Ternary lithium batteries are developing towards high-nickel ones and lithium iron phosphate (LFP) batteries towards lithium manganese iron phosphate (LMFP) batteries, and sodium-ion batteries will be massively produced in 2023. How will these new trends in batteries impact the material end? This report will discuss the impact of these new development directions of batteries on the prices of high-purity manganese sulfate.
At present, high-purity manganese sulfate is mainly used in lithium-ion batteries. Except for lithium manganese batteries, the manganese sources of other lithium-ion batteries are all from high-purity manganese sulfate, or directly use high-purity manganese sulfate. High-purity manganese sulfate is a necessary manganese source for NCM ternary precursor, LMFP, layered sodium manganese oxide material of sodium-ion battery, sodium manganese hexacyanoferrate, as well as nickel-manganese binary composite cathode material for solid-state battery.
What about the demand for high-purity manganese sulfate in 2023?
First, the development of high-nickel ternary materials will lead to an increase in the demand for nickel and a decrease in the demand for manganese sulfate of general quality. The impurities in the ternary precursor will be carried into cathode materials during production, thus affecting cathode's impurity content. Therefore, the high-nickel ternary materials require high standards for precursors, which drives up the demand for high-purity nickel sulfate while reducing the demand for low-quality nickel sulfate.
In terms of unit consumption, the amount of high-purity manganese sulfate consumed in nickel-rich NCM8 or NCM9 precursors is less than that of NCM5 or NCM 6 series. According to Mysteel's survey, the unit consumption of manganese sulfate for NCM8 series ternary cathode materials is about 220 tonnes/GWh, while that for NCM5 series ternary cathode reaches about 550 tonnes/GWh. Besides, the unit consumption of manganese sulfate for low and medium nickel ternary cathode materials is about 2.5 times that for high-nickel ternary cathode materials.
As shown in Figure 1-1, the proportion of high-nickel ternary precursors has gradually increased from 2019 to 2022. In 2022, the proportion of NCM8 and NCM9 series ternary precursors is close to 50%, roughly equivalent to the combined share of NCM5 and NCM6 series. The proportion of high-nickel ternary precursors will increase further in 2023, which will pull up the demand for high-quality manganese sulfate, albeit may have limited impact on improving the overall demand for manganese sulfate. It is estimated that the demand of ternary materials for manganese sulfate will total 230,000 tonnes in 2023.
Figure 1-1: Proportion of output of each ternary precursor series in China
Second, mass production of sodium-ion batteries will begin this year. According to the disclosed data, the production capacity of sodium-ion batteries will be 19.5GWh in 2023. However, considering that sodium-ion battery production lines have just been built and still need some tests, they may not reach full capacity at present. The production capacity of sodium-ion batteries is predicted to be around 5GWh in 2023. However, given the fact that sodium-ion battery cathode materials can be produced either via the liquid phase method (using high-purity manganese sulfate) or via the solid phase method (using electrolytic manganese dioxide) and the latter method accounts for a larger share, sodium-ion batteries' pulling for manganese sulfate demand will be limited. It is estimated that the demand for high-purity manganese sulfate from sodium-ion batteries will be about 4,000 tonnes in 2023.
As for LMFP, its output via the liquid phase method is about 130,000 tonnes, 110,000 tonnes of which are produced by Shenzhen Dynanonic. It is estimated that the demand for high-purity manganese sulfate from LMFP will be around 70,000 tonnes in 2023.
Solid-state batteries are expected to be massively produced in 2030, thus having no impact on high-purity manganese sulfate demand in the short term.
Therefore, the overall demand for high-purity manganese sulfate in China is expected to reach 310,000 tonnes in 2023.
