Spotlight on sulfate: Battery chemistry developments and geographical onshoring to shape manganese sulfate sector
Developments in prevalent battery chemistries and geopolitical moves to onshore key battery raw materials (BRM) supply will likely require significant changes to the manganese sulfate supply chain, Fastmarkets understands
Further developments in prevailing battery chemistries and increasing use in non-NMC chemistries – as well as geopolitical shifts as western countries attempt to wean themselves off Chinese raw materials – will likely lead to a shift in supply-demand dynamics for the metal.
Due to these factors, Fastmarkets has forecast a deficit for the metal by 2030, with a supply forecast at 300,300 tonnes – manganese contained – versus demand at 374,814 tonnes. This covers demand for both electric vehicle (EV) use and energy storage systems.
In this final part of Fastmarkets’ three in-depth features on manganese sulfate, we delve into the sector’s looming developments.
Changes in attitudes toward battery chemistries have resulted in uncertainty for many of the BRM markets, with mixed forecasts of both growth and declines in demand.
Battery grade manganese sulfate is used for a number of seemingly promising developments in BRM chemistries outside its prevailing use in NMC batteries.
One such potential future development could be the commercial establishment of high lithium, manganese (HLM) cathode active materials (CAM) and the use of manganese in lithium manganese iron phosphate (LMFP) batteries.
Critical materials technology company Umicore is on the cutting edge of the process to commercialize HLM. The producer started developing manganese-rich technologies more than ten years ago.
A spokesperson told Fastmarkets that the company sees HLM as “an excellent alternative” to other existing design-to-cost technologies such as LFP, because the battery technology is “cost-competitive, has a higher energy density and offers better recycling capabilities.”
The company’s investment in HLM complements Umicore’s portfolio of NMC battery materials because market participants are prompted by BRM prices and supply chain concerns to explore other chemistries.
Compared with other metals in the NCM suite of chemistries, manganese sulfate stands out as a more affordable ingredient.
On the London Metal Exchange, the nickel cash official price was most recently at $21,392.50 per tonne on Thursday July 27.
Fastmarkets’ price assessment for cobalt standard grade, in-whs Rotterdam was $16.50-18.00 per lb ($36,376-39,683 per tonne) on Friday, unchanged from the previous session but down from its 2022 high of $39.75-40.50 per lb on May 3.
Fastmarkets’ price assessment for manganese sulfate 32% Mn min, battery grade, exw mainland China was 5,000-5,650 yuan ($699-789) per tonne on July 27.
In recent years, developments in existing battery chemistry have moved toward relatively reduced consumption of battery grade manganese sulfate, Fastmarkets heard.
“The dominating cathode formulation outside China is currently NCM material, with a trend of increasing the nickel content – to boost battery performance – and reducing the cobalt and manganese content,” Madelein Todd, chief marketing officer for Manganese Metal Company (MMC), said to Fastmarkets.
MMC describes itself as the only producer of high-grade manganese metal outside of China. It operates in South Africa, where it produces 28,000 tonnes per year of manganese metal, which is high in purity and selenium-free. Its manganese metal is 99.9% Mn (Fastmarkets prices 99.7% material). A significant portion of its manganese metal is sold to NCM producers.
Todd expects cost pressure to potentially increase demand for alternative chemistries, such as high-manganese cathodes, including through lithium iron phosphate (LFP) chemistries outside China, where it is currently prevailing.
“Given pressure from cost, LFP will inevitably also feature out of China over the next few years,” Todd said.
With the addition of manganese, lithium iron manganese phosphate can be produced with a higher energy density, helping mitigate the chemistry’s relatively low energy density – one of its key shortfalls compared to NMC batteries.
“Reducing battery cost pressures will be most accelerated when high-manganese cathode materials reach commercialization – at present they have just left the laboratory stage of development, but hold very good promise,“ Todd said.
Umicore told Fastmarkets that the growth of LFP (and LMFP) outside of China will likely be possible in the medium term, and that in the meantime HLM could provide an appealing alternative.
“LFP requires a different manufacturing production process and supply chain… building capacity outside of China would come with serious cost considerations and take some time, likely beyond 2026-2027,” the company’s spokesperson said.
Progress is being made, according to Fastmarkets research.
“We are seeing significant attention and investment in LMFP technologies with a view to improve the chemistry that holds the greatest market share in the Chinese market,” Fastmarkets analyst Rob Searle said.
“This could lead to higher adoption of the nickel- and cobalt-free chemistry in western markets where longer-range, higher-performance vehicles remain the preference,” he added.
Speaking to Fastmarkets earlier this year, James Fraser, vice president commercial, Euro Manganese, also identified that increased LMFP demand would impact the manganese sulfate market.
“I believe over the next couple of years, we will see more and more announcements of manganese rich chemistries from battery makers for NMC batteries [and] also we expect to see LMFP playing a bigger part,” Fraser said. “It will take a little while for this to translate into concrete demand, but it will come.”
Commercial production of manganese sulfate is currently overwhelmingly concentrated in China, posing a potential restraint for the material’s use, despite its relative abundance.
The trend to establish a non-Chinese supply of the material will likely be boosted by recent legislation, including the European Union’s battery directive – which was adopted in June. The directive targets carbon footprint reporting, with EV batteries, light means of transport batteries and rechargeable industrial batteries (with a capacity of over 2kWh) required to carry a label that reflects their carbon footprint.
“We will be able to offer high purity sulfate material, with traceability and the highest compliance standards, in 2.5 to 3 years – by then cathode precursor production will have evolved more in EU and North America, which are the target markets for our non-Chinese offering of manganese sulfate,” said Todd.
Chinese manganese producers, Fastmarkets has found, are not as established as non-Chinese producers when it comes to disclosing carbon emissions, providing the latter with opportunities to establish comparably strong reporting standards.
Additionally, manganese sulfate may benefit from better recycling and a more circular supply chain, as advocated for by legislation in the West.
Umicore believes that its HLM CAM is more appealing for recycling than LFPs.
“In LFP, recycling iron and phosphate is not economically valuable,” the company’s spokesperson said.
Fastmarkets believes that increasing global demand for the BRM – and the current concentration of the material’s production in China – will support non-Chinese production in the future.
“From 2025, we expect tightening supply and scouring regulations to lead to projects starting up in Europe, the US and Australia,” Searle said.
This article is part three of three in our spotlight on sulfate series, focused on manganese sulfate. Read the other articles here.