1. The Reality of Survival in the 100 Billion Market
The Truth of Survival in the 100 Billion Market
Looking at the LIB recycling market data for the first half of 2025 from the supply side, the volume of scrapped batteries is indeed increasing. In the power battery segment alone, the scrapping scale in sub-markets like passenger and commercial vehicles continues to expand, and combined with the growth from 3C products and energy storage batteries, the theoretical raw material supply should be sufficient. However, the reality is that the pace of scrapping has not met expectations, and a large volume of used batteries is flowing into unqualified small facilities. Consequently, legitimate black powder factories generally face the dilemma of "not having enough to eat." According to some companies, their operating rate in the first half of the year was less than 40%, while the industry average remained at around 30%.
The inversion of cost and price is further exacerbating the situation for companies. The purchase price of scrapped ternary lithium batteries surged from 120,000 yuan per ton in 2023 to 180,000 yuan in 2024, while the recovery coefficient of the processed black mass fell from 0.8 to 0.6, and the price of auxiliary materials like copper and aluminum dropped by 15% year-on-year. According to the cost-profit model, the profit margin for ternary battery recycling has already fallen to a negative 3.2%, and for lithium iron phosphate (LFP) types, it is even lower at negative 5.7%, trapping many companies in a vicious cycle of "producing at a loss."
Behind this dilemma are three overlapping contradictions: the conflict between non-compliant companies seizing materials with low prices and the high compliance costs of legitimate enterprises; the contradiction between the increase in scrapping volume and the dysfunction of recovery channels; and the conflict between weak downstream demand and the rapid expansion of production capacity. As of the end of 2024, over 100,000 recovery companies were registered in the country, but only a little over 100 meet industry standards, meaning the chaos of "bad money driving out good" is eroding the industry's foundation.
2. The Ten-Year Question: Is it Really Profitable, or a Collective Illusion?
The Ten-Year Question: Is it Really Profitable, or a Collective Illusion?
Facing the industry's cold winter, many console themselves with future expectations. However, whether or not profits can be realized over the next decade hinges on resolving three core issues:
1. When will the raw material shortage be filled?
This is key to determining the industry's revenue foundation. Forecasts suggest that China's scrapped power batteries will reach 1.04 million tons in 2025 and surge to 3.5 million tons in 2030. With the addition of lithium battery factory scrap and some imported resources, the raw material supply will gradually ease. However, it must be noted that the peak scrapping for private new energy vehicles will only truly arrive after 2027, and the current situation heavily relies on factory-generated scrap, leading to insufficient supply stability.
For black powder factories, the "small peak" from 2025 to 2027 is a lifeline. If they can endure this stage, raw material procurement costs are expected to drop by 10-15%. Furthermore, with the improvement of the battery ID traceability system, the disorder of small workshops snatching raw materials will be curbed, and the raw material guarantee rate for legitimate enterprises can be raised to over 70%.
2. How to choose the technological route to make money?
Profitability varies significantly depending on the technology route. Data from the first half of 2025 shows that the processing cost for traditional pyrometallurgy (dry method) is stable at 8,000 yuan per ton, but energy consumption accounts for 45% of the cost, and the lithium element recovery rate is only 60%. Hydrometallurgy (wet method) improved lithium recovery to 90%, but the proportion of reagent costs exceeds 30%, leading to large fluctuations in processing costs.
The true breakthrough in profitability lies in Direct Recycling Technology. Methods like solid-phase regeneration and hydrothermal restoration can achieve material reuse without destroying the cathode crystal structure. Processing costs can reach 15,000 yuan per ton, and the comprehensive cost is 20% lower than the wet method. According to trial data from one company, after adopting the molten salt restoration technology, the regeneration cost for cathode materials dropped from 20 yuan per kilogram to 12 yuan, and the gross profit margin rose to 18%.
3. How much policy dividend can be cashed in?
The Industry Standards for the Comprehensive Utilization of Used Power Batteries for New Energy Vehicles, to be implemented in 2025, is expected to raise the entry barrier and eliminate over 50% of inefficient production capacity. More importantly, the implementation of the Extended Producer Responsibility (EPR) system will force vehicle and battery manufacturers to open up recovery channels. If black powder factories can establish long-term partnerships with automakers, raw material procurement costs can be further reduced by 5-8%.
In the long term, policy-driven standardization will lead to increased industry concentration. It is anticipated that by 2030, the top 10 companies (CR10) will capture over 60% of the market share, and the capacity utilization rate of major black powder factories will stabilize at over 85%, which is more than 50 percentage points higher than the current industry average, making the cost advantage from economies of scale highly apparent.
3. The Crusher Factory's Breakthrough Guide: From Surviving to Thriving
The Crusher Factory's Breakthrough Guide: From Surviving to Thriving
Facing the current situation, it is necessary to proactively seek a breakthrough. The following practical pathways are survival strategies that can be implemented immediately:
1. On the Raw Material Side: Building a "Short, Flat, and Quick" Recovery Network
Instead of competing with small facilities to buy expensive materials, a "local recovery + centralized processing" network must be established. Deploy small recovery points in cities with high numbers of new energy vehicles, focusing on connecting with 4S dealerships and vehicle scrap yards. These will be the core ports for future private car battery recovery. One company's trial showed that after deploying five recovery points in three prefecture-level cities, raw material transportation costs decreased by 20%, and supply stability improved by 30%.
Simultaneously, do not focus only on ternary batteries; the recycling potential of Lithium Iron Phosphate (LFP) batteries is being unlocked. Although the economics of LFP crushing are currently inferior, its recycling value will gradually emerge with the maturation of direct recycling technology, allowing for a preemptive advantage through early planning.
2. On the Technology Side: Implementing a "Gradual" Upgrade and Transformation
There is no need to invest massive amounts of capital all at once to directly switch to a direct recycling production line. A "first modify the pre-treatment, then upgrade the main process" gradual model can be adopted. In the pre-treatment stage, first introduce automated dismantling equipment to replace manual dismantling, which can triple efficiency and reduce labor costs by 40%. Next, upgrade the electrode stripping technology, using low-concentration salt solutions instead of high-concentration solution discharge, which reduces corrosion risk while lowering spent liquid treatment costs.
For companies with certain capabilities, it is recommended to cooperate with research institutions to pilot hydrothermal restoration technology. The equipment investment for this technology is only 60% of solid-phase regeneration, and it is compatible with various cathode materials. By gradually scaling up after a successful trial, the risks of technological upgrade can be effectively controlled.
（趙 嘉瑋）
