How to Invest in Manganese in (Updated 2023)?

Curious about manganese investing? Here’s a brief overview of the manganese industry, from supply and demand to how to invest in manganese.

Manganese is an important industrial metal. More than 90 percent of global consumption is closely tied to the steel and construction sectors, and China is a major consumer of the commodity.

Despite its solid demand base, the manganese price has been a victim of volatility in the past few years. COVID-19 lockdowns, extreme weather events and Russia's war in Ukraine have slowed manganese production, leading to price surges. However, China's slower economic recovery has tamped down demand, at times placing pressure on manganese prices in 2022.

Moving forward, analysts are expecting China to see a strong infrastructure-focused economic rebound, alongside increasing demand from government-funded infrastructure projects in India and the US, presenting a more positive outlook for manganese.

Read on for a closer look at manganese supply and demand dynamics, as well as an overview of why the metal could be a compelling investment choice in the coming years.

What factors impact manganese supply and demand?

As mentioned, the steel sector accounts for most manganese demand, using it as a deoxidizing and desulfurizing additive and as an alloy constituent. Among other things, manganese can improve the strength, toughness and stiffness of steel. In turn, the steel sector is a key driver of the manganese price.

According to a report from Transparency Market Research, the global manganese alloy market is projected to reach US$40.9 billion by 2031; its growth will be driven largely by rising demand from the automotive industry and growing usage of manganese alloys in green infrastructure projects.

The electric vehicle (EV) battery industry is the second largest consumer of manganese today, and many market watchers believe that demand from this sector could be set to increase in the future.

Manganese dioxide has long been used as a depolarizer in alkaline batteries, but this is not the manganese battery market that is now the most interesting. Attention is being drawn to lithium-ion battery chemistries that require manganese — such as lithium-manganese oxide batteries and nickel-manganese-cobalt oxide batteries.

In these batteries, electrolytic manganese dioxide is used as a cathode material. Many investors who believe that battery sector demand for manganese will increase are optimistic that lithium-ion batteries that require manganese will become more common in the future.

“What we're seeing for manganese is that a slight change in the cathode chemistry will really move the needle a lot for demand,” Anna Fleming of Benchmark Mineral Intelligence said during a keynote presentation at last year’s Benchmark Week event. Benchmark Mineral Intelligence is forecasting that demand from batteries will increase five-fold in the next decade.

While the steel and EV battery industries are the top consumers of manganese, other uses of manganese exist as well, with the metal turning up in chemicals and more.

Looking at supply, major producers have manganese-mining operations in Australia, Gabon, Ghana and China, as well as South Africa, which holds 37 percent of the world’s reserves. Global manganese production reached 20 million metric tons in 2022, a slight decrease of 100,000 metric tons from 2021, as per the US Geological Survey.