China’s battery recycling sector retains dominance despite headwinds: Asian BRM & Recycling

Advanced capabilities driving China lithium-ion battery recycling position

China was expected to maintain its leading global position in lithium-ion battery recycling because of its advanced technological capabilities and highly competitive operating costs, despite some challenging headwinds, Fastmarkets was told at the Asian Battery Raw Materials and Recycling Conference 2025, held April 7-9 in Seoul, South Korea.

The country’s huge battery recycling industry accounts for more than two-thirds of global capacity to both produce and consume black mass, but it was currently facing the challenge of overcapacity, market sources said, with some refiner units heard to be operating at utilization rates as low as 20-30%.

New standards to strengthen China lithium-ion battery recycling supply chain

China’s first national standard for black mass, expected to take effect from July 2025, will provide a formal and unified manual for black mass production in China. It will also lead to a legalization of black mass imports into the country, strengthening the battery recycling supply chain, market sources have said.

Amid increasing market demand, Fastmarkets launched a suite of China domestic electric vehicle (EV) scrap battery and black mass prices on Thursday April 10 to provide greater insight into the supply chain for these critical materials.

The price suite covers both nickel cobalt manganese (NCM) and lithium iron phosphate (LFP) materials, which are the two dominant EV battery chemistries in China.

Surging LFP battery production in China means that LFP black mass will make up 31% of global black mass supply by 2031, from 22% in 2024, according to Fastmarkets’ research data.

Tariffs and market sentiment create challenges in China lithium-ion battery recycling

Despite the increasing interest among global market participants about China’s recycling industry, tariffs have become a major issue and a sticking point when discussing the Asian powerhouse country in recent weeks.

Sentiment among recyclers in the country has been under heavy pressure amid bearish moves seen in battery raw material prices over the past week, stemming from the aggressive rises in retaliatory tariffs between China and the US.

“We need to look at electric vehicle sales in the second half of this year. If China can’t export EVs to the US because of the tariffs, it will have to sell to Europe,” a Chinese trader said on Wednesday, adding that should Europe wish to protect its local carmakers further from Chinese imports, it could create further issues in the Chinese battery raw materials market.

LFP and NCM black mass trends shaping China lithium-ion battery recycling

China NCM black mass

Trading of black mass in the Chinese domestic market was subdued while most market participants adopted a wait-and-see approach due to the uncertain tariff situation, sector sources told Fastmarkets.

“The focus is on downstream customers,” a southern China-based recycler source told Fastmarkets. “Currently, the concern is whether increased costs from exporting batteries or complete vehicles might, in turn, affect raw material costs. As of now, there is no clear conclusion.”

Bids for nickel cobalt manganese (NCM) black mass in the domestic market were heard at payables of 72-75% DDP for nickel, cobalt and lithium. Key market participants also believed this to be the prevailing tradable level in the market during the week.

Fastmarkets’ inaugural weekly assessment of black mass, NCM, payable indicator, nickel, ddp China, % payable Fastmarkets’ nickel sulfate min 21%, max 22.5%; cobalt 10ppm max, exw China, and the assessment of black mass, NCM, payable indicator, cobalt, ddp China, % payable Fastmarkets’ cobalt sulfate 20.5% Co basis, exw China, and the assessment of black mass, NCM, payable indicator, lithium, ddp China, % payable Fastmarkets’ lithium carbonate 99.5% Li2CO3 min, battery grade, spot price range, exw domestic China, were all 72-75% on Thursday.

Fastmarkets’ new DDP China NCM black mass payables are assessed as percentages of metal salts prices for nickel sulfate, cobalt sulfate and lithium carbonate, which is the preferred payable calculation method among participants the China local market.

NCM payables in the market widened downward week on week compared with tradable levels heard at 74-75% DDP for nickel, cobalt and lithium late last week.

China LFP black mass

Sources attributed bearish sentiment in black mass to a weakening of the lithium carbonate price in the domestic market.

