【SMM Analysis】Flood Impact Fades! Manganese Sulfate Market Ends Short-lived Upward Trend

Sentiment in China’s battery-grade manganese sulfate market has gradually returned to rationality, as the flood-related factors that previously lifted prices in Guangxi continue to ease.

In early July, continuous heavy rainfall and floods hit major production areas in Guangxi. Rising river levels and disrupted logistics forced multiple manganese sulfate producers to suspend operations for safety inspections and equipment maintenance, triggering a temporary shrinkage of available spot supply. Downstream ternary precursor plants faced delivery pressure and accelerated order chasing. Tight spot supply boosted manufacturers’ willingness to hold goods, pushing battery-grade manganese sulfate prices moderately higher. As flood control conditions improved, suspended facilities resumed production. Effective capacity recovered steadily, expectations of supply shortage faded, speculative sentiment cooled, and prices stabilized into consolidation.

Costs offer solid bottom support. Tax-inclusive delivered prices of sulfuric acid remain elevated in core manganese salt hubs of Guangxi and Guizhou. Although sulfuric acid supply is generally stable, tight regional transport and regular environmental regulations lift production and logistics costs. Manganese sulfate producers face squeezed processing margins. Imbalanced bargaining power makes it difficult to pass cost pressure downstream, so most manufacturers are reluctant to cut prices sharply, limiting downside risks.

On the demand side, operating rates of downstream ternary precursors recover slowly at a mild pace. Having built up inventories of raw materials and finished products earlier, precursor manufacturers can withstand the temporary supply volatility without large-scale restocking. Trading mainly relies on long-term contracts, while scattered spot orders are insufficient to drive directional price moves. The lithium battery market remains divergent: power battery demand stays steady, yet the off-season for consumer lithium batteries caps precursor output growth and restrains manganese sulfate purchases.

The supply crunch caused by floods is only a short-term event-driven shock. The return of production restores loose supply conditions without altering the fundamental oversupply of manganese sulfate. Market participants will closely track two key factors: the resumption progress and operational stability of producers in Guangxi and Guizhou together with potential weather risks, and the implementation of new production schedules for ternary precursors in Q3. Institutions generally expect manganese sulfate to lack sustained upward momentum before tangible and consistent demand growth emerges. Prices are likely to fluctuate within ranges, and clear rallies require firm demand signals from end markets.