China's Metal Production in June 2025: Mixed Performance Across Sectors
China's metal production landscape showed varied results in June 2025, with certain sectors experiencing growth while others faced declines. This comprehensive analysis examines the latest production trends across base metals, minor metals, rare earths, and new energy materials, providing insights into factors driving these changes and forecasting developments for July 2025.
Base Metals: Shifting Production Patterns Amid Market Pressures
Copper Cathode: Four-Month Growth Streak Ends
China's copper cathode production decreased by 0.3% month-on-month (MoM) in June 2025, ending four consecutive months of growth. Despite this minor setback, year-on-year (YoY) production increased significantly by 12.93%, with cumulative January-June production up 11.40% compared to the same period last year.
The June decline was primarily driven by nearly 40% of surveyed companies reducing production to varying degrees. Environmental protection inspections caused significant production drops at a North China smelter, while the volume of imported copper anodes also decreased. Port copper concentrate inventory dropped precipitously from 795,900 mt at May's end to 623,500 mt by June's end, further constraining production.
The industry's operating rate fell to 85.76% in June, down 3.06 percentage points MoM. Large smelters experienced the most significant decline (down 5.21 percentage points to 87.52%), while small smelters saw improvements (up 6.48 percentage points to 69.37%), indicating a temporary shift in production dynamics favoring smaller operations. Recent copper price insights suggest market conditions remain volatile.
July Forecast: Production is expected to increase by 1.37% MoM and 11.88% YoY as maintenance concludes and newly commissioned smelters ramp up production. This recovery suggests the June decline was primarily technical rather than indicative of a broader downward trend.
Aluminum: Capacity Replacement Programs Reshape Production Landscape
Aluminum production in June 2025 increased by 1.57% YoY but decreased by 3.23% MoM. The end-of-June operating capacity remained relatively stable at approximately 43.83 million mt, with slight adjustments due to capacity replacement programs, particularly in Shandong where plants are being relocated to Yunnan to leverage hydroelectric power resources.
The proportion of liquid aluminum continued to rise slightly to 75.8% (up 0.1 percentage points), though the increase was smaller than expected due to high alloy inventory at downstream facilities and increased casting ingot production at some smelters responding to market demands.
Despite news of production cuts in Qinghai and central China circulating in the market, the actual impact on overall production remained limited, highlighting the industry's resilience and adaptability.
July Forecast: Operating capacity will maintain high levels with Yunnan's second batch of replacement projects commencing operation. However, weakening end-use demand and significant inventory buildup may force smelters to increase casting ingot output, potentially reducing the proportion of liquid aluminum to around 74%.
Alumina: Regional Capacity Shifts Drive Production Changes
China's metallurgical-grade alumina production in June 2025 decreased 0.19% MoM but increased 6.1% YoY. The operating rate reached 79.7% of the country's approximately 110.82 million mt existing capacity.
Regional developments showed significant shifts, with South China's previously idled capacity gradually resuming, resulting in operating capacity rebounding by nearly 2 million mt. North China also saw positive growth with operating capacity increasing by approximately 700,000 mt.
The connection between alumina spot prices and producer maintenance decisions became increasingly evident, with price fluctuations directly influencing operational strategies across regions. According to research from Westpac IQ, these fluctuations align with broader commodity trends observed across Asia-Pacific markets.
July Forecast: Operating capacity is expected to remain largely stable at around 88.27 million mt/year, with some facilities planning maintenance and production cuts while newly commissioned capacity gradually ramps up, maintaining overall supply equilibrium.
Primary Lead: Price Stabilization Supports Production
Primary lead production decreased by only 0.78% MoM in June 2025 but increased by 16.23% YoY. The cumulative January-June production rose by 9.69% YoY, demonstrating strong annual growth momentum despite monthly fluctuations.
The smaller-than-expected monthly decline was primarily attributed to lead price stabilization above 17,000 yuan/mt, reaching a three-month high of 17,270 yuan/mt in late June. This price strength increased production enthusiasm among smelters, leading some enterprises to postpone planned maintenance to capitalize on favorable market conditions.
However, raw material constraints began emerging, with Pb50 concentrate treatment charges (TCs) dropping to 400-700 yuan/mt, while imported ore treatment charges turned negative, ranging from -$80 to -$100/dmt, signaling potential future production challenges.
July Forecast: Production is expected to increase by around 4% MoM due to the resumption of operations at smelters in east, central, and north China. However, declining lead concentrate treatment charges may limit growth potential if this trend continues.
Secondary Lead: Supply Chain Disruptions Hamper Recovery
Secondary lead production increased by 2.39% MoM in June 2025 but decreased by 13.57% YoY. Secondary refined lead output rose 1.27% MoM but declined 17.97% YoY, showing the sector's ongoing struggles.
Multiple challenges contributed to this underperformance:
- High raw material costs coupled with weak downstream demand
- Scarcity of scrap battery supplies, with recyclers increasingly withholding stock
- Delayed resumption plans after maintenance at several facilities
- Equipment failures at plants in central China
- Delayed commissioning of new capacity in south-west China
July Forecast: Production is expected to maintain growth momentum as large secondary lead smelters in east China, north China, and north-west China resume operations after completing scheduled maintenance.
