sufficient orders, and overall production remained active. Nevertheless, severe price suppression by downstream customers squeezed profit margins, leading some enterprises to accept only small and scattered orders to control the risk of losses. At the same time, some enterprises pointed out that downstream order growth in December is expected to only offset the decrease in orders from the two-wheeled vehicle market, with overall market order growth likely remaining limited and enterprises lacking confidence in the future market. Currently, market sentiment is clearly cautious. However, industry insiders revealed that due to the expected logistics suspension in mid-January, downstream customers might concentrate on stockpiling in December to meet Chinese New Year demand. Therefore, SMM expects NdFeB production in December to possibly rebound, but the increase is expected to be relatively small.
Molybdenum Concentrate
According to SMM data, China's molybdenum concentrate production in November decreased by approximately 2% MoM. During November, domestic molybdenum market consumption remained strong, keeping molybdenum prices at high levels and ensuring good profitability for molybdenum concentrate, encouraging mining companies to maintain high operating rates. Additionally, due to strengthened environmental protection-related controls and a decline in ore grade, molybdenum concentrate output in regions such as Henan slightly decreased, leading to a slight overall market production decline.
Entering December, due to increased difficulty in ore processing during the northern winter and fluctuations in ore grade in some areas, molybdenum concentrate production may continue to decline slightly, but most mining companies are expected to maintain stable production levels.
Ferromolybdenum
According to SMM statistics, China's ferromolybdenum production in November increased by about 4% MoM.
With generally positive profits for molybdenum-containing steel, steel mills continued to increase the planned production of molybdenum-containing steel. At the same time, steel mill ferromolybdenum inventories were generally at medium to low levels, leading to steel mill ferromolybdenum tender volumes exceeding 10,000 mt, prompting ferromolybdenum smelters to maintain high operating rates, resulting in a slight increase in market production.
Entering December, as the planned production of molybdenum-containing steel has not decreased this month and the year-end restocking phase has begun, steel mill procurement demand for ferromolybdenum is expected to be released intensively, with ferromolybdenum production expected to at least remain stable.
Ammonium Paratungstate (APT)
According to SMM statistics, China's APT production in November decreased by about 1% MoM.
In the month, due to high tungsten raw material prices and insufficient downstream demand in the tungsten market, APT smelters maintained stable operating rates, with few enterprises actively increasing spot inventories. Additionally, some smelters experienced slight decreases in operating rates due to insufficient raw material reserves and difficulties in locking in tungsten raw materials corresponding to APT spot prices.
Entering December, as year-end stocking demand from the consumption side has not yet been released, APT market demand may rebound, with overall production expected to see a slight increase.
Silver
In November, silver production decreased, with 16 enterprises reporting reduced production. The reasons for the production decrease were: 1. Annual plans were basically completed, leading to market-controlled production. 2. Fluctuations in silver content in raw materials. 3. The rise in silver prices in October reduced market enthusiasm for recycling and procurement. 4. The decline in prices in November reduced market enthusiasm for production and shipment. Eleven enterprises reported increased production. The reasons for the production increase were: 1. Completion of maintenance and resumption of production. 2. Fulfillment of long-term contracts and export orders. 3. Catching up with production schedules. The reduction in production outweighed the increase, resulting in an overall downward trend in production.
In December, due to the US Fed's interest rate cut information, market prices slightly increased. However, as the market prepared for the Chinese New Year and adjusted inventories according to annual plans, production in December is expected to slightly decline.
Silver Nitrate
In November, silver nitrate production increased significantly, closely related to prices and demand. Prices: In November, due to the cooling of the war and the US elections, the market engaged in Trump trades, slowing the pace of interest rate cuts, which was favorable for the US dollar and bearish for silver. Therefore, the decline in silver prices stimulated downstream procurement and consumption. Demand: 1. The natural production days in November were more than in October, increasing rigid demand. 2. Due to downstream shutdowns and holidays in October, but continued terminal procurement and consumption, all links emptied inventories, coupled with favorable silver prices in November, leading to downstream procurement of orders. 3. Downstream enterprises focused on efficiency, slightly increasing unit consumption and raw material usage.
