At the recently held SMM GBRC lithium battery recycling industry conference, participating enterprises across the industry chain engaged in thorough exchanges, summarizing the common issues confronting the sector's current development. Feedback from the conference indicates that China's lithium battery recycling industry remains in a phase of development and refinement, with overall standardization yet to be enhanced. The industry widely faces low capacity utilization rates, a lack of raw material standards, and imbalanced cost structures, all of which, to a certain extent, hinder high-quality development. SMM data shows that in May 2026, the average operating rate for black mass production in China's lithium battery recycling sector was below 35%, while the average operating rate for hydrometallurgy recycling stood at under 40%, reflecting widespread idle capacity. In some segments, structural issues emerged, such as raw material costs exceeding the selling prices of finished products. Most recycling enterprises are under pressure, generally hovering around the break-even level.
The incomplete raw material standard system is one of the main bottlenecks constraining current industry development. At this stage, a unified industry standard for black mass has yet to be established in China. Raw materials circulating on the market exhibit varying quality and poor stability, making it difficult to ensure consistent product quality for recycled lithium battery products, which struggle to match the quality levels of virgin products. Meanwhile, intense competition in raw material procurement has, to some extent, driven up procurement costs. Insufficient standardization of raw material quality also hampers the industry's ability to build a unified cost accounting and product traceability system, hindering standardized and systematic development.
Beyond raw material issues, the industry also faces structural problems such as poor cost pass-through, an immature premium pricing system for recycled products, and imbalanced supply-demand matching across the industry chain. Lithium battery recycling enterprises must bear multiple compliance costs—including hazardous chemical transportation, compliant production, and environmental protection-related controls—but cost pass-through channels remain underdeveloped, making it difficult for compliance costs to be effectively transmitted to end-users. Market side, differentiated pricing mechanisms for recycled and virgin materials have yet to fully take shape, and an industry consensus on the value premium of recycled products has not been popularized. Only a few top-tier players are willing to pay a premium for compliant recycled materials, and the green, low-carbon value of recycled materials has not been sufficiently marketized. At the same time, some downstream enterprises primarily purchase recycled products and have limited openness in sharing their own production scrap, restricting recycling companies' stable access to raw materials. The supply-demand coordination efficiency of the industry chain still needs improvement. At this conference, representatives from the industry chain and experts in the field engaged in in-depth discussions based on the current industry situation. They proposed that for the lithium battery recycling industry to improve quality and efficiency and open up a market premium channel for recycled materials, it is necessary to focus on strengthening four foundational areas, thereby laying a solid foundation for the industry’s long-term high-quality development. First, steadily improve the quality of recycled products to match that of virgin products. By leveraging mature technological iterations, stabilizing raw material supply, and standardizing production processes, drive the overall quality of recycled lithium battery products to benchmark against virgin products. Second, accelerate the improvement of the industry’s standardization system and spare no effort to promote the implementation of a unified industry standard for China’s black mass. Refine and define quality parameters for different grades of raw materials, ensuring consistent and uniform quality of recycled products from the source. Third, explore and realize the core value of recycled products. Through multiple means such as carbon trading and compliance certification, transform the implicit advantages of recycled materials—low-carbon environmental protection and full traceability—into tangible and quantifiable market gains. Fourth, establish a unified cost accounting system for the industry. Sort out and standardize reasonable cost ranges for each segment of the industry chain, establish standardized accounting bases, and provide solid support for fair industry pricing and the implementation of a market-based premium mechanism.
The lithium battery recycling industry is currently at a critical window of transformation and upgrading. Issues such as the absence of standards, cost imbalances, and an imperfect premium system remain the core factors constraining the industry’s scaling-up and high-quality development. Going forward, by continuously building and refining the four foundational systems, combined with collaborative optimization across the industry chain and the ongoing release of green value, the industry is expected to gradually address current pain points, break away from extensive development models, and propel the transformation from scale expansion to synergistic upgrades in both quality and value, thereby continuously contributing to the green, low-carbon, high-quality development of the new energy industry.
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