Increased Supplies and Weak Demand Pressure Chinese Rare Earths

As global supplies continue to rise and demand from downstream industries slows, market participants anticipate short-term downward pressure on Chinese rare earth markets. Consecutive output increases, driven by higher ore feedstock supplies from China’s mining quotas and imports from major supplier countries, coupled with reduced capacity utilization in the magnet industry, have resulted in elevated inventories across many rare earth companies. This has prompted suppliers to destock materials at comparatively lower prices. Pessimism regarding short-term demand outlooks is growing, particularly in light of the global economic downturn.

China's rare earth output has steadily increased over recent years, supported by higher mining quotas and ore feedstock imports. Metalnomist projects that China’s total quotas for rare earth mining products in 2024 will rise by 10-15% compared to the previous year, reaching 280,000-290,000 tons. The production of praseodymium-neodymium oxide from these quotas is expected to reach approximately 44,500-45,500 tons this year, up from around 40,000 tons in 2023.

Imports of ore feedstock from Southeast Asian countries, including Myanmar (Burma), Laos, and Malaysia, are projected to increase by 3-5% in 2024, reaching around 60,000 tons of rare earth oxide (REO), as rising shipments from Laos outweigh declines from Myanmar and Malaysia. Conversely, China’s rare earth metal ore imports from the US are likely to decrease by over 30% from the previous year, falling below 28,000 tons of REO, due to increased domestic consumption in the US. US-based rare earth producer MP Materials more than doubled its praseodymium-neodymium oxide production during April-June and expects a further 50% increase in the third quarter, further reducing its exports to China.

Metalnomist forecasts China’s production of praseodymium-neodymium oxide using ore feedstock imports from Southeast Asia and the US to reach around 20,000-21,000 tons in 2024. Overall, China’s praseodymium-neodymium oxide output is expected to rise to approximately 92,000-95,000 tons this year, representing a 10% increase from 2023.

China's total production of dysprosium oxide in 2024 is expected to increase to around 3,600-3,700 tons, including approximately 400 tons from domestic mining quotas, 2,000 tons from ore feedstock imports, and around 1,000 tons from neodymium-iron-boron (NdFeB) magnet scraps. Terbium oxide production is also projected to rise to around 650 tons, with around 75 tons produced from China’s mining quotas, 390 tons from ore feedstock imports, and 180 tons from NdFeB magnet scraps.

Over the past decade, many magnet plants have reduced their consumption of ferro-dysprosium and terbium metal by more than 70% to cut production costs. Market participants warn that this could lead to a surplus of over 1,000 tons of dysprosium oxide and more than 200 tons of terbium oxide this year, unless China’s State Reserve Bureau intervenes with stockpiling efforts to alleviate inventory pressures on rare earth separation plants.

Expansion Slows Amidst Growing Competition

The average operating rates at most of China’s magnet plants have declined to around 60% over the past two months, driven by falling magnet prices and reduced consumer orders during the traditional off-season. China’s rough NdFeB magnet output reached 270,000-280,000 tons in 2023, an 8% increase from the previous year. Some market participants expect production to rise to around 300,000 tons in 2024, as large-scale magnet plants boost operations to secure more market share and consumer orders. However, medium and small magnet plants have been forced to reduce their operating rates to below 50% or suspend operations entirely due to profitability and cash flow challenges.

Major Chinese magnet manufacturer Jinli Magnet aims to increase its production capacity to 38,000 tons per year for rough NdFeB magnets by the end of 2024, and to 40,000 tons per year for high-performance rare earth permanent magnets and advanced magnetic components by 2025. Currently, the company’s output capacity stands at 23,000 tons per year. Meanwhile, Yantai Zhenghai Magnetic Material plans to reach an output capacity of 36,000 tons per year for permanent magnetic materials by 2026.

A few magnet plants have slowed their output expansions, as fierce price competition in downstream applications, particularly in the new energy vehicle (NEV) industry, has severely squeezed profit margins. "I heard that major Chinese NEV manufacturer BYD was required to use cerium-iron-boron (CeFeB) magnets instead of NdFeB in a bid to reduce its production costs and enhance global competitiveness," a source from a magnet plant revealed.

China's production of CeFeB magnets is forecast to rise to over 100,000 tons this year, up from approximately 70,000 tons in 2023, the source added.

China’s TiO2 Capacity Utilization Set to Fall in 2025 Amid Sluggish Demand and Export Pressures

China's Titanium Dioxide

China, the world's leading producer of titanium dioxide (TiO2), is set to experience a fall in capacity utilization rates by 2025. This decline is attributed to an expected rise in production capacity, muted demand from downstream sectors, and mounting export pressure. According to market estimates, China’s TiO2 capacity utilization is projected to decrease by 2 percentage points, reaching 68% in 2025 from 2024’s 70%.

Capacity Expansions and Production Growth

In 2024, China will continue its expansion of TiO2 production capacity with several new facilities coming online. Companies like Pangang, Inner Mongolia Guocheng, Fujian Kuncai, and Guangdong Huiyun are set to add a combined 700,000 tons per year (t/yr) of new capacity. This expansion will increase the total production capacity from 5.87 million t/yr in 2023 to 6.57 million t/yr by the end of 2024.

In 2025, further expansions will continue. Shandong Jinhai, Sichuan Yibin Tianyuan, and Shandong Xianghai Titanium Resources Technology are among the companies investing in additional capacity. These new projects will add at least 360,000 t/yr of TiO2 capacity, bringing China's dominance in the global market even higher. Despite these investments, the rising supply could outpace domestic demand.

Muted Domestic Demand

The domestic demand for TiO2, particularly from the painting industry—China's largest consumer of TiO2—has been weakening in recent years. The painting sector accounts for approximately 60% of China's TiO2 consumption, with architectural coatings being the largest segment. However, the slowdown in China’s real estate industry, which directly affects the demand for architectural coatings, is contributing to a reduction in TiO2 consumption.

China’s real estate sector has faced substantial challenges since 2022, with significant declines in investment and completed residential areas. As a result, TiO2 demand from this sector is expected to remain sluggish, further pressuring the TiO2 market in the coming years.

Export Pressure and Trade Restrictions

China’s TiO2 exports have been increasing, with a marked rise in 2023, which accounted for 39.5% of the country’s total production. However, this surge in exports has led to anti-dumping investigations in multiple regions, including the European Union, India, Brazil, and Saudi Arabia. The European Union, in particular, has imposed final anti-dumping duties on Chinese TiO2 imports, which will take effect from January 2025.

These trade restrictions could impact the international demand for Chinese TiO2, as countries with ongoing anti-dumping measures are likely to see a reduction in TiO2 imports from China. Meanwhile, competitors in other countries, such as Tronox, are recovering from low utilization rates and are expected to increase their production, potentially reducing China’s share in the global TiO2 market.

Outlook for 2025 and Beyond

The overall outlook for China’s TiO2 market in 2025 is uncertain. While capacity expansions will continue, weak domestic demand and export restrictions will likely make it challenging for the country to sustain the high output levels seen in previous years. Market participants predict that the growth in output will slow down, and capacity utilization rates will continue to decline as China faces both domestic and international pressures.

