The industry is full of chaos, and the price of raw materials is rising
According to EVTank, the theoretical recovery of lithium-ion batteries in the Chinese market in 2020 is 478,000 tons, but the actual statistics of the real recovery is only 196,000 tons, and a large part of it is processed by enterprises that do not have recycling funds.
Wu Hui, general manager of the research department of Yiwei Economic Research Institute, believes that the recycling rate of waste batteries is obviously low, mainly due to imperfect recycling channels and lack of market supervision, etc., most of the decommissioned batteries flow into the hands of informal enterprises or individuals, making it difficult for compliant enterprises to recycle.
In 2016, the Ministry of Industry and Information Technology formulated the "Industry Specification Conditions for the Comprehensive Utilization of Waste Power Batteries for New Energy Vehicles", and in September 2018, December 2020 and November 2021, it has announced three batches of qualified enterprises, which have been regarded as the white list of power battery recycling in the industry.
A total of 45 companies on the white list, the so-called regular army, have nationally recognized power battery recycling qualifications. However, the actual situation is that automobile manufacturers, power battery manufacturers, scrap car dismantling enterprises, 4S stores, power exchange mode operation enterprises, etc., are the main channels for power battery recycling.
Enterprise investigation data shows that there are currently as many as 40,600 power battery recycling related enterprises in the mainland. In 2020, there will be 3,321 new power battery recycling-related enterprises in the mainland, an increase of 142.94% year-on-year; by 2021, the number of new related enterprises will soar to 24,400, up 635.17% year-on-year.
This has created a situation where there are more monks and less porridge, and the irregular army not only grabs the supply, but also because the operating cost is lower, it can obtain the supply at a higher price, which invisibly disrupts the orderly competition within the industry.
Wu Hui said that the reason why a large number of battery recycling companies have begun to lay out the recycling of lithium iron phosphate batteries is mainly because of the rapid rise in the price of lithium battery-related raw materials, especially lithium carbonate, so that lithium iron phosphate batteries that originally did not have the value of disassembly can be profitable.
In simple terms, the sharp rise in the price of raw materials for power batteries has not only increased the price of electric vehicles, but also increased the economic value of recycling waste power batteries.
The latest data show that as of March 30, 2022, the battery-grade lithium carbonate quotation was 517,500 yuan / ton, up 80% from the beginning of the year and nearly 5 times from the same period last year; the electrolytic cobalt quotation was 562,500 yuan / ton, up 15% from the beginning of the year and 59% from the same period last year; the price of electrolytic nickel was 219,400 yuan / ton, up 42.9% from the beginning of the year and 78.7% from the same period last year.
It is true that geopolitical factors such as the Russian-Ukrainian conflict have forced large fluctuations in commodity prices, which is one of the main reasons for the rise in the price of raw materials for power batteries and is not sustainable. However, even if this part of the factor is not considered, it is only the continuous improvement of the market demand for new energy vehicles, which is also continuing to promote the rise in lithium prices.
In 2021, the average price of the domestic battery-grade lithium carbonate market is about 122,600 yuan / ton, an increase of 168.9% year-on-year; the average price of lithium hydroxide market is about 114,100 yuan / ton, up 120.3% year-on-year.
In the case of the continuous rise in the price of raw materials, the price of waste power battery recycling has also risen. At present, the discount coefficient of ternary material recycling has jumped from about 70% in the middle of last year to 140%, and the lithium iron phosphate cathode waste powder has doubled in 1 month.
Dongguan securities pointed out that the price of waste lithium iron phosphate batteries has increased from about 2,000 yuan / ton in early 2021 to nearly 20,000 yuan / ton, the recycling price of waste ternary batteries has exceeded 40,000 yuan / ton, and the higher value of lithium cobalt oxide even exceeds 100,000 / ton.
Obviously, driven by the rise in raw material prices, the price of battery recycling has been inflated.
Not only that, for the 45 companies on the white list, in the face of the turmoil of the irregular army, enterprises need to pay a higher price than the market price in order to obtain the target old battery and maintain the supply by sacrificing profits. As a result, the risks of business operations are further expanded.
