Electrolytic manganese prices have been on a continuous upward trend in December, surging over CNY 2,300 per ton to reach a multi-year high. As of December 18, the average price stood at CNY 17,820 per ton, marking a daily increase of CNY 200. Excluding weekends, prices have risen for 13 consecutive trading days this month, accumulating a nearly 15% gain—the highest level since May 2022.

The rally is driven by multiple factors, including supply constraints, cost pressures, and improving demand. Since October, major production hubs like Guangxi and Guizhou have entered pollution control periods for autumn and winter, forcing small and medium-sized producers with subpar environmental compliance to cut output or halt operations temporarily. Additionally, seasonal dry conditions in southern regions have pushed up hydropower costs, further squeezing margins for smelters and prompting voluntary production cuts.

Meanwhile, industry leader Ningxia Tianyuan Manganese Industry's 600,000-ton electrolytic manganese (Phase I) upgrade project remains under construction, with completion expected in the second half of 2026. The simultaneous shutdown of outdated capacity during retrofitting has intensified market concerns about supply shortages.

On the demand side, steelmakers maintain stable production schedules, with year-end restocking gradually kicking in. Specific sectors like 200-series stainless steel demonstrate resilient demand for electrolytic manganese. Data shows China's 39 cold-rolled stainless steel plants plan December output of 1.4459 million tons, up slightly month-on-month.

The new energy sector is emerging as a key growth driver, transforming manganese from an "industrial seasoning" in steelmaking to "battery blood" for green technologies. Commercial adoption of next-gen battery materials like lithium manganese iron phosphate (LMFP) is fueling explosive demand for high-purity electrolytic manganese.

Relevant HK-listed manganese plays: SOUTH MANGANESE (01091): The company reported H1 2025 attributable profit of no less than HKD 150 million, reversing a HKD 162.8 million loss in H1 2024. Formerly known as CITIC Dameng, it was spun off from CITIC RESOURCES (01205) in 2010 and rebranded in February 2021.