On June 1, 2025, the joint announcement by the Ministry of Ecology and Environment, the Ministry of Industry and Information Technology, and the General Administration of Customs officially took effect, removing qualified waste lithium-ion battery powder from the Catalogue of Solid Wastes Forbidden from Import and placing it under import management as ordinary goods. This marked a policy breakthrough that China’s lithium battery recycling industry had been anticipating for years — prior to this, the channel for overseas raw materials had never been legally opened, and the industry relied almost entirely on domestic end-of-life power batteries and battery factory off-cuts.
However, more than a year after the channel opened, actual imports have not progressed smoothly. Currently, the varieties seeing stable transactions remain concentrated in electrode black mass, while compliant imports of battery black mass are relatively small. The bottlenecks exist on both the domestic policy threshold side and the overseas supply capability and domestic demand side.
On the overseas side, tightening policies and insufficient pre-processing capacity are creating a dual constraint. The downstreaming roadmap for mineral and coal mining rights released by Indonesia’s Ministry of Investment in 2025 explicitly requires all battery material projects to be equipped with recycling and processing capacity by 2026, with waste batteries and black mass having to prioritise meeting local processing needs, making export only a secondary option. Malaysia’s Ministry of Environment has been steadily tightening approvals and has effectively ceased issuing permits for the direct import of waste battery cells without pre-processing. The EU Batteries Regulation mandates intra-regional treatment of waste batteries, while the Waste Shipment Regulation restricts exports to non-OECD countries, and there is currently no relevant bilateral agreement between China and the EU. The US Resource Conservation and Recovery Act classifies waste batteries and their processing residues as hazardous waste, and large-scale imports of black mass have not been liberalised.
Policies in various countries are exerting pressure from three directions, collectively shaping the current landscape where import varieties are concentrated. Indonesia, as the largest destination for battery material investment outside China, is expected to generate significant battery production waste from local Chinese-invested hydrometallurgy and precursor capacity over the next two to three years. If this waste flows to China, it could become an important supplement to black mass imports. However, under Indonesia’s localisation processing requirements, such waste must prioritise local processing needs, meaning the stability and scale of exports remain uncertain. Malaysia and the US directly squeeze the supply of black mass: Malaysia’s function as a Southeast Asian hub for waste battery collection, distribution and initial processing has shrunk due to tighter approvals, while North American resources can barely reach China in the form of black mass. The EU has locked European end-of-life batteries and black mass into internal circulation, with limited short-term impact, but this will cut off a long-term supplementary channel as the wave of retirements arrives. This also explains why import varieties are concentrated in electrode black mass: electrode black mass comes from off-cuts generated during battery cell production, does not involve the complex crushing and sorting of retired battery cells, has a low pre-processing threshold and shorter supply chain, and is relatively less affected by policy shocks. Beyond policy, China imposes clear requirements on the metal content and impurity specifications of imported black mass. Battery black mass exhibits significant fluctuations in metal content and is difficult to control in terms of impurities, and overseas crushing and sorting capacity generally struggles to consistently meet specifications, with a notably low compliance rate for battery black mass.
On the domestic side, market price trends are suppressing import willingness from the cost side. Since the beginning of this year, cobalt sulphate, a key product of hydrometallurgical recycling, has been grinding lower, with sluggish downstream demand in consumer electronics and others and insufficient rebound momentum. Weak cobalt salt prices have directly depressed psychological price levels for black mass procurement. Meanwhile, the entire cycle for overseas black mass — from crushing and sorting, port consolidation and shipping to customs clearance — invariably takes two to three months. Against the backdrop of grinding lower, this time lag is the biggest risk. An order placed at today’s contract price may arrive with domestic metal prices having fallen below the cost line by the time the goods reach port. Recycling enterprises face a stark reality: rather than taking on the risk of negative margins with long-cycle overseas orders, it is better to purchase domestically at prevailing market prices — although prices are higher, turnover is fast and risks are manageable.
The combination of factors on both ends has created a situation where the policy channel for black mass imports is open but actual flows are obstructed. In the short term, before domestic cobalt prices stabilise and rebound, the scope for expanding overseas black mass imports by variety will be limited, with electrode black mass remaining the main imported variety and battery black mass struggling to achieve volume. Raw material competition and cost pressure for enterprises on China’s whitelist will persist. Meanwhile, the direction of localisation processing policies in regions such as Indonesia and the EU is clear, and waste export channels in various countries are continuing to narrow. When overseas black mass capacity that can meet China’s import standards will be released will be a key variable shaping the domestic raw material supply landscape.
