Lithium Battery Scrap Recycling Volume at 29,800 mt in July Accompanied by Intensifying Supply and Demand Imbalance

SHANGHAI, Aug 10 (SMM) - According to SMM research, in July 2022, a total of 29,750 mt of lithium battery scraps were recycled in China (including scrap in the form of battery, pole piece and black mass), and the recycling volume rose slightly by 2% compared with June. (Due to the rapid changes in the industry dynamics and in order to ensure the accuracy and reliance of SMM data, 3 new samples of recyclers have been added in July.)

In July, the sources of lithium battery scrap were relatively scarce, thus the suppliers had a greater say in pricing. In the month, the prices of nickel and cobalt metal fell, while lithium carbonate prices were firm. And the coefficient of scrap remained high in July.

According to SMM database, in July 2022, the recycling volume of ternary cathode battery scrap, LFP battery scrap and LCO battery scrap stood at 15,323 mt, 12,135 mt and 2,292 mt respectively. The proportion of these three battery scrap types were 52%, 41% and 7% respectively.

The volume of ternary cathode battery scrap recycled fell 10% compared with the previous month as it has always been the star in the recycling market with the highest comprehensive recycling efficiency. The main raw materials for hydrometallurgy enterprises that recycle nickel and cobalt are ternary cathode battery scrap and its pole piece. However, the demand for scrap has increased compared with the first half of 2022, and it has been a common phenomenon that the highest-price-offer gets the cargoes amid intensifying supply and demand imbalance. Then it comes the dilemma. Higher ternary cathode battery scrap prices have heightened the cost of recyclers, and their profits, however, will be increasingly squeezed. In other words, the recyclers bear greater risks. Therefore, the procurement rhythm of recyclers have slowed down in order to avoid risks while to maintain the operating rates, resulting in a decrease in the amount of ternary cathode battery scrap recycled compared with the previous month.

The recycling volume of LFP battery scrap surged 46% compared with June. The lithium carbonate obtained from the recycling of LFP battery scrap has not only attracted the attention of recyclers, but also some lithium salt companies who are also accelerating the positioning in the LFP battery scrap recycling field with successful commissioning.  As such, the demand for LFP battery scrap has been rising, with prices hovering at a high level in the past month.

The recycling volume of LCO battery scrap dropped 38% MoM in July because the prices of cobalt sulphate and cobalt chloride moved all the way down since July, eroding the profit of LCO battery scrap recycling. Recyclers, in order to control the cost, have reduced the amount of LCO battery scrap recycled.

In addition, according to SMM survey, a total of 3,127 mt of nickel, 3,180 mt of cobalt and 1,279 mt of lithium were recovered in July 2022 (all in metal content). The volume of cobalt metal recovered includes the cobalt sulphate and cobalt oxide. The nickel content recovered fell 9% month-on-month, cobalt dropped 22%, and lithium climbed 2%.

According to SMM database, in July 2022, the volume of nickel sulphate recovered stood at 3,127 mt in metal content, cobalt sulphate 3,100 mt in metal content, cobalt oxide 80 mt in metal content, industrial-grade lithium carbonate 2,941 mt, battery-grade lithium carbonate 2,837 mt, and crude lithium carbonate 1,329 mt.

SMM expects the recycling market to be flat in August compared with July. Although the scrap cost is rising, the recyclers will adjust the recycling volume on the premise of maintaining normal operation. And some recyclers will ramp up production in August. Taken together, SMM estimates that the total recycling volume of battery scrap will amount to 29,794 mt in August, flat MoM, including 14,981 mt of ternary cathode battery scrap, 12,411 mt of LFP battery scrap, and 2,402 mt of LCO battery scrap.