Price action: stability after a volatile H1. Electrolytic manganese metal on the Shanghai Metals Market is trading at ~$2,315/t (major areas average) as of late July 2026, relatively flat month-on-month. The trajectory in H1 was anything but flat — a sharp surge in Q1, followed by a mid-spring correction, then a rebound and stabilization as Chinese producers implemented coordinated production cuts.
The H1 pattern tells the story of a market that overshot on the upside in early 2026, corrected as stainless steel mills substituted toward cheaper manganese alloys, and then found support from supply discipline. SMM's H1 review notes that the market stayed in surplus throughout the first half, with limited sustained demand growth. The coordinated cuts — primarily in Ningxia, which accounts for 53% of Chinese EMM output — were sufficient to stabilize prices but not to drive them higher.
Battery-grade manganese sulphate, the smaller but faster-growing segment of the market, trades at $1,005/t. The refining margin between EMM and battery-grade sulphate is driven by the cost of the additional hydrometallurgical processing required to upgrade EMM feed into high-purity sulphate monohydrate (HPMSM).
Supply: China dominates, coordinated cuts provide floor
China produces the vast majority of global EMM, with 2026 output estimated at ~1.35 million tonnes — up ~19% year-on-year. Regional concentration is extreme: Ningxia province alone produces ~719,300 tonnes (53%), followed by Guangxi at ~298,700 tonnes (22%), Guizhou at ~130,100 tonnes (9.6%), and Xinjiang at ~75,400 tonnes (5.6%).
The production cuts that stabilized the market in late Q2 were coordinated among major producers in Ningxia and Guangxi, reflecting a collective recognition that the H1 surplus was unsustainable at prices below $2,000/t. These cuts are tactical, not structural — they can be reversed quickly if demand recovers. But they establish a price floor that gives buyers confidence.
On the upstream side, South Africa is the key ore supplier into China, particularly for material destined for high-purity sulphate production. South African ore grades are generally higher than Chinese domestic ore, making them preferred for the battery supply chain. Gabon and Australia provide additional ore volumes at varying grades.
Demand bifurcation: steel soft, battery structural
Roughly 90% of total manganese demand remains metallurgical (ore, alloys, and EMM) for steelmaking. This segment is under pressure in 2026. Chinese steel output is subdued, construction activity remains weak, and high-carbon ferromanganese and silicomanganese prices are both trending downward ($704/t and $789/t respectively on SMM). India's MOIL Limited cut delivery prices by 5-6% across all grades in June 2026 — a direct signal of weak offtake from the steel sector.
The EMM-specific demand dynamic is even more nuanced. SMM reports that stainless steel mills, facing expensive electrolytic manganese, raised the proportion of manganese alloys as a cheaper substitute. This substitution effect depressed direct EMM demand even as total manganese usage in steel remained stable. For EMM producers, the steel channel is price-capped by alloy competition.
Battery cathode demand is the real growth story, albeit from a smaller base. The high-purity EMM segment is projected to grow from $1.27 billion in 2026 to $2.95 billion by 2035, a CAGR of 9.8%, driven by NMC, LMO, and emerging LMFP (lithium manganese iron phosphate) cathode chemistries. LMFP is particularly significant — it offers LFP-like cost structures with higher energy density, and it relies on manganese as a critical component. CATL and BYD are both reported to be commercializing LMFP chemistries, which could significantly increase manganese intensity per battery if scaled.
Forward outlook: mild uptrend, capped by steel
SMM expects EMM prices in H2 2026 to fluctuate with mild upward momentum, with the full-year average settling above H1. The plausible trading corridor for metallurgical EMM is $2,000-2,800/t for 2026. Battery-grade sulphate is expected to range between $900-1,300/t.
The H2 outlook has two phases. Phase 1 (July-September): seasonal destocking in steel, limited catalyst for EMM, prices likely range-bound. Phase 2 (October-December): potential pre-winter restocking in steel and battery supply chains, moderate upside. The bull case requires two things to align: a steel demand recovery in China (stimulus-driven or seasonal) and acceleration in LMFP cathode deployment.
EMM buyers in H2 2026 benefit from a market that is well-supplied but price-supported by Chinese production discipline. For steel-sector buyers, the EMM-alloy substitution spread is favorable — consider increasing alloy use where metallurgical specs allow. For battery-sector buyers (HPMSM/cathode), current EMM prices offer a reasonable entry point for term contracts, especially given the structural growth outlook for LMFP chemistries. The geographical concentration risk in Chinese refining and South African ore supply argues for diversification in medium-term sourcing strategies. Negotiate with an eye on the $2,000/t floor — any dip below that level triggers additional production cuts.