Cost and Demand Dual Drivers Propel HPMSM Market to Break Through Strongly in H2 2025

2025 Review: Market Consolidates at Lows in H1, Stages a Rebound in H2, with Supply-Demand Surplus Continuing to Narrow

(I) H1: Sluggish Supply and Demand, Industry Fluctuates and Consolidates at Lows
In H1 2025, the high-purity manganese sulphate market was generally sluggish, with industry operating rates remaining low for an extended period. The core constraints were concentrated on the demand side: end-user NEVs entered the traditional off-season, and the ternary cathode precursor industry, squeezed by the LFP market and intensified involution, significantly slowed its production schedule. Purchases of high-purity manganese sulphate were primarily for essential restocking, resulting in sluggish market inquiries and weak transactions.
The supply side remained rational, avoiding blind capacity expansion that could worsen the surplus: Manganese salt plants, constrained by expectations of persistently high raw material costs and environmental protection policies, widely adopted a "produce based on sales" strategy. Concurrently, MHP by-product manganese sulphate solution from downstream ternary cathode precursor plants, after purification, supplemented market supply, further alleviating the supply-demand imbalance. Against this backdrop, market prices fluctuated at low levels throughout H1, with the industry's core focus on destocking and stabilizing production, laying a solid foundation for the H2 rebound.

(II) H2: Dual Drivers of Cost and Demand Initiate a Rally in Both Volume and Price
Entering H2, the market experienced a substantial reversal. Dual support from the cost and demand sides converged, driving the industry out of the trough towards higher volumes and prices. The cost side became the primary driver for price increases: sustained rises in upstream sulphur prices pushed up sulphuric acid production costs, coupled with concentrated maintenance at multiple national sulphuric acid units leading to tight supply, causing sulphuric acid prices to surge by over 15%. By month-end December, prices in major production areas like Guangxi and Guizhou exceeded 1,000 yuan/mt. The manganese ore market continued its firm trend, with Australian lump ore prices at Tianjin port rising to 40 yuan/mtu, while Gabonese ore quotations on the overseas market remained high due to regional supply tightness. Additionally, heightened manganese residue treatment standards led to increased specific processing costs and hidden production efficiency losses, sharply raising comprehensive cost pressures for manganese salt plants and making their price quotations increasingly firm.

Demand-side factors simultaneously exerted force to release rigid increments: The accelerated transition to high-nickel ternary cathode precursors drove the continuous release of rigid demand for high-purity manganese sulphate; the residual warmth of the October peak season persisted through the second half of the year, and even as the traditional off-season in December arrived, rigid demand from end-user new energy battery production schedules remained. Although ternary cathode precursor enterprises reduced phased stockpiling, spot cargo digestion proceeded smoothly, with market inquiries and trading volume increasing significantly.

Tight supply-side conditions further amplified upward momentum: Affected by environmental protection-related controls during autumn and winter, small and medium-sized enterprises successively reduced operating rates or halted production; coupled with cautious production control by enterprises amid high costs, the industry generally maintained a produce-based-on-sales model. Spot inventory at mainstream enterprises remained at low levels, with some even falling below safety stock levels, leading to continuously tight spot circulation in core production areas. Additionally, during the second half of the year, the industry's focus gradually shifted to the signing of 2026 long-term contracts, with top-tier enterprises taking the lead in locking in core capacity for the next year. Long-term contracts accounted for over 95% of the total, further tightening spot circulation and boosting price increases.

(III) Core Characteristics of the Full Year: Surplus Margin Narrowed Significantly, Industry Concentration Steadily Increased
Although the high-purity manganese sulphate market remained in a surplus pattern throughout 2025, the surplus margin narrowed significantly compared to previous years, and the industry's supply-demand pattern continued to optimize. The industry's operation throughout the year exhibited a distinct pace of "consolidating at lows in H1 and making a counterattack in H2." The normalization of long-term contract bindings steadily pushed up market concentration, laying the groundwork for a fundamental shift in the supply-demand pattern in 2026.