Fastmarkets’ daily price assessment for the lithium carbonate, 99.5% Li2CO3 min, battery grade, spot price range, exw domestic China, was 70,000-71,000 yuan ($9,571-9,708) per tonne on Thursday, up from 68,800-70,400 yuan per tonne day on day, but down compared with 72,500-74,000 yuan per tonne a week earlier.

Prices for lithium iron phosphate (LFP) black mass were more sensitive to lithium carbonate price drops, with lithium being the primary target in recycling end-of-life (EOL) LFP batteries, trade sources told Fastmarkets.

Key market participants believed that the workable level for LFP black mass in the China market was 2,400-2,550 yuan per % lithium during the week.

Typical lithium content in Chinese LFP black mass is in the range of 2-3%, according to market participants, with one consumer source noting that it rarely sees material above 2.7% of lithium content in China. Chinese LFP high-grade black powder is generally heard to contain 3.8% lithium content or above, market sources said on Thursday.

Fastmarkets’ first weekly price assessment for black mass, LFP, ddp China, was 2,400-2,550 yuan per % lithium on Thursday.

“LFP black mass could fetch a price of 2,700 yuan per % lithium DDP China last week,” a recycler source based in Southeast China told Fastmarkets. “That was before the lithium carbonate price drop.”

EOL scrap battery prices

EOL NCM battery prices in China were largely steady due to limited trading in the market this week. Tight supply of scrap has lent some support to the prices despite a bearish mood in the key battery raw material markets, trade sources said.

Competition for battery scrap was fierce in China, according to market participants, with demand for NCM battery scrap particularly high in the country, forcing some to focus instead on the historically less-competitive but now rapidly growing LFP segment, according to a Chinese LFP black mass refiner source.

Scrap supply was becoming a “major concern” for both black mass producers and hydrometallurgical refiners, with the projected near-term balance showing that the global market will face a major and continued deficit of scrap supply, according to Luke Sweeney, senior battery recycling analyst at Fastmarkets.

“There is lots of growth in EV scrap supply, but the rapid growth of the recycling industry, coupled with batteries lasting longer than initially expected, has led to lots of companies having to operate at lower utilization rates,” Sweeney said.

In China, soaring EOL lithium-ion battery scrap volumes – albeit still coming at smaller volumes than production scrap – meant that there was a growing EOL scrap trade in the country.

Following market consultation, Fastmarkets decided to launch prices for both battery scrap and black mass in the China local market on April 10 to provide greater insight into the supply chain for these critical materials.

Fastmarkets’ inaugural price assessment for lithium-ion battery scrap, NCM, end of life, prismatic, exw China, was 23,000-25,000 yuan per tonne on Thursday.

But LFP battery scrap prices have weakened compared with a week earlier, tracking the downtrend in lithium carbonate prices, according to market sources.

“The price of sulfur, another raw material for LFP, has also dropped significantly [this week],” a Zhejiang-based consumer source told Fastmarkets.

The prevailing market price of EOL LFP batteries was heard at 7,000-8,300 yuan per tonne on Wednesday, while a week before it was 7,500-8,600 yuan per tonne, according to market sources.

Fastmarkets’ inaugural assessment for lithium-ion battery scrap, LFP, end of life, prismatic, exw China, was 7,000-8,300 yuan per tonne on Thursday.

LFP battery scrap was of a much lower value than NCM due to the raw materials contained in it, even in the China market, where LFP recycling volumes are growing rapidly.

“The lack of nickel and cobalt kills the economics of recycling LFP batteries,” Sweeney said last year.

“Modern battery cathode chemistries have less inferred value, be it in the form of LFP, lithium manganese iron phosphate batteries [LMFP] or from the decreasing cobalt content in NCM cathodes,” he added. “This poses a big long-term economic problem for battery recyclers because their battery feedstock is set to decrease in intrinsic value over the next ten years.”