Dongguan Securities pointed out that at present, the construction of recycling channels for domestic waste power batteries is not perfect, industry norms are still in the initial stage, the state has not yet established qualification management for the recycling of waste power batteries, and problems such as disorderly competition and environmental protection hazards in the industry are becoming increasingly prominent.
Power battery recycling is a high-input, high-threshold industry, only a healthy development of the market environment, in order to avoid the phenomenon of good currency return, bad currency flooding.
If you want to solve this problem, you need car companies and power battery companies to clearly require bidders to be whitelisted companies when bidding for the recycling of decommissioned power batteries. In addition, it is also necessary to further prevent acts of unfair competition such as hoarding and speculation.
In addition, in the short term, the power battery recycling competition is the recycling channel. However, in the long run, with the gradual maturity of policies and regulations, patented technology and recycling technology are the embodiment of enterprise competitiveness. When a sufficiently high technical barrier is established, the entire industry will enter a stage of orderly development.
Hundreds of billions of wind outlets are coming, and capital runs into the market
If you do not consider the cycle life, only look at the calendar life, the early installed power batteries will generally be used for about 6 years and will be retired. Considering that the sales of new energy vehicles in the mainland began to increase since 2015, the first time it exceeded the 100,000 mark and reached 331,000 units. According to the time calculation, the peak period of the decommissioning of the first batch of power batteries is close at hand.
According to the "White Paper on the Development of China's Waste Lithium-ion Battery Recycling and Dismantling and Cascade Utilization Industry (2022)" released by EVTank and the Yiwei Economic Research Institute, the theoretical recovery of waste lithium-ion batteries in mainland China will reach 591,000 tons in 2021, of which the theoretical recovery of waste power batteries will be 294,000 tons.
According to EVTank's forecast, the recycling volume of theoretical waste lithium-ion batteries in China will reach 2.312 million tons in 2026, and the theoretical market size will reach 94.32 billion yuan.
When a hundred billion outlet is placed in front of us, not only the industrial chain moves up and down, but capital also flocks to it.
As a leading global power battery company, CATL entered the power battery recycling business as early as 2013 through the acquisition of Guangdong Bangpu Recycling Technology Co., Ltd. At present, Bangpu Cycle has become the technical benchmark of the whole process of China's power battery recycling and treatment, and is one of the two leading enterprises in domestic power battery recycling.
The NINGDE Times Bangpu Integrated New Energy Industry Project officially started construction in December 2021. With a total investment of about 32 billion yuan, the project integrates phosphate ore, raw materials, precursors, cathode materials, battery recycling and other links of business, covering the whole life cycle of the battery. This means that the Ningde era has fallen another son in the field of power battery recycling.
Nest Energy, which was born out of Great Wall Motor, completed series A, B and B+ rounds of financing in February, July and December last year, with financing amounts of 3.5 billion yuan, 10.28 billion yuan and 6 billion yuan respectively. Not only that, But Hive Energy also signed agreements with Huayou Cobalt and BASF in January and October to cooperate in the recycling of power batteries.
As a wholly-owned subsidiary of Zhongwei Shares, Guizhou Zhongwei Circular completed the capital increase and share expansion by introducing industrial funds in November last year. After the Guizhou Ecological Environmental Protection Fund exchanged 180 million yuan for 8.25% of the equity, the registered capital of Guizhou Zhongwei Cycle increased from 400 million yuan to 436 million yuan.
In the same month, Zhongwei also signed a memorandum of strategic cooperation with South Korea's SungEel Hitech, and the two sides plan to cooperate in battery recycling, dismantling and wet smelting projects in Europe. The latter is an e-waste recycling and refining company with a battery recycling network throughout South Korea, China, Hungary, Poland, and Malaysia.
In addition, Nantong Beixin completed nearly 100 million yuan of A round financing in March last year, led by Yingke Capital. According to public information, Nantong Beixin is a power battery recycling solution provider, and the core customers are all leading enterprises in the precursor, cathode and nickel and cobalt industries.