As China grapples with a combination of weaker demand and export constraints, it is expected that the TiO2 industry will have to adjust to a new normal of reduced growth in 2025.

Zabuye lithium project marks major step in China’s brine supply expansion

Zabuye lithium Salt lake

The Zabuye lithium project in Tibet has entered its second phase, expanding China’s brine-based lithium capacity. The Zabuye lithium project now adds sizeable battery-grade output at a time when the global lithium market is tipping into surplus. As a result, the Zabuye lithium project strengthens China’s ability to influence pricing and security of supply across the EV battery chain.

Phase-two expansion lifts Tibet’s brine lithium capacity

China’s Tibet-based producer has started up phase two at Zabuye with 9,600 t/yr of battery-grade lithium carbonate. The new phase also includes 2,400 t/yr of industrial-grade lithium carbonate, adding flexibility across downstream chemical and industrial customers. Commissioning of the second-phase lines began in late 2023, but full launch slipped from a planned June start into late September. However, the first phase, focused on 7,000 t/yr of lithium concentrate, has remained operational and continues to support the overall project. Zabuye draws on one of the world’s largest salt-lake resources, with proven reserves of around 1.84mn t of lithium in brine. This makes it Asia’s largest lithium brine lake and the third-largest globally, underlining its strategic relevance for long-term supply.

Zabuye lithium project scales into a looser global market

The timing of the Zabuye lithium project expansion coincides with strong growth in global brine output. Market forecasts indicate that global lithium brine production will rise by about 24pc in 2025 to above 370,000t LCE. At the same time, total lithium feedstock supply is projected to reach about 1.6mn t LCE in 2025. Meanwhile, demand is expected to come in near 1.5mn t LCE, implying a surplus of roughly 100,000t. Therefore, new brine tonnes from Zabuye will feed into an already better-supplied market, potentially reinforcing price pressure if demand underperforms. Yet high-quality, low-cost brine projects retain strategic importance, especially for integrated Chinese players.

Strategic shareholders reinforce China’s battery value chain

Zabuye’s ownership underscores its role in China’s EV and battery strategy. Major Chinese battery and lithium companies hold significant stakes in the project, tightening the link between upstream brine resources and downstream cathode and cell manufacturing. This integrated structure allows key players to secure battery-grade lithium carbonate volumes under long-term arrangements. In addition, the project’s location in Tibet diversifies China’s domestic resource base beyond traditional hard-rock and other brine hubs. However, higher-altitude operations and logistics can still pose cost and reliability challenges compared with coastal or overseas assets. Even so, the project is positioned as a core pillar in China’s wider lithium industrial ecosystem.

The Metalnomist Commentary

Zabuye’s phase-two launch shows how Chinese brine projects are still scaling even as the market moves into surplus. For global buyers, the combination of growing Chinese brine capacity and integrated ownership by major EV and lithium players suggests continued competitive pressure on higher-cost producers. The medium-term question is how long marginal assets outside China can remain viable if brine-led oversupply persists.

China’s Recycled Rare Earth Output Drops in 2024 on Supply and Margin Pressures

China’s Recycled Rare Earth

Rare Earth Oxide Output Falls Despite Long-Term Growth

China’s recycled rare earth oxide (REO) output declined in 2024, primarily due to limited NdFeB magnet scrap supply and weaker plant margins. Ji’an Xintai Technology’s chairman, Liu Weihua, reported that REO output from NdFeB magnet scrap totaled 34,147 tonnes, down 14% from 2023 but up 2% from 2022.

This total includes 26,504t of praseodymium-neodymium oxide, along with smaller quantities of gadolinium, terbium, dysprosium, and holmium oxides. By comparison, China produced 39,662t of REO from scrap in 2023, indicating a clear year-over-year contraction in recycled supply.

Scrap Availability and Profitability Hit Recycling Plants

Liu noted that larger magnet manufacturers are producing less NdFeB scrap due to technology upgrades. This shift, combined with traders' reluctance to sell at lower prices, has constrained the scrap supply chain.

Meanwhile, rare earth recycling plants have seen shrinking profit margins amid firm scrap prices and falling REO market prices. To cope, many rough magnet manufacturers have started in-house recycling to improve resource efficiency and profitability.

China currently operates about 40 recycling plants for NdFeB scrap, with Jiangxi province accounting for 64% of the nation’s recycled REO output. Shandong and Jiangsu followed with 15% and 11%, respectively, consolidating over 86% of China's total recycling capacity.

China Maintains Global Dominance in Rare Earth Supply

Global REO output in 2024 reached 454,000 tonnes, with China contributing roughly 90% through its mining quotas, scrap recycling, and imports. Despite this year’s dip, China's REO recycling capacity surpassed 80,000t in 2024 and is expected to hit 100,000t in 2025.

As demand for NdFeB magnets surges globally, China’s long-term recycling potential remains strong, albeit challenged by short-term headwinds.

The Metalnomist Commentary

China’s temporary dip in recycled rare earth output reflects deeper structural tensions between supply control and market sustainability. The push for high-tech efficiency is narrowing scrap availability, but rising global magnet demand ensures that China's recycling sector will remain a pillar of strategic resource security.

China’s IMDTECL Launches $1bn Alumina Plant Project in Guinea

China Alumina

New alumina facility marks China’s deepening investment in bauxite-rich West Africa

IMDTECL Begins Construction of 1.2mn t/yr Alumina Plant

China’s Inner Mongolia Dian Tou Energy (IMDTECL) began building a $1 billion alumina plant in Tougnifilidy, Guinea, on 26 March 2025. The integrated facility will produce 1.2 million tonnes per year of alumina and include bauxite mining and associated infrastructure.

This development reinforces China’s strategic grip on Guinea’s bauxite reserves, which are vital for the global aluminum supply chain. The new plant aligns with Guinea’s national requirement that major miners invest in in-country refining capacity to enhance local value addition.

Guinea Rises as a Strategic Alumina Hub

Guinea remains China’s largest bauxite supplier, with shipments hitting 110 million tonnes in 2024, up 12% year-on-year. This accounted for nearly 70% of China’s total bauxite imports, underscoring the West African country’s importance in the aluminum value chain.

In response to this dependency, Guinean regulators are enforcing stricter policies, including mandating domestic alumina processing. These measures are designed to capture more downstream value and stimulate industrial development in Guinea.

Outlook: Strong Growth in West African Alumina Capacity

Market analysts expect a significant rise in Guinea’s alumina production over the next five years due to multiple plant investments. As a result, China’s reliance on raw ore imports could be partly replaced by alumina shipments, easing pressure on domestic refiners.

Meanwhile, projects like IMDTECL’s could redefine global bauxite trade flows, encouraging other nations to localize resource processing. The IMDTECL project may also influence global alumina prices and trade logistics, especially within the China–Africa supply corridor.

The Metalnomist Commentary

China's vertical integration in Guinea reflects a new era of resource diplomacy and industrial policy enforcement. As refining moves closer to the mine, emerging economies like Guinea could gain more influence over global metals markets.

Bushveld Mineral

South African Output Cuts to Boost China's Vanadium-Nitrogen Exports

Rising Exports Driven by Lower South African Production and Strong US Demand

China’s vanadium-nitrogen exports are expected to see significant growth in 2025, primarily due to output cuts from a major South African producer, increasing demand from the US, and strong export interest from Chinese producers. Market participants anticipate a boost in global vanadium-nitrogen trade, benefiting China’s export numbers.

Impact of South African Output Cuts on Global Vanadium-Nitrogen Supply

South African vanadium-nitrogen production has been notably impacted by ongoing equipment maintenance at Bushveld Minerals Vametco plant. From mid-December to March 2025, the plant will operate at reduced capacity due to a cash shortage. In 2024, Bushveld’s production fell by 19%, amounting to 1,387 tonnes. This reduction in South African output is expected to continue in 2025, with the producer operating at low run rates due to negative profit margins. Consequently, China is positioned to capitalize on these cuts by increasing its exports.

Global vanadium-nitrogen alloy production is heavily concentrated in China and South Africa, with other countries lacking the necessary technology due to intellectual property restrictions. While European and US steel mills often prefer using ferro-vanadium (80% grade) over vanadium-nitrogen, China’s export increase in vanadium-nitrogen reflects changing dynamics in the alloy market.

Surge in China’s Vanadium-Nitrogen Exports and US Market Demand

China’s vanadium-nitrogen exports more than doubled in 2024, reaching 2,523 tonnes, up from 945 tonnes in 2023. This growth can be attributed to South Africa’s lower output and China’s expanded export activities. Notably, in December 2024, China’s vanadium-nitrogen exports surged five-fold to 377 tonnes, compared to just 67 tonnes a year earlier.

The US was the largest buyer of Chinese vanadium-nitrogen in 2024, importing 892 tonnes, more than double the 335 tonnes purchased in 2023. Canada also saw a dramatic increase in imports, with 323 tonnes imported, a more than five-fold rise from 60 tonnes in 2023. India’s demand also increased by 69%, reaching 317 tonnes in 2024. The US demand for vanadium-nitrogen is expected to continue to rise, as the US government, under President Trump, has pledged to boost domestic construction activities, which will likely increase the demand for steel alloys.

Export Prices and Market Dynamics

Chinese export prices for vanadium-nitrogen are currently in the range of $20.30 to $21 per kilogram, lower than European prices of $23.80 to $24.20 per kilogram. Chinese smelters are more inclined to sell to overseas markets to address domestic oversupply issues. In 2024, China produced 41,500 tonnes of vanadium-nitrogen, surpassing domestic steel mills' consumption of 34,800 tonnes. However, some alloy smelters reduced production from 2023 levels due to negative profit margins and weaker steel demand.

China's Copper Imports Decline Amid Global Supply Shortage

China's Copper

In August 2023, China's copper concentrate imports dropped by 4.6% compared to the same period in 2022, according to recent customs data. This decline is primarily attributed to a global shortage of copper concentrate, driven by production disruptions at key mining sites worldwide. Despite a surge in domestic demand from copper smelters, which saw an additional 800,000 tons of smelting capacity come online during the second half of 2023, supply constraints outweighed the demand increase.

China's smelters, anticipating peak activity in September and October, boosted imports by 18.9% from July to restock reserves. A key factor in China's sourcing strategy has been increased imports from Serbia, making up 30.5% of China’s total copper concentrate imports from January to August—an increase of 26.7% compared to the previous year. This rise is largely due to Zijin Mining’s expansion at the Cukaru Peki copper-gold mine in Serbia.

The National Bureau of Statistics reported that China’s refined copper production reached 8.908 million tons from January to August, a 6.2% year-on-year increase, underscoring China's ability to ramp up production despite global supply challenges.

China’s JDC raises stake in major molybdenum mine

Jinduicheng Molybdenum

China’s JDC raises stake in major molybdenum mine as Jinduicheng Molybdenum (JDC) agreed to buy an additional 24% of Jinsha Molybdenum from Zijin Mining. The deal values the stake at 1.731bn yuan and lifts JDC’s total holding to 34%. Meanwhile, Zijin keeps control with 60%, and a local government retains 6%.

China’s JDC raises stake in major molybdenum mine because the asset sits at the center of China’s future molybdenum growth pipeline. Jinsha Molybdenum owns the Shapinggou molybdenum mine, described as one of the world’s largest porphyry molybdenum deposits. As a result, the transaction signals a coordinated push to lock in long-life concentrate supply and de-risk a large buildout.

China’s JDC raises stake in major molybdenum mine with the timing aligned to a multi-year construction program. Shapinggou carries roughly 2.1mn tonnes of molybdenum resources at an average grade of 0.187%. The project targets about 22,100 t/yr of unroasted molybdenum concentrate after roughly four and a half years of construction. Therefore, JDC’s larger stake can speed permitting execution, capex discipline, and downstream planning toward first output in 2029.

Why Shapinggou changes China’s molybdenum balance

Shapinggou’s scale strengthens Zijin’s molybdenum position even after selling down minority equity. Zijin’s molybdenum resources are expected to rise sharply once Shapinggou starts, expanding the company’s leverage to the steel, energy, and industrial alloy cycles. However, the near-term market impact will remain limited until construction converts resources into consistent concentrate volumes.

The mine also reinforces multi-asset synergies across Zijin’s copper-molybdenum footprint. Zijin already operates copper-molybdenum mines in Tibet and Heilongjiang, which can support shared technical expertise and procurement. Meanwhile, JDC’s participation adds a dedicated molybdenum operator’s processing knowledge to improve recovery and product consistency.

The strategic logic behind JDC’s bigger stake and the downstream JV

JDC’s increased ownership signals more than financial exposure to concentrate margins. JDC can influence project sequencing, concentrate marketing strategy, and future conversion into molybdenum metal. Therefore, the planned joint venture to produce molybdenum metal and processed products looks like a deliberate move toward deeper vertical integration.

The 51/49 structure favors JDC’s operating influence while keeping alignment with the mine owner network. That structure can also help coordinate long-term sales into specialty steel and superalloy value chains. Meanwhile, buyers will watch whether the partners add roasting, ferromolybdenum, or oxide capacity to reduce reliance on third-party processors.

The Metalnomist Commentary

This transaction looks like a classic “resource security plus downstream capture” play. However, execution risk stays real because the value depends on delivering concentrate on schedule. If Shapinggou ramps smoothly, China’s molybdenum supply chain tightens its control over a strategic alloying metal.

China’s Xihang to build high-purity gallium facility as chip supply chains tighten

gallium

China’s Xihang to build high-purity gallium facility in Shanxi, targeting semiconductor-grade material security. China’s Xihang to build high-purity gallium facility with a 200 t/yr nameplate, signalling another step in China’s upstream-to-wafer integration push. China’s Xihang to build high-purity gallium facility as producers race to lock in critical inputs for compound semiconductors.

