16 Aug 2024 | 10:35 UTC

China unveils new used EV power batteries rules; recycling market remains gloomy

Highlights

Regulation to help improve recovery rate of metals used in EVs

China recycling market remains bleak amid falling prices of prime battery metals

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A new Chinese regulatory draft on the recycling of depleted power batteries used in electric vehicles could help improve the recovery rate of metals used in the EV industry and increase the supply of these metals in the long run, although domestic black mass and recycled lithium carbonate prices continued the downtrend in the near term, industry sources said Aug. 16.

The Ministry of Industry and Information Technology, or MIIT, released a draft document on the comprehensive utilization of waste power batteries used in EVs and asked for the opinions to the public Aug. 14.

The new regulatory draft will provide a better environment for the comprehensive utilization of used EV power batteries, especially through the "white list" and other ways to avoid the phenomenon of "bad money driving out good money", industry sources said.

The new draft regulation envisages higher requirements for cascade utilization and recycling of used EV power batteries, compared with one released in 2019.

For example, the amount of waste power batteries used in the cascade utilization should not be less than 60% of the actual recycling amount each year. For recycling enterprises, the recovery rate of lithium in the smelting process should not be less than 90% while the recovery rate of nickel, cobalt and manganese should not be less than 98%.

With the rapid growth of the EV market, the recycling demand for used power batteries is also increasing. However, the waste power battery recycling market is relatively dispersed and faces many challenges, which constrains the development of the industry.

MIIT has released five batches of "white lists" with 156 recycling enterprises being qualified for the regulation released in 2019.

Black mass and recycled lithium markets

China's recycling market remains bleak amid the falling prices of prime battery metals, market sources said. The recycling volume might continue to see a decline in August amid a low operating rate and there is no signal to pick up so far, the sources added.

Platts, part of S&P Global Commodity Insights, assessed Chinese LFP black mass at Yuan 3,200 per metric ton per percent lithium ($446/t) Aug. 15, remaining steady on the day but down Yuan 200/t on the week.

The Chinese domestic market showed little interest in buying LFP black mass because lithium chemical prices are dropping.

Platts assessed battery-grade lithium carbonate at Yuan 70,500/t Aug. 15, down Yuan 2,500/t on the day. Recycled lithium carbonate was assessed at Yuan 69,500/t on the same day, down Yuan 3,000/t.

Market participants said that recycled lithium carbonate was being traded at a discount of Yuan 500-1,000/t to prime lithium carbonate in the spot market.

Considering the spot market value of respective battery chemicals on Aug. 15, the theoretically calculated all-in price of Ni-Co black mass DDP China stood at Yuan 22,664/t, down Yuan 276/t on the day.

Prices for prime battery metals in the Chinese domestic market continued their downward trend amid the supply surplus and softening demand.


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