Lithium Recycling: economy highlights the acceleration of industrialization [Agency Review]

Benefiting from the high growth of market demand of power and energy storage, the market space of lithium battery recycling industry continues to expand, and the current high price of resource goods makes the economic benefits of battery recycling industry obvious, we think that the industrialization of lithium battery recycling industry is expected to accelerate.

Abstract

Lithium battery recycling makes up for the last link of recycling in the lithium battery industry. According to USGS and other statistics, China's lithium, nickel and cobalt reserves account for about 7%, 4% and 1% of the world, respectively. The reserves are limited, and the supply capacity of domestic new energy metal resources is weak, so they are more dependent on imports. Through the recovery of lithium battery, the recycling of lithium, nickel and cobalt resources can be realized, which is expected to solve the problem of excessive dependence on domestic resources for a long time. In addition, waste batteries are high-quality urban mine resources, and the recovery and smelting of nickel, cobalt and lithium has considerable economic benefits. Finally, lithium battery contains heavy metals, volatile organic compounds, toxic compounds and so on, and its recovery and treatment meets the requirements of environmental protection.

Core competitive factors of lithium recovery: lithium yield, processing cost, channel. At present, the process of recovering nickel and cobalt from ternary batteries has been relatively mature, with a recovery rate of more than 98%, while the lithium yield of ternary / lithium iron phosphate ranges from 80% to 95%, which can better reflect the technical differences of recovery enterprises. In addition, we estimate that in the composition of the recovery and processing cost of ternary / iron lithium battery, the proportion of acid-base accessories, energy consumption, depreciation, labor and other costs reached 45%, 49%, 29%, 25%, 6%, 7%, 12%, 7%, 7%, 7%, 7%, 7%, 7%, 7%, 7%, 7%, 7%, 7%, 7% and 7%, respectively. the difference in processing costs is mainly reflected in the consumption of acid-base accessories and energy consumption control. Since 2019, the recovery value of ternary battery is about 2.3-7.8 times that of iron lithium battery, and the economic benefit of ternary recovery is much higher than that of iron lithium, but with the continuous high operation of lithium price, the current economic benefit of lithium iron phosphate recovery is also prominent. and we believe that with the maturity of the recovery process and the reduction of processing costs, the ability of ternary and iron-lithium recovery to withstand metal price fluctuations has been greatly improved.

Market space: battery recycling is expected to open a 100 billion-level market in 2022. According to the comprehensive prediction of the three major scenarios of decommissioned batteries, lithium battery production waste and cathode production waste, we expect that by 2025, the amount of positive batteries recovered from lithium batteries will reach 414000 tons, lithium iron, lithium cobalt, and others are expected to reach 414000 tons, 163000 tons, 62000 tons, and 20000 tons, respectively, and the CAGR is 38%, 39%, 7% and 8%, respectively. As the current prices of nickel, cobalt and lithium are all at a historically high quartile, we estimate that the market space for the recovery and recycling of lithium batteries into positive electrodes in 2022 is expected to exceed 100 billion yuan (including tax price calculation). After that, considering the decline of metal prices, the recycling market shows an increase in volume and a decrease in price, and is expected to maintain a market scale of 100 billion yuan in 22-25 years.

Risk

The sales of new energy vehicles are not up to expectations, the installed capacity of energy storage is not up to expectations, and the prices of resource goods fluctuate greatly.