Black Mass Rebounds in China: Procurement Up, Prices Firm, Margins Still Thin
China’s recycling market extended its recovery into October: procurement volumes rose 7.3% m/m as higher lithium carbonate prices kept LFP hydromet output elevated and cobalt sulfate strength aided ternary plants. Black mass pricing and lithium coefficients edged up, yet most LFP hydromet producers remain loss-making on externally sourced feed. New domestic projects signal accelerating capacity, while Europe’s policy environment and early recycling build-outs (e.g., Altilium) tighten black mass logistics. Near term, prices look supported; margins stay constrained.
Market snapshot
China procurement reached 30,200 mt in October, +7.3% m/m. September output included ~8,500 mt recycled lithium chemicals (+12% m/m), 5,580 mt Ni salts (+6.29% m/m) and 1,350 mt Co salts (+2% m/m).
Transaction sentiment improved alongside nickel, cobalt and lithium chemical prices, especially in LFP recycling.
Prices & coefficients
LFP black mass: CNY 2,700–2,900 per lithium point this week (+75/point vs prior period). Some market quotes late-Oct peaked CNY 2,900–3,100/point (+150/point w/w).
Ternary black mass: Ni–Co coefficient 74–76% (flat w/w); Li coefficient 70–73% (higher w/w).
Profitability & run-rates
LFP hydromet (external feed): still loss-making at −5% to −6%; many producers paused procurement despite stronger Li₂CO₃. Ternary hydromet and LCO margins remain ~1–3% amid higher cobalt coefficients.
Capacity pulse: Mainland China adds scale
New and expanding projects across Anhui (75 kt/y), Hunan (400 kt/y), Xinxiang (60 kt/y) and others reflect accelerating infrastructure for dismantling, black mass generation and materials regeneration. Execution is staged but directionally increases domestic feedstock processing capacity.
Europe’s “urban mining” build-out & policy drag
UK recycler Altilium opened ACT2 (Plymouth) on Oct 10 and targets 30,000 mt CAM by 2030, with ACT3/ACT4 planned to process scrap from >150,000 EVs/y; investors include Marubeni and Mizuho.
The EU Battery Regulation classifies black mass as hazardous waste, tightening exports to non-OECD and pointing to likely UK alignment; observed Ni-Co black mass ex-works Europe was $2,856/mt (Oct 23).
What this means
Feedstock: Rising domestic capacity + firmer Li prices support stable-to-higher black mass realizations, but loss-making LFP hydromet caps run-rate upside.
Logistics & trade: EU/UK rules may localize European black mass flows, tightening availability for Asian refiners at the margin while supporting European realized prices.
Outlook
Prices: Slightly bullish — lithium-led support and seasonal buying keep LFP lithium-point firm; ternary coefficients steady-to-higher with cobalt.
Margins: Neutral to slightly bearish — input coefficients and lithium feed costs outpace product realizations for LFP hydromet, constraining profitability.