Also in March, Guoxuan Hi-Tech signed an investment cooperation agreement with the People's Government of Feidong County, Hefei City, planning to build a new power battery industry chain project in the local area. The project includes the upstream raw materials and battery recycling production base of the power lithium battery, with a planned total investment of 12 billion yuan, and is expected to be completed and put into operation within two years.
In August last year, Ewell Lithium and Grimme signed the Memorandum of Cooperation on the Targeted Recycling of 10,000 Tons of Recycled Nickel Products. According to the agreement, the former will provide scrapped nickel-containing power batteries and battery waste to Grimme, while the latter will supply recycled nickel products to Ewell Lithium Energy, further improving the supply guarantee capacity of key raw materials required by the two companies.
Subsequently, Fu Neng Technology also signed a strategic cooperation framework agreement with Grammy. According to the agreement, the decommissioned/waste power batteries and waste materials generated by Fu Neng Technology's global supply chain will be centrally delivered to Grimme for recycling, dismantling, disposal and utilization by both parties according to the agreed price of the market situation, so as to achieve full life cycle traceability management.
In September last year, Sean Technology received hundreds of millions of yuan of strategic investment, introducing a number of new shareholders such as Matrix Partners China and China Merchants Securities. The company has hazardous waste, lithium battery comprehensive utilization and material development three major business segments, after this round of financing will increase the new energy lithium battery material resource recycling technology research and development investment.
In November last year, Grammy signed a cooperation agreement with Ruipu Energy. The two sides will jointly establish the whole industrial chain of power batteries to achieve safe recycling, storage and green disposal of lithium-ion batteries. Founded in 2017, Ruipu Energy is a fortune 500 company in the world, Qingshan Industrial, which is an enterprise in the field of new energy.
In December last year, Huayou Cobalt signed a strategic cooperation agreement with Fu Neng Technology to agree on the procurement and cooperation of ternary precursors, the recycling of waste materials and waste batteries, and the development, application and exchange of ternary cathodes and ternary precursors.
In addition, AVIC Lithium Battery received equity financing of 12 billion yuan in September last year; Huineng Technology received a strategic financing of 326 million yuan in October; Ganfeng Lithium plans to establish a large-scale integrated equipment that can recycle 100,000 tons of decommissioned lithium batteries per year, and continue to expand its business downstream by expanding the production capacity of lithium battery recycling business.
Entering 2022, Tianneng Holding Group intends to invest in the construction of a high-value recycling project for 100,000 tons of waste lithium-ion batteries per year in Binhai County, Jiangsu Province, with a total investment of 3 billion yuan. Jinyuan Co., Ltd. signed a cooperation agreement with Shanda Qili to expand the waste lithium battery recycling network and carry out cooperation in waste lithium battery recycling, cascade utilization and recycling.
Ronbay Technology and Grimme reached a cooperation agreement, the two sides will jointly build a strategic cooperation system based on the "nickel and cobalt resource mining - power battery recovery - ternary precursor manufacturing - ternary material manufacturing" industrial chain. Tianqi Co., Ltd. cooperated with Jingdong Technology to create a lithium battery recycling ecosystem. Guanghua Technology and Terrestrial Car Rental (Shenzhen) Co., Ltd. cooperation, the two sides will build a waste power battery recycling system,
Judging from the action of the secondary market, power battery recycling is indeed on fire, especially battery manufacturers, which can be described as rushing to describe. Mainly because recycling can form an industrial closed loop, enhance the cost reduction space of enterprises, and make business models more diversified.
In fact, automakers are also actively deploying, such as domestic BYD, BAIC BJEV, GAC BJEV, as well as overseas Volkswagen, Mercedes-Benz and so on.
All in all, the recycling of power batteries has become the focus of the next stage of development of the new energy automobile industry. However, at present, it is still in its infancy, and there are still multiple problems such as policies and regulations, technical specifications, traceability mechanisms, and network compliance that need to be solved.
Overall, the early arrival of the outlet did expose many problems. But this is not a bad thing, early detection and early solution, can promote the development of the mainland new energy automobile industry faster. After all, the dependence of continental power battery raw materials on foreign countries is too high, and recycling can alleviate the pressure of upstream supply shortage and is also conducive to national energy security.