On the supply side, the planned production capacity of high-purity manganese sulfate was 589,800 tonnes/year in 2022, while the actual capacity was 485,000 t/y, with a total output of 273,800 tonnes. Of these, Guangxi Isky, a manganese sulfate producer, set a planned production capacity of 150,000 t/y last year. As the company's production lines had only operated at 50,000 t/y in the first phase, its production capacity started to climb from October and reached 120,000 t/y in December 2022. As shown in Table 1-1, 2023 will also see more capacity expansion, among which Ningxia Tianyuan alone is able to contribute a capacity of 300,000 t/y. It is expected that the capacity of high-purity manganese sulfate will reach 750,000 t/y in 2023, and the actual output will be around 375,000 tonnes based on a 50% capacity utilization rate.
Table 1-1: Current production capacity and planned capacity expansion of high-purity manganese sulfate
Manufacturer |
Current capacity (10,000 tonnes/year) |
Planned capacity expansion |
Ningxia Tianyuan |
0 |
The 1 million t/y high-purity manganese sulfate project will be carried out in three phases, with 300,000 t/y in Phase I, 300,000 t/y in Phase II and 400,000 t/y in Phase III. |
Dalong Huicheng |
13 |
The production capacity will be expanded to 200,000 t/y in 2023. |
Gem |
2.98 |
A 30,000 t/y capacity of manganese sulfate crystals went into production in 2022, and a 20,000 t/y high-purity manganese sulfate crystal project will be built by 2025. |
Nanhai Chemical |
5 |
In 2023, the production line of high-purity manganese sulfate with an annual output of 100,000 tonnes will be constructed. |
Isky |
15 |
|
Redstar |
3 |
A planned 50,000 t/y production capacity of high-purity manganese sulfate in 2023. |
Xinglong New Energy |
5 |
|
Guizhou Maganese Mineral Group |
3 |
A 30,000 t/y high-purity manganese sulfate project will be built in 2023. |
Guizhou Jinrui |
4 |
|
Fujian Xinglong |
3 |
|
Guangxi Yuding |
5 |
A planned capacity of 100,000 t/y of high-purity manganese sulfate in 2023 |
Guangdong Grand Sky Advanced Materials |
0 |
In 2023, some electrolytic manganese production lines will be transformed, and new production lines with an annual output of 200,000 tonnes of battery-grade high-purity manganese sulfate and manganese tetroxide will be built. The capacity of battery-grade high-purity manganese sulfate is 100,000 t/y. |
Source: Mysteel
In terms of price, it can be seen from Figure 1-2 that the prices of manganese sulfate were mostly stable at around Yuan 6,000/t throughout 2019 and 2020. Due to the significant growth of the overall demand and structural reform of some production capacity in 2021, manganese sulfate prices increased rapidly amid the persistent supply-demand imbalance until May 2022, when the growth of new energy demand became weaker than expected, and the overall price kept falling from then and receded to Yuan 6,600/t as of January 2023.
Figure 1-2: Domestic market price of high-purity manganese sulfate (Unit: yuan/tonne)
The prices of manganese sulfate are anticipated to rise in the first half of 2023 and fall back to the previous level in the second half of the year, as the second half will see vast increases in supply while the demand for high-purity manganese sulfate in the whole year is unlikely to improve largely. However, the prices of general-quality manganese sulfate and high-purity manganese sulfate may diverge due to the rigid demand for the latter in producing high-nickel ternary materials. And even if the production capacities are established intensively, the prices of high-purity manganese sulfate will also stay relatively firm this year. In addition, the price spread between general-quality manganese sulfate and high-purity manganese sulfate will keep widening with more supplies and quality discrepancy.
By 2025, the demand for high-purity manganese sulfate will improve greatly with the mass production of sodium-ion batteries. However, market supply will also rise rapidly as the expansion and transformation of manganese sulfate production lines only cost a short time and have little technical difficulties. Therefore, it is expected that the supply of high-purity manganese sulfate may continue to exceed the demand by 2025, and the prices of high-purity manganese sulfate will fluctuate with the changes in supply and demand.
Written by Mysteel Nonferrous Metal & New Energy Research Center
Edited by Ruby Zhang, zhangjiajing@mysteel.com; Alyssa Ren, rentingting@mysteel.com