【SMM Analysis】Steel and New Energy Drive EMM Tech Innovation & Industry Restructuring

As a key fundamental material supporting the stainless steel and new energy battery industries, electrolytic manganese is standing at a critical industrial transformation stage. Driven by tightening environmental policies, accelerating technological iteration, steady traditional demand and booming new energy consumption, the industry features shrinking supply, structural optimization and rising price center, with its strategic value growing increasingly prominent.

Supply and Demand Pattern: Optimized Supply and Dual-driven Demand

1. Supply Side: Centralized Production Restricted by Environmental and Energy Factors

China dominates the global electrolytic manganese output with a capacity share exceeding 95%. The industry cluster is mainly located in the Manganese Triangle bordering Guangxi, Guizhou and Hunan, leveraging local abundant hydropower resources. Restrained by the updated industrial specifications, strict control is imposed on energy consumption, wastewater discharge and solid waste utilization. Backward small-scale capacity is phased out steadily, and production capacity keeps concentrating on leading enterprises, lifting industrial concentration ratio notably.

2. Demand Side: Stable Traditional Demand and Surging New Energy Consumption

Electrolytic manganese demand is jointly boosted by steady consumption from the steel sector and robust growth in new energy batteries. In traditional fields, stainless steel and special steel serve as major consumption areas. Despite moderate demand growth, manganese remains an indispensable alloying material with rigid demand that underpins the fundamental market.

The new energy sector acts as the core growth driver. The rapid penetration of lithium manganese iron phosphate and other new battery types fuels rising demand for high-purity electrolytic manganese. Featuring low cost and high safety, such batteries are widely applied in energy storage and economical new energy vehicles, driving market expansion and promoting high-end upgrading of product structure.

Industrial Trends: Accelerated Green Transition with High-end Development and Integrated Layout as Core Directions

1. Accelerated High-end Product Upgrading

Stringent requirements on product purity and impurity content from downstream new energy sectors push industrial high-end transformation. Manufacturers expand production of high-value-added products including battery-grade manganese sulfate and trimanganese tetraoxide. Electrolytic manganese is evolving from a traditional metallurgical raw material into a core new energy material, with growing proportion of high-end products and optimized profit structure.

2. Integrated Industrial Layout Builds Competitive Moat

High external reliance on manganese ore resources and substantial power costs spur leading enterprises to build integrated industrial chains covering manganese ore, electrolytic manganese and new energy materials. By securing long-term supply of high-grade imported manganese ore, constructing supporting power stations and expanding deep processing business, enterprises hedge against raw material and cost fluctuations and form solid competitive advantages, leading to a widening gap between industry players.

Market Outlook: Short-term Volatility and Medium-term Upward Momentum Fueled by New Energy

In the short run, the stainless steel industry enters off-season with sluggish demand. Steel mills tend to lower procurement prices, putting pressure on prices of metallurgical-grade electrolytic manganese.

In the medium term, large-scale commissioning of lithium manganese iron phosphate capacity will further boost new energy demand for electrolytic manganese. Coupled with tightened environmental supervision and production restructuring, market supply will gradually contract, widening supply-demand gap and lifting the overall price level. In the long term, green low-carbon transformation, high-end product upgrading and integrated industrial layout will dominate industrial development. Leading enterprises with advantages in technology, resources and cost will gain prominent benefits from industrial structural dividends and achieve growth in both sales volume and product prices.