SMM Exclusive: Implications of China’s Black Mass Import Regulations on Domestic Lithium Battery Recycling Industry?

On June 10, 2025, the Ministry of Ecology and Environment (MEE) of the People's Republic of China officially announced the "Announcement on Matters Related to Regulating the Import Management of Recycled Black Mass Raw Materials for Lithium-ion Batteries and Recycled Steel Raw Materials". This document assigns the customs Harmonized System (HS) code 3824999996 to recycled black mass raw materials for lithium-ion batteries. The regulations will take effect on August 1, 2025.
I. Specific Standards for Black Mass Import/Export
The announcement specifies that recycled black mass raw materials for lithium-ion batteries meeting the designated standards are not classified as solid waste and can be freely imported or exported. Furthermore, shipments must not mix recycled black mass raw materials with other categories of recycled materials. The same customs declaration form is prohibited from declaring multiple types of recycled raw materials.
The import/export standards outlined in this document differ from the "Standard for Recycled Black Mass for Lithium-ion Batteries" (GB/T 45203-2024), which was released on December 31, 2024, and is scheduled to take effect on July 1, 2025. Issued by the State Administration for Market Regulation (SAMR) and the Standardization Administration of China (SAC), this standard categorizes recycled lithium-ion battery black mass into Type I and Type II, corresponding to NMC battery black mass, NMC electrode scrap black mass, LFP electrode scrap black mass, and LFP battery black mass, respectively. Consequently, it is anticipated that after liberalization, these types of black mass meeting the standard will be freely importable and exportable.
II. Overview of China's Lithium-ion Battery Black Mass Market
Currently, China accounts for at least 70% of global lithium battery recycling capacity, encompassing both dismantling/crushing and hydrometallurgical processing capabilities. Due to tight supply, pricing power remains concentrated upstream with sellers. As a result, following the formal liberalization of black mass import/export, China is expected to become a net importer of lithium-ion black mass. Presently, with prices for most salt products continuing to decline and crushing plants/hydrometallurgical plants operating at sustained losses, many hydrometallurgical plants have scaled back external procurement and are operating at partial capacity.
As of June 16, 2025:
- **NMC Electrode Scrap Black Mass**: Ni+Co coefficient 73-75%, Li coefficient 70-73%.
- **NMC Battery Black Mass**: Ni+Co payable 70-72%, Li payable 68-70%.
- **LFP Electrode Scrap Black Mass**: prices per 1% lithium 2,200-2,350 CNY.
- **LFP Battery Black Mass**:prices per 1% lithium 2,000-2,150 CNY.
III. Overview of Overseas Lithium-ion Battery Black Mass Markets
Japan and South Korea also possess dismantling/crushing and hydrometallurgical processing lines. However, limited domestic availability of production scrap and end-of-life batteries constrains overall scale. Local NMC black mass uses the coefficient system, with prices primarily settled based on international nickel and cobalt metal prices.
Europe and North America primarily generate NMC, low-cobalt NMC, and some consumer battery scrap. They have some dismantling/crushing capacity and hydrometallurgical projects in pilot/lab stages. However, in October 2024, the European Commission revised its list defining waste subject to specific controls, classifying black mass and alkaline waste batteries as hazardous waste. Post-revision, products such as lithium-ion battery black mass and waste lithium-ion batteries will be banned from export to non-OECD countries, including Southeast Asia and China. Previously, much European black mass was shipped to Japan, South Korea, or Southeast Asia for pre-treatment before trade. NMC black mass traded in Southeast Asia is typically priced based on international nickel and cobalt metal coefficients, though some companies also reference domestic Chinese lithium carbonate platform prices.
After formal liberalization, the United States and Southeast Asia are expected to become major exporters of NMC black mass. Their black mass pricing systems, especially for NMC, are relatively mature due to three reasons: 1) NMC black mass contains three valuable metals, commanding higher value and market attention; 2) Overseas end-of-life vehicles are predominantly NMC-based, giving NMC scrap a higher market share; 3) Overseas lithium ore prices are near cost lows, and persistently low lithium carbonate prices make recycling LFP black mass economically unviable in the short term, resulting in a less mature LFP black mass pricing system compared to NMC.
IV. Challenges
The standard for recycled black mass specifically sets limits for water-soluble fluoride content in two categories: ≤0.1% and ≤0.4%. Fluoride primarily originates from LiPF6 (lithium hexafluorophosphate). the solute in the electrolyte (one of the four main battery materials). Fluoride ions readily corrode equipment, reduce salt recovery yields, and cause severe environmental pollution. Overseas, hydrometallurgical processing of waste lithium batteries has progressed slowly due to challenges in treating fluoride-containing wastewater and exhaust gases. The fluoride content requirement in the new standard is relatively high, making it difficult for overseas processed black mass to fully comply with the import/export standards.
Additionally, while regions like North America, Southeast Asia, Japan, and South Korea possess black mass available for export, China's domestic recycling capacity across all stages is severely oversupplied and chronically loss-making. Importing black mass can alleviate supply tightness but cannot immediately restore profitability for crushing and hydrometallurgical plants. Only as capacity gradually rationalizes and the large-scale wave of end-of-life batteries slowly arrives, restoring market supply-demand balance, can recycling companies' profits gradually recover.
SMM's View:
The release of this standard provides strong support for expanding channels for key recycled raw materials like lithium-ion battery black mass in China. After receiving the draft soliciting opinions in March 2025 (indicating potential liberalization in H2), most hydrometallurgical recycling companies have significantly increased their focus on overseas lithium battery black mass traders. Multiple companies currently intend to collaborate with overseas traders to import local black mass once import/export is formally liberalized.