Manganese-based Battery Materials: Differentiated Trends, Cost-Supported Stability

This week, China’s domestic manganese-based battery materials market has shown a differentiated operation trend. The price of battery-grade manganese tetroxide has slightly declined, the price of electrolytic manganese dioxide has slightly increased, and lithium manganate has maintained a weak balance of supply and demand. Although the three varieties have different trends, they are all supported by the cost side. In the short term, the overall market will be mainly stable with limited room for sharp fluctuations, and the industry is gradually transitioning from the resumption transition period to a stable operation stage.

The battery-grade manganese tetroxide market had thin overall transactions this week, with prices slightly declining. From the cost side, the price of upstream electrolytic manganese remained high, providing strong cost support for manganese tetroxide. The demand side became the main inducement for the slight price loosening. The downstream lithium manganate industry has not yet fully recovered, with procurement demand mainly in small rigid-demand orders, rare spot transactions, and overall weak demand that is difficult to absorb price increases, leading to low market transaction activity. Looking ahead, the rigid cost support will continue to underpin prices. Although the downstream demand is unlikely to improve significantly in the short term, it will limit the room for price declines. It is expected that the battery-grade manganese tetroxide market will be mainly stable in the short term, with prices likely to stabilize and limited sharp fluctuations.

Different from the trend of manganese tetroxide, China’s domestic electrolytic manganese dioxide market operated stably this week, with prices slightly increasing. From the cost side, the prices of manganese carbonate ore and sulfuric acid remained high, coupled with the continuous increase in environmental compliance costs, leading to high production costs for enterprises. Enterprises have a firm willingness to maintain prices, adhere to the price bottom line, and have no initiative to make concessions. On the demand side, with the gradual resumption of production of downstream enterprises after the holiday, the procurement atmosphere has improved compared with the previous period. Although the traditional downstream industries such as primary batteries are still mainly digesting pre-holiday inventories, there have been signs of demand recovery, which has provided certain support for prices and driven a slight increase in quotations. In the short term, the rigid support from raw material costs will continue, and it will be difficult for enterprises to adjust their quotations downward. Although it will take time for the downstream demand to fully recover, the overall recovery trend is clear.

The lithium manganate market continued to be in a weak balance of supply and demand this week. The core disturbance on the price side came from the sharp fluctuations in the price of upstream lithium carbonate. The main lithium carbonate contract experienced a sharp limit-down in early March. Although it has a certain transmission effect on the cost of lithium manganate, due to a round of slight increase in lithium manganate prices in the early stage, the current enterprise quotations are stable with no further price adjustment actions. On the supply side, the industry has not yet fully resumed normal operation, with insufficient production capacity release, and the overall industry operating rate remains at a medium level. On the demand side, the downstream battery cell factories, power battery and consumer lithium battery enterprises have weak recovery, with strong wait-and-see sentiment, low procurement enthusiasm, rare market inquiries and thin actual transactions, which is also the main reason for the slight price decline.

Overall, the differentiated trend of the manganese-based battery materials market this week is mainly due to the differences in the pace of demand recovery, while the rigid cost support has become the common main line for all varieties. In the short term, the fluctuations in lithium carbonate prices will continue to affect the lithium manganate market, and the high prices of upstream raw materials such as electrolytic manganese and manganese carbonate ore will continue to support the prices of manganese tetroxide and electrolytic manganese dioxide. Although the downstream demand is gradually recovering, it will take time. It is expected that the manganese-based battery materials market will continue the current differentiated pattern in the short term, with overall stable operation. Among them, electrolytic manganese dioxide may maintain a slight strength, and the prices of manganese tetroxide and lithium manganate will stabilize. In the follow-up, we need to focus on the trend of lithium carbonate prices, the pace of downstream resumption and procurement, as well as the transmission impact from the raw material side.