【SMM Analysis】Golden Season Fails to Deliver, Manganese Market on Hold; Inventory Drawdown May Emerge in November

Golden Season Fails to Deliver, Manganese Market on Hold; Inventory Drawdown May Emerge in November During the National Day holiday, the markets for manganese sulfate, electrolytic manganese and lithium manganate remained subdued with muted trading sentiment and weaker-than-expected end-user demand. Most manufacturers had finalized monthly production schedules and routine order deliveries before the holiday, resulting in limited new inquiries and spot transactions during the break. The market was characterized mainly by holiday slowdown and cautious waiting at low price levels.

Manganese Sulfate: Disappointing Peak Season, Widespread Plant Maintenance

The manganese sulfate market saw thin trading and scarce new orders over the holiday, with spot transaction activity slowing markedly. On the supply side, most manganese sulfate producers scheduled concentrated shutdowns for maintenance around the holiday, pulling down the industry operating rate. This is partly a seasonal maintenance arrangement, and also reflects producers’ weak confidence in future demand and their initiative to curb output.

Demand stands as the core market contradiction. The traditional peak-season rally of "Golden September & Silver October" did not materialize this year. Downstream cathode material buyers remained reluctant to purchase, and end-user demand stayed sluggish without the expected bulk restocking.

Looking ahead, social inventories are still relatively high. Market participants expect inventory pressure to ease after continuous destocking from mid-to-late October through November, which may bring marginal improvements to supply-demand balance and market sentiment. Notably, the long-term contract signing pattern for manganese sulfate is set to shift. Downstream buyers are less willing to lock in long-term contracts and opt for more spot purchases linked to prevailing market prices, a trend that may exert far-reaching impacts on annual pricing and market dynamics.

Electrolytic Manganese: Stable Off-season Performance, Stainless Steel Output Cuts Weigh on Demand

The electrolytic manganese market stayed range-bound during the holiday with quiet spot trading, typical for the off-season. Similar to manganese sulfate, fresh deals were scarce; producers mainly fulfilled existing orders and maintained routine production, leaving the market without clear price direction.

Demand pressure primarily stems from the stainless steel sector. More stainless steel mills have scheduled maintenance and load reductions, directly curbing procurement of electrolytic manganese. Amid shrinking stainless steel output, fundamental support for electrolytic manganese is weak, leaving little room for price gains. The market is projected to remain stable with a soft bias in the short run.

Lithium Manganate: Lithium Carbonate Price Drop Triggers Wait-and-See Sentiment, Weak Order Book

Lithium manganate producers generally kept operations running during the holiday yet faced insufficient order backlogs amid bearish trading. The demand slump was directly driven by sharp swings in lithium carbonate prices. The notable price decline of lithium carbonate in September split market views on its future trend. Downstream cell makers and buyers adopted a wait-and-see stance, fearing further price falls if they made large purchases at current levels. Starting in October, buyers have postponed major procurement and only placed small orders to meet immediate production needs.

This sentiment shift is clearly reflected in lithium manganate orders: new contract volumes are poor and production schedules have slowed. While lithium manganate has relatively independent cost pass-through, downstream caution across the lithium material price chain has materially suppressed near-term purchasing appetite.

Market Outlook

Overall, manganese-related products traded weakly over the National Day holiday. Manganese sulfate, electrolytic manganese and lithium manganate all faced varying degrees of demand headwinds. Manganese sulfate features a failed peak season, plant maintenance and transforming long-contract rules; inventory destocking will be critical to any marginal recovery around November. Electrolytic manganese remains in the off-season, with stainless steel production cuts continuing to weigh on downstream consumption. Lithium manganate is dragged down by falling lithium carbonate, with pervasive buyer caution and limited near-term order improvement.

Key monitoring points going forward: manganese sulfate social inventory destocking pace and shifts in long-contract practices, execution of October stainless steel mill production cuts, stabilization signals for lithium carbonate, and downstream restocking rhythm for lithium manganate.

In the short term, the manganese complex remains in a weak landscape with no solid foundation for sharp price rebounds. A meaningful demand recovery may not arrive until around November.