Shenzhen Xihang Semiconductor signed an agreement with the Lvliang municipal government to construct a new high-purity gallium and compound materials plant. The project will sit in the Lvliang Economic Development Zone in Shanxi province. Meanwhile, the company committed 244mn yuan of investment for the facility.

A 7N gallium target shifts the focus to quality, not just volume

China’s Xihang to build high-purity gallium facility designed for 99.99999% gallium, a purity level aligned with demanding electronics applications. This 7N target matters because downstream compound materials require tight impurity control. As a result, the project focuses on qualification capability and process stability, not only capacity.

The plant also plans associated downstream compound materials output. That structure can shorten lead times and reduce conversion losses across the chain. Therefore, integrated sites can compete on both yield and reliability when customers tighten specifications.

Vertical integration accelerates as geopolitics reshapes chip inputs

China’s Xihang to build high-purity gallium facility during a period of intensifying technology competition and supply-chain localization. Several Chinese semiconductor producers now aim to control the chain from crude gallium feedstock to compound wafers. Meanwhile, this approach supports faster iteration in R&D for advanced chip technologies.

Xihang, established in 2022, positions itself as a semiconductor and electronic components producer. However, the project’s commissioning timeline remains undisclosed. Therefore, near-term market impact depends on build speed, purification yields, and customer qualification cycles.

The Metalnomist Commentary

Gallium strategy is shifting from “access” to “assurance.” However, 7N output only matters after sustained qualification and stable delivery. The winners will pair upstream purity with downstream wafer partnerships.

China's August Nickel Metal Imports Surge, Exports Drop

China's Nickel

China’s nickel metal imports saw a significant rebound in August, largely driven by delayed shipments from Russia in July finally arriving. The gap between Chinese domestic nickel prices and London Metal Exchange (LME) nickel prices narrowed, leading to a sharp reduction in nickel exports.

According to customs data, China imported 8,794 tonnes of nickel metal in August, more than doubling the volume from the previous month and marking a 28% increase from the same period last year. The dip in imports in July was mainly attributed to logistical challenges, which were resolved by August, resulting in the spike. Russian exports, which usually maintain a steady level each month, rose sharply in August to 5,242 tonnes, compared to just 946 tonnes in July.

Nickel imports from Indonesia remained stable in August, reaching 1,232 tonnes, reflecting a 13% month-on-month increase. Despite the August surge, China's total nickel imports for the January-August period fell by 15%, amounting to 54,713 tonnes. The decline was due to reduced shipments from Russia, Australia, and Canada, which outweighed the increase in Indonesian imports. Indonesia is increasingly becoming China’s main source of nickel feedstock, replacing traditional suppliers.

Exports Fall Amid Stable Domestic Supply

In contrast, China’s nickel metal exports dropped to 12,496 tonnes in August, a 17% decline from July. However, exports were nearly eight times higher than a year earlier. Taiwan remained the leading export destination due to its close proximity to an LME warehouse, making it a key hub for trade.

During the January-August period, China’s total nickel exports more than tripled, reaching 71,020 tonnes. South Korea also emerged as a major destination, accounting for 37% of China’s total exports, a position similar to Taiwan, driven by geographical convenience.

China Vanadium Consumption Set to Rise in 2026 as VRFB Demand Accelerates

Vanadium

China vanadium consumption is expected to rise in 2026 as vanadium redox flow batteries, steelmaking, lithium iron phosphate cathode materials and denitration catalysts increase demand. The strongest growth is likely to come from VRFB-based energy storage, where projects are entering a more concentrated construction and commissioning phase.

China vanadium consumption reached 125,900t of vanadium pentoxide equivalent in 2025, up 6.1% from 2024. The market is now shifting from a steel-dominated structure toward a more diversified demand base.

China vanadium consumption still depends heavily on steel, but the share of energy storage has expanded quickly. Steel accounted for 70.9% of total demand in 2025, down from 87.9% in 2021. Energy storage rose to 20% of total use from only 4% over the same period.

This change is strategically important for vanadium producers. Demand is no longer driven only by construction steel, rebar and alloy additions. It is increasingly tied to long-duration energy storage, grid stability, batteries, catalysts and higher-value industrial applications.

VRFB Storage and Steel Demand Drive the 2026 Consumption Outlook

Vanadium demand from VRFB energy storage is expected to increase sharply in the second half of 2026. China’s National Development and Reform Commission and National Energy Administration issued a notice on 30 January to improve the generation-side capacity price mechanism, supporting longer-duration storage.

This policy direction matters because VRFB technology is better suited to long-duration applications than many short-duration battery systems. VRFBs offer long cycle life, high safety, deep-discharge capability and easier electrolyte reuse.

China’s VRFB installations in 2026 are preliminarily estimated at 4-5GWh. This forecast reflects projects already under construction and the availability of high-purity vanadium for electrolyte production.

That installation level would require around 32,000-40,000t of V2O5 equivalent. This would represent an increase of 8,000-16,000t from the previous year, making VRFBs the largest source of incremental vanadium demand.

The growth builds on rapid progress in 2025. VRFB projects with completed electrolyte filling totalled about 3,037.5MWh last year, up 1,027.3MWh from 2024. China’s cumulative VRFB installed capacity reached about 6,064.5MWh by the end of 2025, with an average duration of 4.12 hours.

The market is now moving from pilot-stage expansion to larger system deployment. As more long-duration storage projects reach construction and commissioning, vanadium electrolyte demand could become more predictable.

Steel remains the largest end-use sector. Vanadium demand from China’s steel industry is expected at 92,000-95,000t in 2026, up 3,000-6,000t from 2025.

The increase is tied to stronger demand from machinery, energy, shipbuilding, automotive and rail sectors. These ferro-vanadium end-use segments are expected to grow by around 1.2% in 2026.

The steel demand signal was already visible in the first quarter. Steel-sector vanadium consumption reached around 22,600t, up 1,800t from a year earlier.

Rebar could also provide support. Output of higher-grade steel reinforcement bar is expected to rise as infrastructure investment accelerates. Production licence rules for construction rebar took effect on 1 April, while quality traceability requirements have expanded.

These rules should raise the share of vanadium-nitrogen micro-alloyed hot-rolled rebar. That would support demand for vanadium-nitrogen alloy, especially in higher-strength construction products.

The 2025 steel data show a more complicated picture. Vanadium consumption in the steel sector reached around 89,300t, up 1,700t from 2024. However, vanadium-nitrogen alloy consumption fell by 3.8% to 36,690t because rebar’s share of vanadium use declined.

China’s rebar output fell to 186.3mn t in 2025, down 4.5% from a year earlier. This reduced vanadium demand from traditional construction steel.

Ferro-vanadium performed better. FeV50-equivalent consumption rose by 10.4% to around 39,985t, supported by stronger downstream output in several industrial sectors.

