SHANGHAI, Jul 26 (SMM) - Last week, the World EV & ES Battery Conference was held with fruitful results. The speech of Zeng Yuqun, chairman of CATL, on the recycling of power batteries aroused heated discussions in the market. Zeng suggested that most of the materials in the battery can be recycled. Taking Brunp Recycling as an example, the recovery rate of nickel, cobalt and manganese has reached 99.3%, and the recovery rate of lithium has also reached more than 90%.

In this regard, meeting participant of Tianqi Lithium, one of the well-known domestic lithium mining giants, questioned the representation that "the lithium recycling rate has reached more than 90%", and commented that, "It can be achieved in the laboratory, but I have not seen such practice in the commercial domain." CATL responded aggressively afterwards, "Welcome to Brunp Recycling to see advanced mass production technology.” Public information shows that Guangdong Brunp Recycling Technology Co., Ltd. was founded in 2005. CATL is the largest shareholder, with a stake of 52.87%. Brunp is mainly engaged in the research and development of resource recycling technology, energy recovery system, and new material technology.

In fact, as early as January this year, the Ministry of Industry and Information Technology mentioned at a press conference that it is expected that by 2030, the total scale of China's power battery recycling industry will reach more than 100 billion yuan.

At the 2022 China International New Energy Conference held by SMM from July 13 to July 15, many industry veterans also discussed the status quo and challenges facing power battery recycling. Wu Zhangjie, founder and general manager of Sichuan Changhong Green Environmental Protection Technology Co., Ltd. predicts that battery recycling will reach 83 GWh in 2022, 195 GWh in 2025, with a five-year compound annual growth rate (CAGR) of 33.3%; 522GWh by 2030, with a five-year CAGR of 21.8%; and 1,318 GWh by 2035, with a five-year CAGR of 20.4%. In the fifteen-year business cycle, the CAGR will reach 25.0% from 2020 to 2035.

Ming Yuebin, technical director of Battery Science & Technology, said that according to incomplete statistics, as of the end of December 2021, more than 70 repurposing and recycling enterprises around the world have recovered nearly 13 mt of power batteries. And the lithium, cobalt, nickel and manganese recycled from these retired batteries accounted for 4%-7% of the resources required for power battery production in that year.

In recent years, under the explosive growth of new energy vehicles, the demand for nickel, cobalt, lithium and other metals has skyrocketed. The prices of lithium and nickel metals are rising even more rapidly entering 2022. According to SMM prices, the average spot price of lithium metal once rose from 1.395 million yuan/mt to the highest point of 3.16 million yuan/mt, an increase of 126.58%.

Against the background of rapidly rising raw material prices, power battery recycling has undoubtedly become an "urban mine" with impressive development prospects. Generally speaking, the average service life of new energy vehicle power batteries is 5-8 years. According to CCID Consulting, intensive retirement of power batteries began since 2018. In 2020, 25.6 GWh of power batteries retired, and the number will reach 174.2 GWh (about 2 million mt) by 2025, which is 6.8 times that in 2020, and the compound anuual growth rate will reach 58.2%.

The International Energy Agency once predicted that the scale of the power battery recycling industry will reach 164.8 billion yuan in the next 10 years. Wang Zhenpo, deputy director and secretary general of the New Energy Battery Recycling Professional Committee of China Industrial Energy Conservation and Cleaner Production Association, also predicts that in the next five years, the average annual retired power batteries will be about 20-30 GWh or 160,000 mt, amounting to 142.2GWh or 926,000 mt during this period until 2026. From 2022 to 2026, the cumulative retired capacity of TOP10 enterprises will reach 90 GWh, and the CATL alone will produce more than 44 GWh retired capacity.

SMM believes that the overall recovery of domestic lithium battery scrap has increased significantly entering 2022. The recycling volume of lithium battery scrap was as high as 32,105 mt. Although there has been a decline since then, the overall performance is still eye-catching. According to SMM statistics, the recycling volume of lithium battery scrap in June reached 29,032 mt, a significant increase of 62% from May. The main reason is that battery recyclers have stepped up their restocking following the depletion of previous in-plant stocks and as prices of nickel and cobalt dropped.

In addition, according to SMM survey, a total of 3,001 mt of nickel, 4,093 mt of cobalt and 1,077 mt of lithium were recovered in June 2022 (all in metal content). The recovered nickel content rose 86% month-on-month, cobalt added 108%, and lithium climbed 39.9%.

Considering that cobalt sulphate accounts for the largest proportion of the recovered cobalt products, we will take it as an example. According to SMM prices, the average spot price of domestic cobalt sulphate has been rising since the third quarter of 2021, and it has risen to a year-to-date high of 120,000 yuan/mt, a record high in the past three years. However, the spot price of cobalt sulphate has been declining recently. As of July 25, the spot price of domestic cobalt sulphate has dropped to 59,000-61,000 yuan/mt, which is directly "halved" from the previous high.

As for the battery recycling market, SMM expects that the recycling volume in July will decline compared with that in June. Due to the large recycling volume in June and the abundant stocks carried by recyclers, the recyclers are expected to slow down the pace of procurement in July. 25,646 mt of scrap are expected to be recycled in July, a decrease of 12% from the previous month. In July, the recyclers will mainly consume their inventory and purchase on demand. Taking into account the risk of rising metal prices and nickel and cobalt coefficients, the purchase volume will decrease to a certain extent compared with June. The purchase volume of lithium battery scrap in July will fall MoM.