Antimony Ingot
According to the SMM survey, the total production of antimony ingots (including antimony ingots, crude antimony conversion, and antimony cathode) in China in November 2024 increased slightly by 4.59% MoM compared to October. Specifically, among the 33 surveyed producers, 11 had halted production, a decrease of 4 from the previous month; 19 had reduced production, an increase of 5 from the previous month; and 3 had normal production levels, a decrease of 1 from the previous month. In terms of antimony ingot production, November saw a rebound after two consecutive months of decline. Many market participants believe this is a normal phenomenon, as the anticipated further production cuts or halts did not occur despite the previous export control policies and weak end-use demand. Instead, due to the relatively sufficient supply of domestic raw materials, some producers resumed a certain level of production from their previous halted or reduced states. Many market participants indicated that the slight increase in November's production is also normal due to the pressure some producers face to meet their annual production targets by year-end. SMM expects that the national production of antimony ingots in December 2024 will remain stable compared to November, but a slight increase cannot be ruled out.
Note: Since May 2022, SMM has been publishing the national production of antimony ingots (including antimony ingots, crude antimony conversion, and antimony cathode). Thanks to SMM's high coverage rate in the antimony industry, the total number of surveyed antimony ingot producers is 33, distributed across 8 provinces nationwide, with a total sample capacity exceeding 20,000 mt and a total capacity coverage rate of over 99%.
Sodium Antimonate
According to SMM's survey of major sodium antimonate producers nationwide, China's first-grade sodium antimonate production in November 2024 decreased by 5.23% MoM compared to October. After the production decline in September, production fell again in November, mainly due to significant production declines at several enterprises. In terms of other detailed data, among SMM's 11 surveyed enterprises, two were in a state of production halt or adjustment in November, while most other sodium antimonate producers maintained stable production, with a few enterprises experiencing slight production increases, leading to an overall production decline.
According to market participants, from the perspective of the current fundamentals, the domestic PV glass production has been continuously declining since July, with October's production still underperforming, and daily melting capacity has returned to around 80,000 mt. There is a possibility that November's production will further decline, with some market participants suggesting that daily melting capacity could fall to the 70,000 mt level. This would significantly impact the consumption of glass clarifiers such as sodium antimonate. Many market participants believe that overall domestic antimony demand will decline in the short term. Particularly, if PV glass production maintains its current state, the demand for antimony metal from PV glass could decrease by about 35%. Additionally, many manufacturers aim to reduce inventory and liquidate assets before the Chinese New Year, which are all bearish factors. SMM expects that the production of first-grade sodium antimonate in China will likely remain stable in December, but some market participants believe that production could still decline further.
Note: Since July 2023, SMM has been publishing the national production of sodium antimonate. Thanks to SMM's high coverage rate in the antimony industry, SMM's survey includes 11 sodium antimonate producers across 5 provinces, with a total sample capacity exceeding 75,000 mt, covering 99% of the total capacity.
Refined Bismuth
According to SMM's survey of bismuth producers nationwide, China's refined bismuth production in November 2024 increased by 7.25% MoM compared to October 2024. After two consecutive months of decline in September and October, production rebounded. From the production situation of the manufacturers, due to the recent weak bismuth prices, raw material suppliers have increased their shipments. Although the enthusiasm for purchasing raw materials has decreased, many manufacturers still need to meet their annual targets in Q4, so most manufacturers did not reduce production, and some even slightly increased. Therefore, market participants generally expected the 7% increase in November production. From the detailed data, among the 24 surveyed manufacturers, 3 saw a significant decline in production in November, while 4 saw a significant increase, leading to an overall increase in refined bismuth production compared to the previous month. SMM expects that the national refined bismuth production in December 2024 will likely remain stable, but considering the year-end factors, the possibility of further increases is low.
Note: Since October 2022, SMM has been publishing the national production of refined bismuth. Thanks to SMM's high coverage rate in the bismuth industry, SMM's survey includes 24 refined bismuth producers across 8 provinces, with a total sample capacity exceeding 50,000 mt, covering more than 99% of the total capacity.
Lithium Carbonate
In November, the domestic total production of lithium carbonate steadily increased, up 8% MoM and 49% YoY. Stimulated by continuously rising demand and the presence of certain arbitrage opportunities in the futures market, the overall operating rate of upstream lithium chemical smelters improved.
By raw material type, the total production of lithium carbonate derived from spodumene increased by 7% MoM in November. The increase mainly came from the ramp-up of lithium hydroxide production lines switch to lithium carbonate, and some lithium chemical smelters also increased production driven by profits in the delivery market. After several months of MoM decline, the trend of lithium carbonate derived from lepidolite reversed, increasing by 23% MoM. The increase was not only due to generally improved demand but also supplemented by the output from newly resumed smelters. The output of lithium carbonate derived from salt lake slightly decreased by 6% MoM due to weather impacts. The output of lithium carbonate from recycling continued to rise, up 13% MoM, driven by the increasing orders under tolling agreements from leading battery cell manufacturers for processing waste batteries.
