[SMM Analysis] Lithium battery recycling procurement declined in April, mainly due to wet-process plants' inventory preparation and the continuous decline in salt prices

SMM News on May 8:

From an overall data analysis perspective, market procurement in April 2025 declined compared to March 2025. As of April 2025, the total monthly recycling volume (based on black mass) in the SMM recycling market reached 24,572 mt, down approximately 5.0% MoM and basically flat YoY.

On one hand, in terms of demand, the production of battery cells for the NEV market and ESS sector in the downstream continued to increase steadily. However, the corresponding downstream hydrometallurgy plants, due to inventory build-up and active procurement in March, saw a large volume of scrap purchased in March and arriving in April gradually entering their warehouses, leading to inventory surplus. This caused hydrometallurgy recycling enterprises to lean more towards destocking, adopting a cautious attitude towards scrap procurement. On the other hand, the overall price of lithium carbonate continued to decline in April, while the prices of nickel sulphate and cobalt salt remained stable. However, the sentiment to stand firm on quotes among supply-side entities such as grinding mills and battery cell manufacturers remained evident, with prices not following the decline in lithium chemical prices in a timely manner. This further exacerbated the cost-losses imbalance for hydrometallurgy plants, especially LFP hydrometallurgy plants. Some LFP hydrometallurgy plants opted for production cuts and maintenance due to sustained losses, resulting in declines in both procurement volume and production.

From a material perspective, the price of cobalt sulphate rose rapidly earlier due to export policy restrictions in the DRC, but the upward trend largely ended by early April, with the overall price remaining basically flat. Regarding lithium carbonate, its price continued to decline from early April to early May. In terms of market transactions, as time progressed to mid-to-late April, market transactions were significantly weaker compared to the previous month. Entities generally purchased as needed, and there was no active stockpiling behavior observed ahead of the Labour Day holiday as in previous years. Given the current supply-demand surplus, more grinding mills and hydrometallurgy plants are focusing on changes in national policies such as the US tariff hike, trade-in policies, and the draft for comments on the import and export of black mass. It is anticipated that prices and recycling volumes in May will fluctuate in response to policy changes and downstream demand.

SMM New Energy Research Team

Wang Cong 021-51666838

Ma Rui 021-51595780

Feng Disheng 021-51666714

Xu Ying 021-51666707

Lv Yanlin 021-20707875

Liu Yujun 021-20707895

Yu Xiaodan 021-20707870

Zhou Zhicheng 021-51666711

Zhang He 021-20707850