Automotive production reached 34.778mn units in 2025, up 9.8%. Civil steel shipbuilding totalled 52.295mn deadweight tonnes, up 18%. Excavator output rose by 17% to 379,643 units.

Machine tool output also increased. Metal-cutting machine tool production rose by 9.7%, while metal-forming machine tool output increased by 7.2%. These sectors helped offset weakness in rebar.

Vanadium intensity also rose. China’s vanadium use per tonne of crude steel increased to 51g of vanadium metal equivalent in 2025 from 48g in 2024. Rebar intensity edged up to 152.5g, while other steel products rose to 26.6g.

LFP cathode materials will provide another smaller but fast-growing demand source. Vanadium consumption from LFP cathodes is estimated at 2,000-2,500t in 2026, assuming a typical 0.2% V2O5 addition rate.

That would be up by 1,000-1,500t, representing growth of 100-150%. The base remains small, but the rate of increase is significant.

Denitration catalysts should also support demand. Chemical-sector vanadium consumption is expected at around 7,000t in 2026, up about 500t, or 7.7%. Demand will be supported by catalyst replacement, new coal-based thermal power projects and higher sulphuric acid output.

In 2025, chemical-sector vanadium use was around 6,500t, up 200t from 2024. Titanium-alloy-related consumption fell by around 400t, tracking weaker Chinese titanium product exports.

Supply Growth Remains Limited by Feedstock and Cost Pressure

China’s vanadium supply remains highly concentrated, but output growth is not straightforward. The country accounted for 68.8% of global vanadium capacity in 2025 and 72.4% of global production.

China’s total vanadium capacity reached 277,600t in 2025. Actual output was 163,900t, down 900t from 2024.

The production base is dominated by vanadium slag. Output from vanadium slag reached 141,300t in 2025, broadly unchanged from the previous year.

Some producers reduced supply. Xinjiang Da’an and Yunnan Yukun did not produce, cutting combined output by about 8,000t. Other producers, including Chengsteel, Desheng and Dagang, raised output by around 15%, offsetting part of the loss.

Stone-coal-based vanadium output fell more sharply. Production declined to 7,600t in 2025, down 2,600t from 2024, as lower prices left all stone-coal producers loss-making.

This route remains highly price-sensitive. At current price levels, only one large-scale stone-coal producer is operating, with output of around 100-120 t/month of ammonium metavanadate on a V2O5-equivalent basis.

A Shaanxi-based producer with capacity of 300-350 t/month has been suspended since early 2026 because of safety issues. It is unlikely to restart in the first half.

Vanadium flake prices rose to 83,000-84,000 yuan/t in March, prompting some stone-coal producers to consider restarts. However, current prices still appear insufficient to drive a large supply response.

Even when prices approached 110,000 yuan/t in 2023, stone-coal-based output only reached about 11,000t. This suggests that 2026 output growth from stone coal will likely remain limited.

Secondary resources are becoming more important. Vanadium output from spent catalysts and other secondary sources rose to 15,100t in 2025, up 1,900t from 2024.

This included about 6,700t from alumina by-product recovery, up around 1,700t. Output from spent catalysts and petroleum residues stayed broadly stable despite lower vanadium prices.

The reason is co-product economics. Vanadium is often recovered alongside molybdenum and tungsten from secondary feedstocks. Higher molybdenum and tungsten prices supported operating rates and helped keep secondary recovery viable.

Secondary output is expected to remain broadly unchanged in 2026. Feedstock availability is relatively stable, but China’s restrictions on solid-waste imports since 2017 limit the potential for major raw material growth.

Vanadium slag-based supply may edge higher in 2026, but feedstock constraints create uncertainty. Qinhuangdao Baigong completed a 10,000 t/yr V2O5 line in early 2026 and is ramping toward normal operations. Its 2026 output guidance is around 5,000t.

However, tighter domestic feedstock availability could offset this addition. Vanadium-titanium magnetite supply in the Panzhihua area is particularly constrained, potentially cutting output by about 4,500-5,000t of V2O5 equivalent.

Producers in Sichuan and Yunnan may need to source vanadium-titanium magnetite from the Chengde area or increase imports to keep output in line with 2025. A northeastern steelmaking-based vanadium producer has also reduced vanadium-titanium magnetite imports since December 2025.

This creates a cautious supply outlook. China’s vanadium output may edge higher in 2026, but the increase depends on whether new slag-based capacity can offset feedstock tightness and further weakness in stone-coal production.

The market therefore faces a potential demand-led tightening risk. VRFB demand is rising quickly, steel demand is improving modestly and smaller sectors are growing. Supply growth, meanwhile, remains constrained by feedstock, cost pressure and limited secondary resource availability.

For vanadium producers, the key opportunity lies in high-purity electrolyte-grade material. VRFB demand requires reliable vanadium quality, stable supply and long-term availability. Producers that can supply battery-grade vanadium will be better positioned than those focused only on metallurgical demand.

For steel users, the issue is price exposure. If VRFB demand absorbs more vanadium units, ferro-vanadium and vanadium-nitrogen alloy buyers could face stronger competition from the energy storage sector.

For energy storage developers, the issue is raw material security. VRFB growth depends on enough high-purity vanadium to support electrolyte production. Supply constraints could affect project economics if demand accelerates faster than conversion capacity.

The Metalnomist Commentary

China’s vanadium market is entering a new phase where steel remains the base, but VRFBs set the growth direction. The strategic tension in 2026 will be whether constrained supply can keep pace with energy storage demand without pricing steel users out of the market.

China's LMFP Battery Plant Boosts Cathode Material Market

Battery LFP

China’s LMFP battery materials sector takes a leap forward with Shanxi Tewashi’s 100,000 t/yr plant launch.

China’s Shanxi Tewashi Energy has officially started production at its new 100,000 t/yr lithium ferro-manganese phosphate (LMFP) cathode material plant. Located in Changzhi city, the facility is equipped with 16 fully automated production lines and marks a major investment in next-generation lithium-ion battery technology. The company, formed in late 2023, is a joint venture between Qianyun High-tech Energy and state-owned Shanxi Changgao Zhihui Group.

This launch further underscores China’s strategic focus on expanding domestic LMFP output. LMFP cathode materials offer higher energy density and lower costs compared to traditional lithium iron phosphate (LFP), making them attractive for electric vehicles. However, market analysts note that LMFP’s shorter cycle life and reduced discharge performance remain challenges for widespread adoption. Nevertheless, Chinese firms are doubling down on development. Major players like Hunan Yuneng and Ningbo Ronbay are building large-scale LMFP facilities to capture future market share.

The push into LMFP reflects China’s evolving battery supply chain strategy. As battery manufacturers aim to improve performance and reduce reliance on critical raw materials like nickel and cobalt, LMFP offers a viable alternative. With new LMFP projects launching across Shanxi, Hubei, and Gansu provinces, China is positioning itself as the global leader in diversified cathode active materials. The ramp-up of LMFP output may also influence global pricing dynamics for both LFP and emerging sodium-ion chemistries.