Entering December, the downstream demand side's production schedule continues to maintain a high level of activity. The positive sentiment of upstream smelters' production is also rising, and it is expected that the domestic total production of lithium carbonate in December will increase by 8%-10% MoM, with the incremental part still coming from the lithium ore side.
From the current spot market transaction situation of lithium carbonate, the increase in downstream consumption has driven spot order purchases of lithium carbonate, significantly raising the center of spot transaction prices in November. As the year-end period approaches, although downstream production schedules remain optimistic, current purchasing sentiment is weak due to year-end inventory control considerations. Upstream smelters have a strong sentiment to stand firm on quotes as the long-term contract negotiation period approaches. Considering the strong supply and demand pattern of lithium carbonate and the accumulated inventory levels, it is expected that the spot prices of lithium carbonate will continue to show sideways movement.
Lithium Hydroxide
According to SMM, in November 2024, China's lithium hydroxide production slightly decreased MoM by less than 3%, up 43% YoY.
Supply side, from the perspective of raw material types, the smelting end saw a significant reduction, down approximately 3% MoM. Some major smelting plants, during the recent low price period of lithium hydroxide, preferred to produce lithium carbonate on flexible production lines, leading to a certain reduction in the overall lithium hydroxide production. Besides, most other manufacturers produced according to orders, showing relatively stable performance overall. On the causticisation end, since there are currently few causticisation manufacturers in operation, November production was based on orders under tolling agreements and downstream demand, with no significant changes in total production.
Demand side, driven by good car model sales and the rush for installations of overseas ternary power batteries in the past two months, the market demand for medium and high-nickel ternary cathode materials has increased. As a result, the production of medium and high-nickel ternary cathode materials in November increased by approximately 10% MoM and up about 45% YoY. Orders in December are expected to show a slight increase as well.
Export side, according to customs data, in October, China's lithium hydroxide export volume reached 7,831.04 mt, down 38% MoM and approximately 24% YoY. Among them, exports to South Korea and Japan reached 5,770.75 mt and 1,695.96 mt, accounting for 73.69% and 21.66% of China's total exports for the month, respectively, down 43.76% and 17.78% MoM, and down 8.52% and 38.32% YoY. From September to October, overseas ternary cathode materials production decreased compared to July to August, coupled with overseas inventory buildup of lithium hydroxide, leading to a significant reduction in October imports. From the production schedule, November-December overseas medium and high-nickel ternary cathode materials production is expected to increase, with export volumes likely to rise slightly.
In conclusion, November showed a slight inventory buildup due to weak supply and small demand increase. From the December production schedule, some major lithium chemicals smelting plants have reduced orders under tolling agreements, coupled with increased motivation to produce lithium carbonate on flexible production lines due to good demand, leading to significant changes in lithium hydroxide market production. December production is expected to decrease by more than 15% MoM, with YoY growth of less than 25%, and the overall monthly supply-demand balance may be tight.
Cobalt Sulphate
In November, China's cobalt sulphate production increased by 5% MoM but decreased by 12% YoY. The main reason for the increase in November's production was the recovery in downstream precursor demand, leading to an increase in integrated production. Although the production of cobalt sulphate by smelting and processing enterprises declined, the overall production still recovered compared to October due to the offsetting effect. It is expected that the overall market situation will remain stable in December, with little fluctuation in cobalt sulphate production.
Co3O4
In November, China's Co3O4 production increased both YoY and MoM. The slight increase in November's production was mainly due to the sustained demand for LCO, driving continuous procurement of Co3O4. Top-tier Co3O4 enterprises maintained high operating rates, with a slight increase in production schedules. However, it is expected that in December, due to the anticipated mediocre demand for LCO, the willingness of enterprises to build inventory is not evident, and Co3O4 production is expected to decline both YoY and MoM.
Ternary Cathode Precursor
In November 2024, China's ternary cathode precursor production increased by 5% MoM and 10% YoY. On the supply side, the increase in precursor production mainly came from some top-tier enterprises, whose production slightly exceeded expectations due to the recovery in material market demand. The production of some non-top-tier ternary cathode precursor enterprises remained basically the same as the previous month. On the demand side, downstream ternary battery cell manufacturers increased their production schedules due to the year-end rush for installations, leading to increased demand for materials, with year-end performance exceeding expectations. Material manufacturers increased production in line with good orders, up about 4% MoM.
Looking ahead to December, considering the advance demand for some orders before the Chinese New Year, the production schedules of material manufacturers have increased, and ternary cathode precursor production is expected to increase by 1% MoM and 13% YoY.
