【SMM Analysis】 Recycling Prices Continue to Decline in Tandem with Metal Salts, with Subdued Market Activity in Recycling Projects

Recycling Sector
Supply Side: This week, lithium salt prices fluctuated, while nickel and cobalt salts saw minor declines. The coefficients for ternary and lithium cobalt oxide black powder continued to drop. For example, the coefficient for ternary cathode black powder currently ranges between 74-77%, and that for ternary battery black powder is 71.5-73.5%. Lithium points for lithium iron phosphate (LFP) cathode black powder stand at 2,500-2,700 yuan per lithium point, while LFP battery black powder ranges from 2,200-2,400 yuan per lithium point. Suppliers and traders remain firm on pricing, though some crushing plants are holding back inventory due to thin profit margins, leading to weaker market transactions compared to April.

Demand Side: Most hydrometallurgical plants are purchasing black powder only for essential needs amid declining nickel, cobalt, and lithium prices. With a pessimistic outlook on future lithium prices, these plants are maintaining raw material inventories at around 1.5 months of safety stock.

Cost Side: Profit margins for most hydrometallurgical plants (excluding top integrated players) remain below breakeven. Crushing plants fare slightly better, but small-to-medium-sized facilities still face inverted margins.

Secondary Use Sector:
The secondary battery market remains sluggish, with B-grade cell prices stable. Falling nickel, cobalt, and lithium prices have slightly softened battery manufacturers’ and traders’ pricing resistance, though declines are limited. Secondary-use companies remain cautious, replenishing stocks only for urgent needs. Global tariff policies have dampened overseas demand, but U.S. market impacts are minimal due to its small share. Domestic supply remains ample, driven by ongoing bus battery replacement projects. B-grade cell prices are stable, with limited upward potential. Some secondary-use manufacturers anticipate further price drops, maintaining minimal purchases. Prices are expected to hold steady or dip slightly in the short term.

Recent Recycling Project Updates:

• A local government and a company signed an agreement for a 30,000-ton/year lithium battery recycling project, now entering implementation.

• A 100,000-ton/year spent ternary lithium battery recycling project in Fujian has initiated environmental impact assessment. The project, with a total investment of 50 million yuan, will produce lithium carbonate and ternary materials.

• A 30,000-ton battery recycling facility in Jiangxi is nearing completion, aiming to produce recycled cathode materials.

• A 20,000-ton/year lithium battery recycling project in Chongqing will focus on secondary-use applications and regenerate materials like lithium carbonate and copper.

• Another 100,000-ton/year ternary lithium battery recycling project in Fujian has begun environmental review, with plans to recycle 10 tons annually.

• An 11,000-ton/year EV battery recycling project in Anhui has entered environmental approval, targeting LFP and ternary battery processing.