The Metalnomist Commentary

China's aggressive expansion of LMFP cathode production signals a pivot toward alternative battery chemistries. As the global EV sector seeks higher energy density at lower cost, Chinese manufacturers are racing to commercialize LMFP at scale—potentially reshaping the future of EV battery composition.

China’s Titanium Sponge Exports Surge While Imports Decline in 2023

Titanium Sponge

China’s Titanium sponge exports saw a significant increase during January-September 2023, driven by heightened demand from countries like the United States, Japan, and South Korea amid the ongoing Russia-Ukraine conflict. However, imports into China decreased due to ample domestic availability and declining local prices, which remained highly competitive compared to international markets.

Export Trends: Rising Demand from the U.S. and Japan

During the first nine months of 2023, China exported 4,362 tons of Titanium sponge, reflecting a 24% increase compared to the 3,516 tons shipped during the same period in 2022, according to customs data. This surge was largely fueled by reduced global spot supplies following the start of the Russia-Ukraine conflict in February 2022. Russia and Ukraine are significant producers of Titanium sponge, alongside other nations such as Kazakhstan, Saudi Arabia, and Japan.

In September 2023, exports totaled 567 tons, a 38% rise from the 411 tons shipped in September 2022. However, this was a 24% decline from the 744 tons exported in August. Key export destinations included Japan (224 tons), the United States (100 tons), and Sweden (60 tons). A notable contract by a Yunnan-based producer to supply 1,000 tons of 99.7% sponge to a U.S. buyer, with shipments scheduled for May 2025, highlights China’s growing footprint in the global Titanium sponge market.

Import Decline: Sufficient Domestic Supply and Competitive Pricing

China’s Titanium sponge imports fell by 25%, with only 100.4 tons brought in during January-September 2023, compared to 133.7 tons in the same period in 2022. The decline is attributed to adequate domestic availability and weaker prices in the local market. The average price for 99.7% grade Titanium sponge in China during the period was ¥50,712 per ton (approximately $7.10 per kg), significantly lower than the European average of $11.45 per kg.

Domestic Market Stability Amid Thinner Margins

Despite rising exports, China’s domestic Titanium sponge market remains stable, though profit margins have thinned, with some producers operating at a loss. Prices for 99.7% grade sponge as of early November were assessed at ¥43,000-44,000 per ton ex-works, the lowest levels since February 2016. Similarly, 99.6% grade sponge was priced at ¥42,000-43,000 per ton ex-works.

Producers in regions such as Panzhihua have also shifted focus to export markets, including India and Europe, to compensate for declining domestic profitability. Notably, the continued suspension of production by Ukraine’s Zaporozhe Titanium and Magnesium (ZTMC) since February 2022 has further solidified China’s position as a key supplier to international markets.

Outlook: Competitive Advantage Amid Global Supply Constraints

China’s robust export growth underscores its critical role in the global Titanium sponge market, especially in light of supply disruptions caused by geopolitical factors. Competitive pricing and stable domestic production ensure that China remains a leading supplier, even as other producers face challenges in meeting global demand.

China’s Jiaozuo Orient to build battery-grade zirconia plant

Jiaozuo Orient, ZrO2 plant

China’s Jiaozuo Orient to build zirconia plant to target fast-growing battery materials demand. China’s Jiaozuo Orient to build zirconia plant with 10,000 t/yr designed capacity for battery-grade, high-purity composite zirconia. As a result, the company positions itself for solid-state battery supply chains.

China’s Jiaozuo Orient to build zirconia plant in Jiaozuo, Henan, after receiving project approval on 5 January. The subsidiary sits under Guangdong Orient Zirconic, China’s largest zirconium producer. Meanwhile, the plan supports a broader downstream expansion strategy across zirconium chemicals and ceramics.

Battery-grade zirconia capacity targets LLZO and solid-state battery adoption

High-purity composite zirconia supports advanced battery materials. LLZO, a lithium lanthanum zirconium oxide electrolyte, uses high-purity zirconium inputs. Therefore, zirconia investments now track solid-state battery pilot lines and future scale-up.

The new site will be built in two phases. Each phase will add a 5,000 t/yr production line. However, the second phase timing will depend on market demand and commercial traction.

Integrated zirconium feedstock chain strengthens cost and quality control

China’s Jiaozuo Orient to build zirconia plant alongside an upstream feedstock buildout. A sister subsidiary plans a 60,000 t/yr battery-grade zirconium oxychloride project. As a result, the group can run an integrated chain from oxychloride to high-purity zirconia.

This integration can lower conversion risk for customers. It can also improve traceability and consistency for battery-grade specifications. Meanwhile, the group reinforces its technology position in zirconium processing.

The project budget totals 300mn yuan, with a 32-month construction period. The scale remains modest versus bulk industrial zirconia. However, battery-grade quality and purification steps often drive higher value per tonne.

The Metalnomist Commentary

Battery-grade zirconia looks like a strategic hedge on LLZO timelines. However, demand could stay lumpy until solid-state batteries move beyond pilot volumes. Producers that integrate feedstock and purification will capture early qualification wins.

China's Ferro-Silicon Exports See Growth in 2024 Amid Lower Domestic Prices

China’s Ferro-Silicon

Increased Overseas Demand Drives Export Surge for Ferro-Silicon in China

China’s ferro-silicon exports experienced a significant rise in 2024, driven by increased overseas demand and a decline in domestic prices. According to customs data, China exported 405,089 tonnes of ferro-silicon in 2024, marking a 6.8% increase from the 379,353 tonnes exported in 2023. The surge in exports reflects the growing demand from international buyers seeking cost-effective alternatives amid falling prices in the Chinese market.

December Exports Surge with Price Declines

In December 2024, China’s ferro-silicon exports totaled 30,870 tonnes, marking a 31% increase compared to 23,644 tonnes in December 2023 and a 19% rise from November 2024. The average price for 72% grade ferro-silicon in 2024 was 6,358 yuan per tonne ($871), reflecting an 11% decrease from the previous year, when prices stood at 7,106 yuan per tonne. This drop in prices has been a key factor in driving China’s ferro-silicon exports, as international buyers capitalize on the more competitive pricing.

Lower Prices Lead to Global Competitiveness

Despite the price reductions, which hit the lowest levels since December 2020, China’s ferro-silicon industry remains competitive in global markets. On December 31, 2024,  assessed prices for 72% grade ferro-silicon at 5,950-6,150 yuan per tonne, primarily driven by tepid demand in the downstream steel and construction sectors. The Chinese market’s ability to offer lower prices for ferro-silicon positions the country as a dominant exporter, particularly as global industries continue to seek cost-effective materials.

In conclusion, China’s ferro-silicon exports are on an upward trajectory in 2024, driven by lower domestic prices and robust international demand. The country’s ability to remain competitive in the global ferro-silicon market will likely support further export growth in the coming years.

