[SMM Analysis] Recycling prices continue to fall along with salt prices, and the recycling production market is relatively clear

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Recycling: Supply side: This week, lithium chemical products were mainly oscillating, while nickel salts and cobalt salts dropped slightly. The black mass coefficients for ternary and LCO also continued to decline this week. Taking ternary black mass as an example: Currently, the coefficient for ternary pole piece black mass is 74-77%, and for ternary battery black mass, it is 71.5-73.5%. The lithium point value for LFP pole piece black mass is 2,500-2,700 yuan/mtu, and for LFP battery black mass, it is 2,200-2,400 yuan/mtu. On the supply side, the psychological selling prices of grinding mills and traders remain relatively firm. Additionally, some grinding mills, as their current profits are still below the surplus line, choose to hold back from selling and wait for market conditions to improve. Market transactions were sluggish compared to April on a MoM basis. Demand side: Most hydrometallurgy plants are only making just-in-time procurement of black mass amid the continuous decline in nickel, cobalt, and lithium salt prices. Given the market's pessimistic outlook on subsequent lithium salt prices, they are only maintaining a safety stock of raw materials for about one and a half months. Cost side: Currently, except for leading integrated hydrometallurgy plants, most hydrometallurgy plants' profits remain below the surplus line. Grinding mills' profits are slightly better than those of hydrometallurgy plants, but some small and medium-sized grinding mills' profits continue to be negative.

Second-life Application: Currently, the second-life application market remains sluggish, and the overall prices of B-grade second-life battery cells are basically stable. On the raw material side, as nickel, cobalt, and lithium salt prices continue to decline, battery manufacturers and traders have somewhat compromised on their refusal to budge on prices, but the decline is relatively small. Second-life application enterprises are pessimistic about subsequent price changes and are only making just-in-time restocking. Additionally, affected by global tariff policies, the demand for overseas export projects has been impacted to some extent. However, as the US battery cell market share is not high, the overall prices of battery cells and lithium chemicals remain stable. The supply of second-life battery cells in the domestic market still appears relatively sufficient compared to demand, and market supply continues to include last month's bus battery replacement projects across various regions, with overall supply growing slowly. It is difficult for B-grade battery cell prices to increase and remain basically stable. In the short term, some second-life application producers, expecting subsequent price declines, still focus on just-in-time procurement. It is expected that prices will remain stable or drop slightly.

This week's recycling project developments are as follows:

[Tens of Thousands of Tons of Lithium Battery Recycling Project to Be Implemented] Recently, the People's Government of Dushanzi District and Xinjiang Fengyan Resources Recycling Co., Ltd. (hereinafter referred to as "Xinjiang Fengyan Company") officially signed a strategic cooperation agreement to jointly promote a 30,000 mt/year comprehensive recycling project for scrap lithium batteries. The signing ceremony was held at the District Bureau of Commerce, marking the official entry of the project into the implementation stage.

[Fujian's 100,000 mt Recycling and Reuse Project for Scrap Ternary Lithium Batteries to Be Implemented] Recently, Fujian Environmental Protection conducted the first information disclosure for the environmental impact assessment of the recycling, dismantling, and reuse project for scrap lithium batteries by Fujian Zhenhongfa Technology Co., Ltd. It is understood that the construction unit of the Fujian Zhenhongfa Lithium Battery Recycling, Dismantling, and Regeneration Project is Fujian Zhenhongfa Technology Co., Ltd. The total investment in the project is 50 million yuan, with 1 million yuan allocated for environmental protection. The project has an annual recycling and treatment capacity of 10 mt of scrap ternary cathode material lithium batteries, with the main products being lithium carbonate, ternary cathode material, etc.

[The 30,000-mt battery recycling project is expected to commence production] Recently, at the construction site of the Ganzhou Cyclewell Power Battery Recycling and Integration Project, it was announced that upon reaching full production, the project will have an annual production capacity of 30,000 mt of recycled cathode materials for retired power batteries.

[The 20,000-mt scrap lithium battery second-life application and regeneration project is here] This project is located in Zone B, East District, Tongnan High-Tech Industrial Development Zone, and is of great significance. It involves the second-life application of 0.1 GWh of scrap lithium batteries (approximately 1,000 mt/year of scrap ternary cathode material lithium batteries and scrap LFP batteries), the recycling of 10,000 mt/year of scrap LFP batteries, and 6,000 mt/year of scrap LFP positive pole pieces (equivalent to 10,000 mt/year of scrap LFP batteries). Through second-life application, light power battery packs and repaired battery packs are produced, while through regeneration, resources are recovered to obtain black mass, which is further processed to obtain battery-grade lithium carbonate, battery-use iron phosphate, sodium sulfate, and copper sponge, etc.

[The 100,000-mt scrap ternary cathode material lithium battery regeneration project in Fujian has landed] Recently, Fujian Environmental Protection released the first information disclosure on the environmental impact assessment of the "Fujian Zhenhongfa Technology Co., Ltd. Fujian Zhenhongfa Lithium Battery Recycling, Dismantling, and Regeneration Project," an event that has attracted widespread attention within the industry. The project is located in the Foda Industrial Park, Maluan Road, Jimei District, Xiamen City, with a total investment of 50 million yuan and an annual recycling and treatment capacity of 10 mt of scrap ternary cathode material lithium batteries. The main products are lithium carbonate, ternary cathode material, etc.

[The 10,000-mt scrap NEV lithium battery project has landed in Anqing, Anhui Province] Recently, the Huaining County Ecological Environment Bureau of Anqing City, Anhui Province, released a pre-approval announcement for the "Environmental Impact Report on the Annual Recycling and Crushing of 11,000 mt of Scrap NEV Lithium Batteries Project by Anhui Lichun Solid Waste Disposal Co., Ltd." Upon completion, the project will have an annual recycling and crushing capacity of 11,000 mt of scrap lithium batteries, including the annual recycling and disposal of 6,000 mt of scrap LFP battery packs, 3,000 mt of scrap ternary cathode material lithium battery packs, 1,000 mt of scrap LFP battery positive pole pieces, and 1,000 mt of scrap LFP battery negative pole pieces.

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