SMM Analysis: Lithium Battery Recycling Has Broad Prospects and Waste Lithium Batteries Have Become "Sought-After" Products in New Energy Industry

SHANGHAI, May 18 (SMM) - Since the second half of 2021, the prices of upstream raw materials in the power battery industry chain have risen steadily, and the prices of raw materials such as lithium carbonate, cobalt sulphate, and nickel sulphate have soared by nearly 10 times. Waste lithium batteries and battery scrap generated in production process contain nickel, cobalt, and lithium metal, allowing their prices to sky-rocket when the supply of raw materials is tight.

Here is a brief introduction to the pricing method of waste lithium batteries. Taking the most popular waste NMC lithium battery in the recycling market as an example. The recycling price = (SMM refined nickel price × nickel content % + SMM refined cobalt price × cobalt content %) × discount coefficient %. From this formula, it can be seen that in addition to the price fluctuations of refined nickel and refined cobalt, which can directly affect the final recycling price of used lithium batteries, the spot prices and price trends of lithium carbonate, cobalt sulphate, and nickel sulphate will also affect the discount coefficient, thereby affecting the recycling prices. Although lithium is not directly priced in the pricing scheme, the price of lithium carbonate and the relationship between supply and demand will also affect the change in the "discount coefficient %" in the formula.

At present, due to the scarcity of nickel-cobalt-lithium primary resources, insufficient domestic supply, and dependence on imports, the price of battery cathode raw materials has skyrocketed. Many new energy companies have turned their attention to waste power batteries which have the reputation of being called "urban mines". The discount coefficient of waste NMC lithium battery soared to 150% at the beginning of the year. At present, due to the weakening of domestic new energy market demand, the price of waste lithium batteries has also returned to a more rational range.

China is the world's largest new energy vehicle market. About 200,000 mt of power batteries were retired in China in 2020. It is estimated that by 2030, the total number of retired power batteries in China will reach 2.37 million mt. According to relevant regulations, if the capacity of the power battery falls to less than 80% of the rated capacity, it will be subject to mandatory retirement and recycling. So how will the recycling and disposal of so many used power batteries be solved in the future? At present, repurposing and reuse are the two recycling methods for retired power battery. Repurposing works in such as way that "retired" batteries are disassembled and recombined before being applied to energy storage, low-speed vehicles and other fields that do not require high battery energy density. Reuse refers to the method in which waste batteries are dismantled and crushed and then made into black power before undergoing hydrometallurgy to extract expensive metal materials in batteries such as lithium, cobalt and nickel.  In recent years, the nickel-cobalt metal resources required for the production of power batteries in China mainly rely on imports. As the production and sales of new energy vehicles continue to hit new highs, the contradiction between supply and demand of raw materials has become increasingly prominent. Many factors affect the cost of imported raw materials, and the pricing power is dominated by overseas mining companies, which is not conducive to the development of new energy in China in the long run. Therefore, domestic "urban mines" have attracted a lot of attention. At present, domestic battery companies and automobile companies have taken waste recycling as their latest strategic layout.

The development of the new energy industry is inseparable from the supply of nickel-cobalt-lithium metal resources. As one of the important sources of raw materials, waste recycling will bring immeasurable ecological and economic value.