Refined Zinc: Widespread Resumptions Drive Growth
Refined zinc production in June 2025 increased significantly by 6% MoM and approximately 7% YoY, with cumulative January-June output rising by over 1.5% YoY.
The robust growth was driven by widespread resumptions of operations after maintenance across multiple regions, with notable production increases in Inner Mongolia, Hunan, Shaanxi, Anhui, Guangxi, and Qinghai contributing to the overall output expansion.
July Forecast: Production is expected to increase by nearly 2% MoM and over 21% YoY, primarily due to additional resumptions after maintenance, new capacity releases, and production resumptions in Yunnan, Henan, Guangxi, Shanxi, Qinghai, and Hubei, potentially creating supply pressure in coming months.
Refined Tin: Critical Raw Material Shortages
Refined tin output fell dramatically by 6.94% MoM and 15.2% YoY in June 2025 due to several compounding factors creating a perfect storm for producers. Recent tin price surge insights highlight how global supply constraints are affecting market dynamics.
The most critical issue was severe raw material shortages, especially in Yunnan where smelters reported less than 30 days of inventory. The lingering impact of Myanmar's August 2023 mining ban and delays in the Wa region have significantly constrained concentrate imports, with January-May cumulative imports reaching just 10,000 mt metal content.
Additional challenges included:
- Mounting cost pressures from high processing costs for low-grade ores and rising electricity costs
- Disrupted scrap tin recycling system with market circulation decreasing by over 30%
- Small and medium-sized secondary smelters facing shutdowns due to sustained losses
July Forecast: Production is expected to rebound by 8.59% MoM as smelters in Yunnan and Jiangxi provinces complete maintenance and gradually resume operations, though raw material constraints will continue to limit growth potential.
Minor Metals: Cost-Price Squeeze Impacts Production
Refined Nickel: Raw Material Shortages Drive Production Cuts
Refined nickel production decreased significantly by 10% MoM in June 2025 but increased by 15% YoY. The operating rate of domestic refined nickel enterprises reached 59%, reflecting ongoing operational challenges.
The decline was primarily driven by significant production cuts by a top-tier enterprise caused by raw material shortages. Spot prices also continued their downward trend, averaging 121,558 yuan/mt (down 3,125 yuan/mt MoM), while Jinchuan premiums averaged 2,600 yuan/mt (up 400 yuan/mt MoM), creating market distortions.
High inventory levels persisted despite increased spot trading volume, placing additional pressure on producers to limit output.
July Forecast: Production is projected to rise only 1% MoM as production cuts by top-tier enterprises are unlikely to recover soon, and nickel intermediate products remain scarce, creating an ongoing supply constraint.
Nickel Pig Iron (NPI): Cost-Price Squeeze Intensifies
China's NPI production in June 2025 fell approximately 5.03% MoM in physical content and 4.82% MoM in metal content as the industry faced mounting economic pressures.
The production decline stemmed from ore costs for domestic smelters rising while finished product prices hit yearly lows, creating an unsustainable margin squeeze. Traditional smelters reduced production and some experienced grade declines, further impacting output. Additionally, high Philippine ore prices made in-house production less economical for integrated smelters, while weaker 200-series stainless steel production drove low-grade NPI output lower.
July Forecast: Production is expected to decrease approximately 0.58% MoM in physical content and 0.04% MoM in metal content, with high-grade NPI edging up slightly while low-grade NPI production continues its downward trend.
Indonesian NPI: Weather Issues Compound Economic Challenges
Indonesian NPI production in metal content fell about 3.26% MoM but rose 13.51% YoY in June 2025, reflecting complex market dynamics.
Multiple factors contributed to this production decline:
- High saprolite ore premiums despite relatively small production cuts in major mining areas
- Abundant rainfall in Halmahera hindering mining and transportation logistics
- Finished product prices facing resistance from downstream consumers
- Widespread losses among mainstream Indonesian NPI smelters creating economic pressure
July Forecast: Production is expected to drop about 1.52% MoM but surge 28.4% YoY as saprolite ore premiums may ease slightly. However, persistently high costs will likely keep NPI plants in loss-making territory, potentially driving some operations to consider maintenance shutdowns or shifts to nickel matte production.
Magnesium Ingot: Margin Improvement Drives Production Growth
China's primary magnesium production increased by 6.63% MoM in June 2025, reversing previous declines. This growth was driven by improved profit margins due to declining raw material prices, enabling the gradual resumption of production at smelters that had suspended operations during earlier cost pressures.
The recovery was further supported by the resumption of operations at two primary magnesium smelters in Xinjiang after completing scheduled maintenance, adding significant capacity back to the market.
July Forecast: Production is expected to increase slightly MoM as four primary magnesium smelters in the main production areas have reported production resumption plans, potentially adding to supply in coming weeks.
