【SMM analysis】May Lithium Battery Recycling Procurement Continues Decline, Potentially Hitting Annual Low

Comprehensive data analysis indicates a further decline in market procurement for lithium battery recycling in May 2025 compared to April 2025. As of April 2025, the total monthly recycling volume (black mass basis) in the SMM recycling market reached 20,592 tonnes, reflecting a month-on-month decrease of approximately 16.2%.

Demand-Side Dynamics
Most hydrometallurgical plants operated at partial capacity amid sustained declines in nickel, cobalt, and lithium salt prices. Both ternary and LFP hydrometallurgical facilities significantly reduced procurement volumes this month, consuming only essential inventories. Persistent market pessimism toward future lithium salt prices further suppressed purchasing enthusiasm for LFP black mass, resulting in exceptionally thin market activity. Procurement is expected to gradually resume in June as plant inventories deplete.

Supply-Side Pressures
Crushing plants and traders exhibited modest flexibility in psychological selling prices amid falling salt prices. While black mass prices generally followed downward trends in salt prices, their decline lagged behind the pace of salt price reductions. Notably, some crushing plants chose to withhold stocks due to current negative profit margins, awaiting market recovery. This contributed to stagnant market transactions.

Material Price Trends
Prices for battery raw materials—including nickel sulfate, cobalt sulfate, and lithium carbonate—continued declining through May. Lithium carbonate prices fell persistently under supply-demand imbalances, with industrial-grade carbonate briefly dipping below CNY 60,000/tonne.

Policy-Driven Market Outlook
Amid ongoing oversupply conditions, industry participants are increasingly focusing on policy developments: