[SMM Analysis]China imported 750,000 tonnes of spodumene in July, up 30.4% month-on-month—equivalent to roughly 67,000 tonnes of lithium carbonate (LCE).

China’s lithium battery recycling industry is entering a key adjustment phase. Since August 1, “black mass” from spent lithium batteries has been officially recognized as a renewable raw material and unified under customs code 382499996. The new rules are stricter, setting higher performance requirements, banning mixed packaging, requiring double-layer packaging, and mandating strict inspections. Non-compliant batches face return shipments. On the market side, the sector is challenged by overcapacity, low utilization (around 30%), intense price competition, and shrinking profit margins. In response, companies are cutting staff, halting or reducing production, lowering processing fees, improving recovery rates, and shifting focus to black mass and smelting feedstock. At the same time, safety risks (such as LFP black mass dust hazards), long customs clearance cycles, and technical bottlenecks (like defluorination) remain significant hurdles. Despite these challenges, the industry still shows potential. New chemical processes can achieve nearly 100% recovery, while long-term demand from new energy vehicles and energy storage provides strong support. Industry experts and SMM emphasize that unified pricing, simplified customs procedures, enhanced workplace safety, and technological upgrades are crucial for sustainable development. Although ASEAN-sourced black mass is cheaper, it generally has lower quality and lower payable rates, with supply dominated by NCM black mass and limited LFP resources.

When “mining” no longer takes place in remote valleys but along the recycling lines of urban factories, we may be witnessing a profound shift in the paradigm of resource utilization.

According to market perspectives, involved mine enterprises lacking complete data need to conduct re-exploration and drilling, a lengthy process that will inevitably lead to overdue report submissions. Moreover, the review timeline and stringency after submission add further uncertainties. Regarding the potential resumption date of CATL's mine, the market also holds significant divergences: One side believes that considering Jiangxi's local economic dependence on the lithium industry, it will push for CATL's review to be completed within 1-3 months; the other side, referencing past lithium mine approval cases and regulatory stringency, judges that the review timeline may extend to half a year or more. More critically, if the other seven mines are confirmed to require license renewal according to lithium mine standards, their shutdowns will further reduce monthly lithium carbonate supply by approximately 5,000-7,000 mt, potentially exacerbating the supply shortage. 

At the Kalgoorlie Mining Forum, the company announced record FY2024-25 production of 755,000 tonnes from its Pilgangoora project in Western Australia. Despite pricing headwinds, PLS completed a A$1 billion self-funded expansion cycle and currently holds A$1.6 billion in liquidity.

During H1 2025, the energy storage cell industry navigated triple disruptions—policy overhauls, large-cell transitions, and foreign competitor influx. Market players aggressively captured opportunities, delivering exceptional performance. However, with lingering demand front-loading risks and persistent margin pressures, whether the short-term capacity surge truly signals clear sailing ahead warrants rigorous scrutiny.

The chosen refinery site on Mission Island, previously home to a decommissioned power station, will have an annual output of 20,000 tonnes of lithium hydroxide (LCE)—sufficient to power half a million EVs yearly.

China currently dominates the global lithium battery recycling field, with over 70% of the recycling capacity, covering the entire industrial chain from battery disassembly and crushing to hydrometallurgical purification. Due to the tight supply of recycling raw materials at this stage, market pricing power is mainly in the hands of upstream suppliers. The industry anticipates that once the import and export policies for black mass are officially liberalized, China is highly likely to transform into the world's major importer of lithium-ion battery black mass.

The immediate catalyst for the futures rally stems from supply concerns over mining license compliance issues in Jiangxi. Market sources indicate eight lithium mines in Jiangxi face rectification orders for environmental and licensing violations, with one major mine's license set to expire in early August under uncertain renewal prospects. Should renewal fail, this could force a temporary suspension, potentially cutting monthly supply by 10,000 LCE (lithium carbonate equivalent).

Ghana's government is preparing to renegotiate terms of the Ewoyaa lithium mining agreement after a precipitous drop in global lithium prices has jeopardized the project's economic feasibility.

Initial assays from the HCK joint venture project, announced on July 10, revealed a 6.9-meter lithium-rich intercept at 174.6 meters depth (drill hole MWOG0002), averaging 2.11% Li₂O with a high-grade 3.45-meter zone grading 3.20% Li₂O.