China lithium-ion battery recycling market 2026 outlook & 2025 review

Overview:

In 2025, the supply-demand dynamic in the lithium battery recycling industry saw little change, with supply continuing to fall short of demand, and downstream manufacturers facing limited access to battery scraps. Starting August 1, 2025, the import of black mass from overseas was permitted, which somewhat alleviated raw material concerns for hydrometallurgical plants. Throughout the year, the prices of lithium battery scrap were significantly influenced by cobalt and lithium chemicals prices, with volatility exceeding 60% for multiple varieties. Cobalt-based scrap, in particular, recorded an annual volatility rate of 222.33%.

1. Lithium Battery Scrap Market Price Review

In 2025, prices for recycled ternary battery showed a clear upward trend, driven by steadily rising cobalt and lithium chemicals prices, which pushed up the discount coefficients for metal salts.

In detail, nickel salt prices increased by 5.63% year-on-year. Cobalt chemical prices surged by 247.66% YoY. Lithium chemical prices rose by 57.44% YoY. Ternary cathode powder (523-type) increased by 69.43% YoY. Lithium cobalt oxide (LCO) scrap also rose sharply, with LCO cathode powder surging by 222.33% year-on-year.

In the lithium iron phosphate (LFP) scrap market, transactions in 2025 were primarily based on factory scrap, supplemented by retired scrap. Throughout the year, LFP scrap prices remained resilient and difficult to decline. Hydrometallurgical plants flexibly utilized financial tools for price-point transactions, effectively safeguarding profit margins and alleviating price inversion phenomena.

2. Lithium Battery Scrap Market Supply

From January to December 2025, the total volume of retired lithium batteries reached 819,000 tonnes, a 90.5% increase compared to 2024. The total volume of recycled lithium batteries (including whole batteries and scrap) was 301,668 tonnes, up 6.99% year-on-year. In detail, it includes 140,342 tonnes of ternary scrap and 10,594 tonnes of LCO scrap, moving up 18.71% and 20.52% YoY respectively. While LFP scrap reached 150,732 tonnes, down 2.71% year-on-year.

Average Price Trends Around Chinese New Year for Lithium Battery Scrap (Past 5 Years)

3. Post-CNY Holiday Market Outlook for 2026

In 2026, as the volume of retired batteries continues to grow and overseas battery scrap supply increases, the supply-demand imbalance in the raw material market is expected to ease. Scrap prices are projected to rise slightly, with the following estimates. In detail:

Ternary cathode powder: Metal salt discount coefficients between 75%–83%.

LCO cathode powder: Metal salt discount coefficients between 80%–92%.

LFP cathode powder: Lithium point price range of Yuan 5,800–8,000/lithium point.

LFP battery powder: Price range of Yuan 5,200–7,500/Li.

The Chinese lithium battery recycling market in 2026 is expected to be driven by both the large-scale wave of battery retirements and the implementation of mandatory regulations. The volumes are forecast to exceed one million tonnes. A key industry shift will be the new Administrative Measures taking effect in April 2026. These regulations mandate integrated vehicle-battery retirement, strengthen full-chain traceability, and enforce producer responsibility, which will significantly reduce non-compliant channels, accelerate industry consolidation, and eliminate small-scale, unregulated workshops. The market will transition from rapid, unregulated growth to a more standardized and concentrated phase, driven by intense competition for raw materials and technological upgrades.

Edited by Cassie Li, lixiangying@mysteel.com