SMM Expects the Recycling Volume of Lithium Battery Scrap in H2 2022 to Reach 172,782 mt, up 31% from H1 2022

SHANGHAI, Jul 29 (SMM) - According to the SMM survey, a total of 131,446 mt of lithium battery scrap (including batteries, pole pieces and black mass) were recycled in China from January to June 2022. In January 2022, recycling enterprises rushed to restock lithium battery scrap raw materials to reserve their raw material inventory after the Spring Festival holiday. In February 2022, due to the Spring Festival, logistics and transportation stagnated, and suppliers resumed their work late, thus the purchase of scrap decreased. Enterprises mostly consumed their in-plant inventory of raw material, and the recycling volume dropped by 57% compared with January. At the beginning of March 2022, the "Black Swan" incident of nickel prices directly affected the domestic prices of refined nickel. The pricing of lithium battery scrap is based on the prices of refined nickel and nickel content. At this time, the downstream precursor procurement tended to be cautious, affecting the demand for nickel and cobalt salts. Recycling enterprises mostly held a wait-and-see attitude and slowed down their purchases, etc., resulting in the overall recycling volume still not recovering to the level of January. From April to May 2022, the pandemic situation in China was severe. Long-term pandemic-related closure and control in Shanghai and other places affected the supply chain and production of some car companies, weakening the demand in the ternary market. However, the cost of recycling lithium battery scrap gradually increased, and the profits of nickel-cobalt products decreased. Some enterprises had to cut their production to mitigate risks, which indirectly leads to the low recycling volume. In June 2022, with the improvement of the pandemic, the ternary demand gradually recovered. Recycling enterprises made a large number of purchases and replenishment in June, and the recycling volume increased by 62% compared with that in May.

According to the SMM data, from January to June 2022, 82,963 mt of ternary scrap, 38,290 mt of LFP scrap and 10,192 mt of LCO scrap were recycled. Ternary scrap accounts for 63%, LFP scrap accounts for 29%, and LCO scrap, for 8%. Because the ternary scrap contains Ni-Co-Li elements, it can be recycled and extracted to make nickel sulphate, cobalt sulphate, lithium carbonate and other raw materials, and the comprehensive yield is higher than that of LFP and LCP. Therefore, ternary battery powder and pole piece powder are the hottest raw materials in the recycling market, and the former accounts for more than half of the recycling industry. The lithium in LFP scrap can be recycled, and the output of lithium carbonate can also bring higher gross profit. At present, it is on the eve of the decommissioning of LFP batteries, recycling enterprises are also laying out LFP scrap production lines, and the recycling volume of LFP will increase gradually and steadily. As an important raw material for recycling cobalt smelting enterprises, LCO scrap can produce high cobalt salt to ensure the long-term supply of cobalt salt, and at the same time, recycling and extracting lithium can also obtain some considerable profits.
According to the SMM data, from January to June 2022, 13,739 mt (in metal content) of nickel, 14,300 mt (in metal content) of cobalt and 5,045 mt (in metal content) of lithium were recycled. The nickel-cobalt yield can reach 98% and the lithium yield reaches 85%.

According to SMM data, from January to June 2022, 10,759 mt of industrial-grade lithium carbonate, 10,245 mt of battery-grade lithium carbonate and 7,029 mt of crude lithium carbonate were recycled. In the first half of 2022, the demand for LFP batteries recovered well, and the capacity of LFP anode material enterprises was gradually released, but the supply deficit of lithium carbonate remained unchanged. Under the tight supply situation, the prices of lithium carbonate were high and stable, and the recycling end could supplement about 20% of the social supply of lithium carbonate. Recycling enterprises were optimistic about lithium recycling.

SMM expects the recycling volume in the second half of 2022 to reach 172,782 mt, up 31% from the first half of 2022. In the second half of 2022, with the increase in power battery scrap and the expansion of anode and battery enterprises, the supply of scrap may increase, and the new capacity of recycling enterprises will gradually release, demanding more scrap, so the recycling volume will rise compared with the first half of 2022. As another important source of lithium battery raw material, the market will keep close attention to the lithium battery scrap, and the value of lithium will be heightened. If the recycling rate of lithium is further improved, higher profits will be obtained, and the competition in the recycling market will be more intense. In order to seize the market of lithium battery scrap, the integration of dismantling and smelting in the recycling industry chain has gradually become the general trend.