Manganese Market Forecast: Top Trends for Manganese in 2025

Oversupply dampens manganese prices

Clare Hanna, senior steel analyst at CRU Group, recounted the most impactful 2024 trends for manganese.

“The key drivers in 2024 were the outage at South32’s (ASX:S32,OTC Pink:SHTLF)Groote Eylandt mine, the surge in alternative supplies and the weak state of Chinese demand,” she said.

“This led prices to first rise very sharply and then plummet as the market oversupply became apparent.”

South32 — the world’s largest manganese producer — saw operations suspended at its Australia-based Groote Eylandt mine in March due to a tropical cyclone. A phased return to mining began in June of last year; however, the severity of flooding due to the cyclone has impacted a wharf and the company’s ability to export.

In a statement, South32 said it expects exports to resume in Q3 2025.

Some of this reduced 2024 output was offset by purchase declines in China. As Hanna explained, Chinese demand was weak due to lower demand for steel rebar, which was driven by weakness in the Chinese real estate sector.

Prices for manganese ore could face headwinds in the year ahead as South32 continues to ramp up Groote Eylandt.

“The return of South32 to the market and the increase in high-grade supply could be a challenge, given the Chinese real estate market is not expected to improve significantly. Steel demand and production in other markets is forecast to improve,” Hanna explained to INN.

Key manganese demand drivers for 2025

Prized for their high energy density, automakers are increasingly turning to manganese-based batteries for their cost-effectiveness and reduced reliance on expensive metals like nickel and cobalt.

That said, as Hanna pointed out, the majority of manganese demand is still attributed to the steel sector.

“There is a lot of noise in the market about manganese usage in EV batteries, driven in part by companies looking for finance, and also because downstream, the processing of manganese ore for battery-grade manganese products is heavily concentrated in China at the moment," she said. “However, it is worth recognizing that in terms of manganese ore demand, the share that is going into EV supply chains is very small.”

The senior analyst went on to note that those dynamics are likely to shift in the coming years.

“While (EV sector) volume is growing and the demand from the steel sector is likely to decline over time, demand from steel supply chains will remain the dominant source of manganese ore demand, and therefore the biggest demand-side influence on manganese ore prices,” said Hanna.

She went on to explain why EV market usage has come to dominate the manganese narrative.

“When looking for investment, companies like to align their projects with growing market sectors, so when companies are talking about new mine investments, they often reference the EV supply chain — even if in practice, most of the ore will likely go to ferroalloy producers for consumption in steel production.”

New manganese sources outside of China

Like so many of the battery metals, the manganese supply chain is dominated by China, a factor many western nations are grappling with. In an effort to bolster supply outside of China, significant investments were made in 2024.

“What we are seeing is a number of projects aimed at producing high-purity manganese sulfate monohydrate (HPMSM) outside of China (in order to) reduce OEM EV battery supply chain risk, or take advantage of the benefits of the Inflation Reduction Act. Some of these are aligned with new or existing upstream mines,” said Hanna.

Although the plan looks good on paper, the CRU steel specialist pointed out the challenges of building HPMSM supply independent of China. She noted that operational plants are a couple of years off at minimum.

“Production of HPMSM is a chemical process, so existing producers of manganese metal or other manganese chemicals would be able to move into this product area more easily than ferroalloy producers, although there are still a lot of technical challenges. There are no ferroalloy producers outside of China moving to produce HPMSM," Hanna added.

Some of the projects in the pipeline include the Manganese Metal Company’s HPMSM Metal to Crystal project in South Africa. Described as a more sustainable process, the Metal to Crystal production method will start with a 5,000 metric ton per annum plant in 2028, followed by a 30,000 metric ton per annum plant, targeted beyond 2030.

In addition to that, Hanna spoke about South32’s Arizona-based Hermosa manganese-zinc project, which received a US$20 million grant from the US Department of Defense in May 2024. The monies have been earmarked for the acceleration of domestic production of battery-grade manganese.

Manganese processing plants have also attracted US government funding.

In September, Element 25 (ASX:E25:OTCQX:ELMT) secured a US$166 million grant from the US Department of Energy under the Battery Materials Processing Grant Program.

The funding will support the construction of the firm’s HPMSM facility in Louisiana. The grant is in addition to US$115 million already secured from offtake partners General Motors (NYSE:GM) and Stellantis (NYSE:STLA).

The feedstock for the Louisiana plant will originate from Element 25’s Butcherbird mine in Australia. In November, the company released a new resource estimate for the planned expansion at Butcherbird.

According to the company, the new estimate registers a 142 percent increase in measured and indicated resources, which now total 130 million metric tons at 10.23 percent manganese.

Additionally, the site hosts a total resource of 274 million metric tons at 10 percent manganese.

Hanna also referenced Euro Manganese (TSXV:EMN,OTCQB:EUMNF), which is developing a project in the Czech Republic using manganese from old mine tailings, as well as looking at plans for a plant in Québec, Canada.

“Firebird Metals (ASX:FRB,OTC Pink:FRBMF) (in) Australia, has adopted an alternative approach,” she said. “They are partnering with a Chinese group to build an HPMSM plant in China, which could eventually be supplied with ore from an Australian mine.”