Magnesium Alloy: Market Acceptance Accelerates
Magnesium alloy production increased slightly MoM in June 2025, with operating rates continuing their upward trajectory as market acceptance grows.
Several positive factors contributed to this growth:
- Intensified market promotion efforts by major producers highlighting magnesium's advantages
- Growing industry recognition of magnesium alloy's cost-performance benefits
- Some die-casting enterprises beginning to replace aluminum alloys with magnesium alloys
- Seasonal demand boost as June traditionally represents a peak production period for the die-casting industry
July Forecast: Production may undergo a moderate adjustment downward as seasonal factors shift and the market begins to exhibit off-season characteristics, though the longer-term substitution trend remains positive.
Titanium Dioxide: Trade Barriers Impact Production
Titanium dioxide production decreased by 5.93% MoM in June 2025, with the overall industry operating rate remaining at a modest 60%, reflecting challenging market conditions.
This decline stemmed from multiple factors:
- Deteriorating international trade environment, tariff barriers, and anti-dumping policies
- Significantly contracted export orders limiting overseas sales
- Fierce competition among domestic producers exacerbating overcapacity pressure
- Accumulating inventories forcing production cuts or shutdowns at numerous facilities
July Forecast: Production may continue its downward trend as more enterprises join the production cut ranks amid persistent inventory backlogs and weak downstream demand, potentially leading to a prolonged period of industry rationalization.
Titanium Sponge: Market Balance Maintained
Titanium sponge production remained stable MoM in June 2025, maintaining a dynamic balance between supply and demand with reasonable inventory cycles of 15-21 days.
The sector benefited from advance stockpiling by downstream producers preparing for the traditional peak production season. Demand remained stable for high-end titanium sponge products (Grade 0 and Grade 1), and the formation of a new price consensus between producers and downstream users provided market stability.
July Forecast: Production is expected to continue growing mildly under the dual influence of continuous inventory digestion and end-use demand support, particularly from aerospace and chemical processing industries.
Rare Earth Sector: Recycling Boosts Output Amid Raw Material Constraints
Light Rare Earths: Scrap Recycling Drives Production Growth
Pr-Nd oxide production increased 2.6% MoM in June 2025, with the main growth coming from Jiangxi and Shandong provinces. This increase was primarily attributed to increased scrap recycling output rather than new raw ore production.
Several factors influenced production dynamics:
- Favorable scrap prices increased suppliers' willingness to sell recycled materials
- Growing recycling volume at scrap recycling enterprises expanded supply
- Environmental protection inspections in certain regions slightly affected separation plant output from raw ore sources
Recent rare earth upgrade breakthrough technologies have also begun to influence production methods, potentially transforming the sector's future operations.
Pr-Nd alloy production rose more significantly by 4.5% MoM, mainly attributed to capacity expansion projects in Gansu supported by increased orders and higher operating rates.
July Forecast: With gradual recovery in end-user demand and continued progress in export licenses, Pr-Nd alloy production is expected to increase slightly, supporting further growth in the sector.
Medium-Heavy Rare Earth: Dual-Source Supply Strategy
Medium-heavy rare earth oxide production saw a mild rebound MoM in June 2025 despite unfavorable ion-adsorption ore imports and procurement difficulties reported by some separation enterprises.
The growth was primarily driven by a dual-source strategy:
- Stable production from raw ore sources maintaining baseline output
- Notable growth in production from scrap recycling providing incremental supply
- Rising NdFeB scrap prices increasing magnetic material enterprises' willingness to sell scrap
- Significantly higher operating rates at most recycling plants expanding secondary supply
This trend highlights the growing importance of recycling within the rare earth supply chain, particularly for critical medium-heavy rare earth elements.
NdFeB Magnetic Materials: Market Segmentation Intensifies
NdFeB magnetic material production showed a mild upward trend MoM in June 2025 despite multiple pressures including rare earth raw material price fluctuations and export policy adjustments.
The industry exhibited clear structural differentiation:
- Top-tier enterprises maintained strong production stability through high-stickiness customer relationships and long-term contracts
- Small and medium-sized producers scaled back capacity due to weak cost control capabilities and rising compliance risks
- Clarification of the export license management framework and implementation of support measures for high-end manufacturing industries led to a marginal recovery in newly signed orders in late June
July Forecast: Production is expected to continue its upward trend based on policy dividends and certainty of high-end demand growth in sectors such as NEV motors and precision components for robot joints, while lower-tier producers will continue facing consolidation pressure.
New Energy Materials: Production Adjustments Amid Market Evolution
Lithium Carbonate: Futures Market Drives Production Decisions
Domestic lithium carbonate production increased significantly in June 2025, up 8% MoM and 18% YoY. This growth was primarily driven by hedging opportunities in the futures market prompting many previously low-utilization lithium chemical producers to resume production. Ongoing lithium market challenges continue to shape producer decisions.
Production changes varied by raw material source:
- Spodumene-derived lithium carbonate: Up 11% MoM due to resumption after maintenance at leading
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