Ternary Cathode Materials
In November 2024, China's ternary cathode materials production increased by 3.7% MoM and 9.2% YoY, with an overall operating rate of 41%, the same as in October. Overseas, overall production increased slightly compared to October. In terms of series proportions, 5-series ternary cathode materials accounted for 24%, 6-series for 31%, and 8-series for 40% in November. Compared to the previous month, the 8-series saw a significant increase, the 6-series increased slightly, while the 5-series proportion declined. In terms of market structure, the CR3 was 45.3%, CR5 was 59%, and CR10 was 79% in the month, with market concentration slightly increasing compared to October. On the demand side, global ternary battery cell production increased by 8%, with the increase mainly coming from China, while overseas ternary battery cell production slightly decreased, with demand remaining relatively weak.
It is expected that in December, ternary cathode materials production will be affected by the year-end rush for installations and exports by downstream battery cell manufacturers, leading to increased demand and a continued slight MoM increase of about 3%.
Iron Phosphate
In November, China's iron phosphate production increased by 12% MoM and 122% YoY. On the supply side, iron phosphate enterprises basically completed their production plans in November, with some enterprises receiving orders exceeding their actual capacity, choosing to either overproduce or reduce orders based on the situation. Additionally, driven by the increase in new energy demand, there was a shortage of industrial ammonium during the winter stockpiling period in November, leading to a rise in industrial ammonium prices and an increase in iron phosphate costs. Due to the change in the supply-demand relationship between iron phosphate and LFP, the sentiment to stand firm on quotes among iron phosphate enterprises with prolonged losses has strengthened. The demand for iron phosphate from downstream LFP in November was considerable. Some high-quality iron phosphate enterprises had limited actual capacity, and there were even cases of supply tightness.
It is expected that iron phosphate production in December will slightly decline MoM, but the estimated production in December will still increase by 195% YoY compared to the same period in previous years.
LFP
In November, China's LFP production increased 10% MoM and over 150% YoY. Supply side, LFP enterprises showed high production enthusiasm, with most first-tier and second-tier enterprises having full order books. Unlike previous years, at the end of Q4, LFP enterprises no longer focused on reducing production to control inventory levels. Instead, driven by downstream demand, they increased production to ensure sufficient product supply, aiming for higher year-end shipments to conclude 2024 successfully. Demand side, the NEV market demand will be boosted by year-end promotions and various regional policy subsidies, while the energy storage market demand will be more affected by seasonal factors, especially the domestic year-end grid connection deadline (December 30) and the more pronounced year-end rush for installations overseas. Overall, these factors led to a 10% increase in the LFP market in November, with December's expected production maintaining a similar level to November. December LFP production is expected to remain stable MoM and increase nearly 200% YoY.
LCO
Price side, the average price of LCO (4.4V) in November was 140,500 yuan/mt, down 3.4% MoM and 37% YoY. Raw material side, the price of battery-grade lithium carbonate rebounded in November, while the price of Co3O4 continued to decline, leading to significant fluctuations in raw material prices. Nevertheless, due to the strong desire to bargain down prices from downstream battery cell manufacturers, the actual transaction prices of LCO in the market did not show significant changes and continued to fluctuate downward.
Supply side, LCO production in November increased by 4% MoM, mainly to meet rigid demand. The operating rate of top-tier enterprises remained high, with stable production plans and high market concentration. Demand side, due to the limited release of new digital 3C products at year-end, downstream enterprises were cautious in their procurement activities and had weak stockpiling intentions, maintaining only necessary safety inventory. Therefore, LCO production is expected to slightly decrease in December, and prices will continue to fluctuate downward.
LMO
In November 2024, China's LMO production dropped both YoY and MoM. The primary reason for the decline in November production was the frequent fluctuations in lithium carbonate prices, which did not show significant growth. This made it difficult for LMO prices to rebound and even caused them to drop back slightly, leading to generally mediocre market sentiment. As the year-end approached, producers' production plans tended to be rational, coupled with weak downstream demand growth, resulting in reduced production. Looking ahead to December, some producers may choose to further cut production due to surplus inventory or downward pressure on prices, and LMO production is expected to drop slightly MoM.
*Survey Methodology
The SMM production survey is conducted by professional analysts through telephone and on-site surveys, regularly tracking Chinese metal producers on a monthly basis, and issuing the China Metal Production Report based on this.
During the survey, the basic coverage ratio of the sample is ensured and continuously expanded; at the same time, factors such as capacity scale, geographical distribution, and nature of enterprises are reasonably considered and allocated to ensure that each sub-item data is representative.
It is released to the public through official channels such as the SMM official website (www.smm.cn), WeChat subscription account (Today's Nonferrous Metals), and mobile site (m.smm.cn) around the 10th of each month.
