[SMM Analysis] Impact of Manganese Ore Supply Crisis on Downstream Market

The Q1 production report released in late April revealed that the repair time for the manganese ore terminal will be delayed until Q1 next year, causing a significant increase in manganese ore prices. Although various mineral resources have recently faced supply disruptions, this manganese ore supply crisis is larger in scale and has a profound impact on the downstream industrial chain.

First, the shortage of manganese ore supply will have a profound impact on the steel industry. Since the steel industry accounts for a large proportion of downstream applications and is not sensitive to cost changes, supply shortages may drive up manganese ore prices, especially in cases of high supply chain concentration. Although domestic inventory can partially alleviate short-term tightness, related companies may benefit as the price of imported manganese ore continues to rise.

Second, for manganese compound production companies, the increase in raw material prices may not directly translate into profit growth, especially when downstream product prices do not rise synchronously and downstream acceptance is limited.

In recent years, the manganese chemical and battery materials markets have undergone significant changes and development. Particularly, battery-grade manganese sulfate has become a market hotspot due to its potential applications in the new energy field, although its final actual application is not as widespread as expected. On the other hand, the electrolytic manganese metal (EMM) market has experienced volatile fluctuations, reflecting changes in supply-demand relationships and the impact of technological developments. Additionally, manganese materials appear in various forms in different application scenarios, such as trimanganese tetroxide (Mn3O4) being widely used in soft magnetic materials, while electrolytic manganese dioxide (EMD) is mainly used for alkaline cells and lithium manganese oxide (LMO) cathode materials manufacturing.

Overall, the consumption of the traditional steel industry remains the main market driver. In the future, with the advancement of technology and the promotion of environmental protection policies, the battery materials field is expected to become one of the important growth points for the manganese chemical industry.