Lithium Battery Recycling Market Weakened in Sep on Boomig Cost and Mounting Risks

SHANGHAI, Nov 16 (SMM) - According to SMM research, in October 2022, a total of 27,802 mt of lithium battery scraps were recycled in China (including scrap in the form of battery, pole piece and black mass), and the recycling volume fell slightly by 1% compared with September. Specifically, the recycling volume of ternary battery scrap came in at 18,958 mt, taking up 68% of the total volume; LFP battery scrap 8,021 mt, taking up 29%; and LCO battery scrap 823 mt, occupying the remaining 3%.

In October, the price of lithium battery scrap, including ternary and LFP battery scrap, continued to rise rapidly trailing the price hike of lithium carbonate. In light of high cost and greater risks, powdering enterprises tended to purchase battery scrap based on the sales result to ensure the sales prices and channels. Hydrometallurgy companies, on the other hand, also found the prices of pole plate and black mass relatively high. Therefore, in order to avoid losses, they raised the purchase prices of battery-grade and industrial-trade lithium carbonate and crude lithium carbonate to boost the market quotes. At present, due to the market's bearish sentiment on the prices of cobalt products as well as the stable demand of nickel products, recycling companies tried their best to recycle scrap with high nickel and low cobalt content.

The SMM Lithium Battery Scrap Price Calculator was officially launched in late October. It is mainly dedicated to addressing the two pain points of "benchmark price determination" and "discount calculation" in the process of lithium battery recycling. The Calculator uses SMM battery-grade nickel sulphate, cobalt sulphate and lithium carbonate prices as the benchmark price, as the prices of primary metal are mostly settled by overseas ore traders, which mirror the alloy market dynamics in Europe and US. On the contrary, the spot prices of nickel, cobalt and lithium salt could better reflect the supply and demand dynamics in the Chinese new energy market, which is closer to the actual trading situation. The discount calculation is made independently based on the spot prices of nickel, cobalt and lithium salts, which is designed to try to mirror the actual production situations of manufacturers as a result of varied process routes, production costs and profit expectations.

SMM estimates that the total recycling volume of battery scrap will amount to 28,062 mt in November, up 1% MoM, including 18,469 mt of ternary battery scrap, 8,563 mt of LFP battery scrap, and 1,031 mt of LCO battery scrap.