China's Titanium Sponge Production to See Significant Expansion Amid Demand Growth

China's Titanium Sponge

China's titanium sponge production capacity is set to experience a major boost, potentially reaching between 300,000 and 500,000 tonnes per year over the next three to five years, according to An Zhongsheng, secretary-general of the China Nonferrous Metals Industry Association's titanium zirconium and hafnium branch (CNIA-Ti). This expansion is expected to be driven by increased demand across various sectors including aerospace, marine engineering, chemical production, computer, communication and consumer electronics (3C), daily necessities, and air conditioning, as reported at the China and CIS Titanium Industry Development Forum held in Xi'an, Shaanxi province.

Global civil aviation demand, recovering from the impacts of the Covid-19 pandemic, has put strain on aviation-grade titanium sponge supplies. An emphasized that while the aerospace industry is recovering, industrial sectors are propelling China's titanium market with consistent growth in recent years.

Currently, China's titanium sponge production capacity hovers around 300,000 tonnes per year. In the broader market, titanium's growing use in civilian products is anticipated to be a significant growth catalyst for the Chinese titanium industry.

Although global demand for titanium in the medical industry has surged, Chinese demand in this sector has been hampered by healthcare reforms promoting the use of cost-effective materials. Despite this, prices for titanium sponge are projected to remain relatively stable, enhancing its appeal across a range of applications. An Zhongsheng reassured industry stakeholders that China’s domestic supply of titanium sponge will meet future demands due to planned capacity expansions.

The anticipated rapid growth in titanium sponge production marks a transition for titanium from a rare metal to a more commonly used material, according to An. In the first half of this year, China produced 123,500 tonnes of titanium sponge, according to CNIA-Ti data.

Nevertheless, China continues to rely on imports for approximately 35-40% of its titanium ores and concentrates, reflecting its position in the global supply chain. Last year, global production of titanium ore and concentrate amounted to 8.75 million tonnes (t) of titanium dioxide equivalent, with China contributing 37%, followed by Mozambique (18%), South Africa (11%), and Canada (6%).

In the realm of titanium dioxide production, China led with 55% of global output in 2023, maintaining growth through domestic capacity expansions. Additionally, the world's titanium sponge production rose by 29% to 347,000 tonnes in 2023, with China’s output surging from a 25% share in 2022 to a dominant 63%. Russia, Japan, and Saudi Arabia also witnessed increases in their titanium sponge output, while Ukraine reported zero production.

For titanium mill products, global production in 2023 reached 248,000 tonnes, with China accounting for a commanding 64%, trailed by the United States (14%), Russia (13%), Japan (6%), and Europe (3%).

XTC New Energy LFP LMFP Capacity Expansion Targets Higher-Density Battery Materials

XTC New Energy

XTC New Energy LFP LMFP capacity will expand in Sichuan as the Chinese battery materials producer adds another 40,000 t/yr of lithium iron phosphate and lithium ferro-manganese phosphate production. The second-phase project will be built in Ya’an city and is expected to start production in June 2028.

XTC New Energy LFP LMFP capacity at the Ya’an plant will reach 80,000 t/yr after both phases are completed. The first phase already provides 40,000 t/yr of LFP capacity, while the new phase will add flexible LFP and LMFP output.

XTC New Energy LFP LMFP capacity expansion reflects China’s continued investment in lower-cost and manganese-enhanced battery chemistries. The project will be operated by subsidiary Ya’an XTC New Energy, with total investment expected at 743mn yuan.

The move comes as Chinese battery material producers position for growing power battery demand and greater interest in manganese-based cathode active materials.

LMFP Gains Momentum as Producers Seek Better Energy Density

LMFP is gaining attention because it can offer higher energy density than conventional LFP. This makes it attractive for battery makers seeking to improve driving range while keeping costs below higher-nickel chemistries.

However, LMFP still faces trade-offs. Batteries using LMFP cathode active material generally have shorter cycle life and lower charge-discharge efficiency than LFP batteries.

This means LMFP is not a simple replacement for LFP. Instead, it is likely to develop as a complementary chemistry for applications where higher energy density is more valuable than maximum cycle life.

The expansion also shows how manganese is becoming more important in battery materials. Manganese-based chemistries can reduce reliance on more expensive or supply-sensitive metals while supporting performance improvements.

For XTC, adding LMFP capacity gives the company more flexibility. It can serve established LFP demand while preparing for customers that want manganese-enhanced phosphate materials.

China’s Cathode Supply Chain Expands Into Manganese-Based Materials

XTC is not alone in expanding LMFP capacity. Several Chinese battery material producers are adding or building manganese-based phosphate projects.

Ningxia Hengchuang Nami began building the first phase of a 30,000 t/yr LMFP plant in Yinchuan in March. Hunan Yuneng, China’s largest LFP producer, is also building an LMFP materials plant.

Jiangxi Greatpower launched the first phase of a 20,000 t/yr LMFP plant in Pingxiang in January. These projects show that China’s battery materials industry is preparing for broader adoption of LMFP.

The trend is strategically important for the cathode supply chain. LFP has already become a major chemistry in electric vehicles and energy storage because of its cost advantage, safety and long cycle life.

LMFP could extend that platform by adding more energy density while preserving some of LFP’s cost and safety benefits. If technical limitations improve, LMFP may become a larger part of China’s battery chemistry mix.

For raw materials, the shift could support manganese demand in battery applications. It also reinforces China’s lead in scaling new cathode chemistries from pilot production to industrial capacity.

The Metalnomist Commentary

XTC’s Ya’an expansion shows that China’s battery materials race is moving beyond simple LFP scale. LMFP is becoming a serious development path because it offers a practical route to higher energy density without fully moving into costlier high-nickel systems.

China's Ferro-Nickel Imports Surge in September, Bolstered by Indonesian Supply and Stainless Steel Demand

China's Ferro-Nickel

China’s ferro-nickel imports saw a robust recovery in September 2024, fueled by delayed shipments from Indonesia and heightened demand from the domestic stainless steel industry. Imports totaled 737,358 tons, representing a 41% increase from August and a 13% year-on-year rise.

Indonesian Supply Drives Recovery

Shipments from Indonesia nearly doubled month-on-month to 715,030 tons, thanks to increased production from new capacities, including Nadesico Nickel Industry (NNI) and Shuoshi. These facilities have significantly ramped up their operations, contributing to the surge in supply.

• Nadesico Nickel Industry (NNI): A collaboration between Delong, a leading nickel and stainless steel producer, and CNGR, a major Chinese battery material producer. Located in north Morowali, central Sulawesi, NNI has activated six of its planned eight rotary kiln electric furnaces (RKEF), with a production capacity of 80,000 tons per year in nickel metal equivalent. While primarily producing low-grade nickel matte, NNI can switch to ferro-nickel production based on market conditions.

• Shuoshi: A subsidiary of China’s Zhenshi Group, Shuoshi operates 12 RKEF lines in the Huabao Industrial Park, also in Morowali. With a capacity of 120,000 tons per year in nickel metal equivalent, Shuoshi is a significant contributor to Indonesia’s ferro-nickel output.

