The lithium-ion battery retirement tide anticipated starting 2028 has encouraged the market players to position themselves in the recycling market in advance, with the installed battery recycling capacity surpassing 3 million tonnes/year already by 2024 in China.
While the recycling sector remains an absolute seller's market, the battery scrap entering the recycling market has been contracting in terms of black mass production since 2023, indicating poor profitability in the recycling market throughout the year.
Source: Mysteel
Still, the capacity expansion course sustains with footprint of domestic players seen across the globe, impelled by diversified driving forces behind the scenes.
First, the recycling projects are designed to digest the rich resources of battery waste, including end-of-life batteries as well as process waste, which are further divided into two categories.
The first ones are mostly found in countries and regions with a vast electric vehicle (EV) market, including the US and Europe, as well as Japan and South Korea, where many recycling projects are already in planning or construction stage. These markets boast a relatively big EV market, and the active localization of lithium-ion battery industry chain also suggests sufficient process waste in the future.
The Southeast Asia has become another hot spot for new recycling projects, with considerable black mass capacity already in operation. And there are also a few hydrometallurgy projects, though most of them are small. The recycling projects in Southeast Asia primarily source raw materials from the developed economies like Europe.
(Mysteel: China battery recycling enterprises cooperate with Southeast Asia region)
Nevertheless, the recycling market in Indonesia is more than likely to form a closed-loop cycle thanks to its rich nickel reserves, which have attracted many cathode active material (CAM) producers to establish plants domestically. And the recycling projects will provide additional raw materials resources for CAM plants.
Though the recycling market is challenged by serious overcapacity at present and will likely be constrained by such condition in the next few years, the development has been active supported by the great potential in the EV market around the globe amidst the green transition.
Written by Aggie Hu, huchenying@mysteel.com
