[SMM Analysis] Long-term contracts fail to change the loose supply pattern, and the price center of manganese sulphate is expected to be in the doldrums in the future market.

In May and June 2026, battery-grade manganese sulphate entered the demand off-season, and the overall market weakened slightly, but the decline was very limited, with no rapid or deep downturn. Earlier in H1, driven by the policy dividend of export tax rebates for ternary batteries, downstream enterprises concentrated on front-loading export orders, leading to intermittent tightness in market supply. Factories ran production schedules at full capacity, leaving no time for equipment maintenance. After entering May, end-use demand also slowed, and some manganese salt enterprises focused on equipment maintenance, causing a periodic drop in industry production. In June, equipment under maintenance was restarted intensively, driving market supply up again and returning circulating supply to a loose state.

The current market trading pattern is dominated by fulfillment of existing long-term agreements, with new purchase inquiries and bulk restocking orders being extremely scarce, making it difficult to improve the loose supply-demand situation. At the same time, a slight pullback in sulphur prices marginally eased production costs, weighing on market bearish sentiment and further slowing the purchasing pace of traders and downstream enterprises. However, prices of core raw materials such as manganese ore and sulphuric acid remained in a high range, and long-term orders locked in base sales, effectively capping the room for a deep price decline under the futures market, which overall remained in the doldrums.

In the short term of H2, there are two rounds of structural demand support that can ease downward pressure during the off-season. In Q3, orders for mid-nickel precursors from downstream will steadily increase, and this product route has higher unit consumption of manganese materials, forming sustained rigid demand support and preventing prices from continuing to weaken. In Q4, approaching the expiration window of the ternary battery export tax rebate policy, battery enterprises will concentrate on front-loading export orders and intensify production schedules and stockpiling, driving periodic purchasing increases of manganese sulphate and offsetting industry oversupply pressure.

However, even with periodic demand recovery, momentum for a significant rebound remains insufficient. The overall industry overcapacity problem persists long-term, and there are expectations of a pullback in subsequent sulphuric acid raw material prices. Downstream enterprises consistently adhere to on-demand purchasing and rational inventory control, and there is no speculative hype sentiment in the market. Therefore, the price center in H2 will still shift slightly downward, with the overall market maintaining a pattern of in-the-doldrums consolidation.