Year-to-Date Import Trends

From January to September 2024, China’s total ferro-nickel imports reached 6.41 million tons, a 6% increase compared to the same period in 2023. However, this growth is markedly slower than the 46% surge recorded in the previous year, reflecting a combination of factors:

1. Indonesian Restrictions: Indonesia’s regulatory limitations on pyrometallurgy process capacities have constrained supply growth.
2. Stainless Steel Demand Slowdown: China’s stainless steel sector, a key consumer of ferro-nickel, has faced a deceleration in growth, impacting import volumes.

Outlook

The revival of imports in September highlights the resilience of China’s ferro-nickel market amid fluctuating global dynamics. With new production capacities in Indonesia stabilizing, and the potential for further demand from the stainless steel sector, the coming months will determine whether this upward trend can sustain itself.

China’s Predatory Steel Exports : A Threat to Latin America

The Latin American steel industry is grappling with a severe crisis precipitated by China’s predatory trade practices. The influx of cheap Chinese steel has flooded the market, imperiling local producers' livelihoods. Gabriela Fajardo Mejia, an expert in international relations at the University of Navarra, highlighted in her interview with Diálogo Américas that China’s steel overproduction endangers 1.4 million jobs across Latin America’s steel sector, compelling numerous companies to cease operations and lay off workers. Furthermore, Chinese steel production often bypasses established environmental and quality standards, with transparency regulations being routinely ignored.

Henry Ziemer, a researcher at the Center for Strategic and International Studies (CSIS), pointed out that China's slowdown in real estate and construction has diminished domestic steel demand. Consequently, Chinese producers are compensating for reduced domestic sales through aggressive export strategies. With the U.S. market becoming increasingly inhospitable for Chinese steelmakers, they are now targeting Latin American countries, which present fewer trade barriers, to dispose of their surplus inventory.

The Chinese government's subsidies for steel production and exports during the pandemic exacerbated the issue, leading to a global proliferation of low-cost Chinese steel. In retaliation, Mexico, Chile, and Brazil have significantly raised tariffs on Chinese steel imports to safeguard their domestic industries, and other nations are expected to follow suit. Alejandro Wagner, the former Secretary-General of the Latin American Steel Association (Alacero), indicated in a BBC interview that the influx of inexpensive Chinese steel has caused significant damage to Latin American steel industries, forcing several major companies to halt their operations.

In March, Chilean steelmaker CAP suspended operations at its Huachipato plant due to the unsustainable business environment created by dumped Chinese steel. Operations resumed only after the Chilean government imposed substantial tariffs on Chinese steel. Similarly, Fabio Galan, president of Colombian steelmaker Acerías Pazdelrio, remarked on the devastating economic impact of cheap Chinese steel imports and called for fair competition.

Reports also suggest that Mexico’s iron ore mines, previously plundered by organized crime cartels, were pivotal in transporting stolen ore to China, highlighting the detrimental effects of China’s opaque and unfair trade practices.

Brazilian steel producer Gerdau temporarily laid off workers at its São José dos Campos plant in response to the unfair competition from Chinese steel. CEO Gustavo Werneck emphasized that this action was merely the initial step in tackling the surge of cheap Chinese steel imports.

Fajardo Mejia underscored the subsidies Chinese steel companies receive, enabling them to lower costs without adhering to quality and environmental standards. She also noted the considerable environmental impact, revealing that Chinese steel production emits 45% more CO2 per ton than Latin American production.

As a countermeasure, imposing tariffs on Chinese steel could escalate trade tensions between Latin American countries and China, with potential retaliatory actions from China, known for its coercive diplomacy. Historical instances, such as China’s bans on Argentine soybean products and Canadian canola seeds, exemplify possible consequences.

CSIS researcher Ziemer highlighted that China, the world’s largest steel producer, generates more steel than the combined output of the next nine largest producers, influencing international prices and destabilizing Latin American economies through dumping practices. He proposed that the current scenario offers an opportunity for the U.S. to collaborate with Latin American countries to counteract China’s unfair trade practices and safeguard domestic industries.

Hoshine Silicon Output Falls as China Photovoltaic Demand Slows

Hoshine

Hoshine silicon output fell sharply in 2025 as weaker photovoltaic demand weighed on China’s largest silicon metal producer. The company produced around 1.45mn t of silicon metal during the year, down 22.3% from 2024.

Hoshine silicon output declined as downstream polysilicon and photovoltaic markets lost momentum. Sales also fell by 10.1% on the year to 1.11mn t, reflecting softer consumption from key solar supply-chain customers.

Hoshine silicon output remains important because the company is a major force in China’s silicon metal market. Its production trends provide a clear signal for supply conditions across aluminium alloys, organosilicon, polysilicon and photovoltaic materials.

China’s wider silicon metal production also weakened. National output fell by 11% on the year to around 4.20mn t in 2025, showing that the slowdown was not limited to one producer.

Polysilicon Weakness Hits Silicon Metal Demand

Polysilicon production fell sharply in 2025, reducing one of the key demand channels for silicon metal. China produced around 1.33mn t of polysilicon during the year, down 27.8% from 2024.

This decline reflects pressure across the solar manufacturing chain. Photovoltaic growth continued, but the pace slowed compared with the previous year.

China’s newly installed photovoltaic capacity reached around 31.7GW in 2025, up 14% from a year earlier. However, this was well below the 28% growth recorded in 2024.

That slowdown matters for silicon producers. Silicon metal is a critical feedstock for polysilicon, which is then used in solar wafers, cells and modules.

When polysilicon output falls, demand for silicon metal weakens quickly. Producers then face lower sales, inventory pressure and weaker pricing power.

Hoshine’s 2025 results show how tightly silicon metal is linked to solar-sector cycles. Even large producers with scale advantages are exposed when downstream photovoltaic demand slows.

Capacity Remains Large Despite Softer Market Conditions

Hoshine still operated at high capacity utilisation despite lower output. The company has 1.22mn t/yr of designed silicon metal capacity, with utilisation reaching 119.2% in 2025.

This indicates that Hoshine continued producing above nameplate capacity, even as output fell from the previous year. The company remains a dominant supplier in China’s silicon metal market.

Hoshine also had 1.73mn t/yr of designed organosilicon capacity by the end of 2025. Organosilicon remains another major downstream channel for silicon metal, serving construction, electronics, automotive, industrial and consumer applications.

The company also had 50,000 t/yr of polysilicon capacity and a further 350,000 t/yr under construction. This shows that Hoshine is still investing in downstream integration despite short-term market weakness.

The expansion strategy carries both opportunity and risk. Integrated silicon-to-polysilicon capacity can improve value capture when solar demand recovers. However, it can also increase exposure to oversupply if polysilicon markets remain weak.

For China’s silicon industry, the key issue is balance. Producers must manage large capacity bases while downstream photovoltaic growth becomes less explosive than in previous years.

The Metalnomist Commentary

Hoshine’s lower silicon output shows that solar-sector growth is no longer strong enough to absorb every upstream expansion. China’s silicon market now faces a more selective phase where cost control, downstream integration and demand timing will determine profitability.