Author: Lin Chunting

The waste power battery recycling market is quietly changing.

"Less than two months after returning from the Spring Festival, I found that the industry was not working. Last year, when the market was good, I could earn an average of 20,000 yuan a month, but last month I only earned 45,000 yuan. Recently, Guo Wei, a battery recycling "self-employed", said in an interview with the first financial reporter.

The reason, he believes, is that the current acquisition manufacturers are unwilling to buy, and the other is that people who have goods are unwilling to sell.

Guo Wei was originally a rider on a food delivery platform, and in 2021, he began to buy unloaded batteries from riders and sell them to small workshops that bought used batteries.

Zhu Delei, Guo Wei's upstream buyer, runs a small used battery workshop in Dongguan and has an acquisition site in Guangzhou. In an interview with the first financial reporter, he further explained that affected by the sharp "killing" of the price of battery-grade lithium carbonate (hereinafter referred to as "lithium carbonate") in the lithium battery industry chain, qualified waste battery recycling manufacturers dare not easily accept the goods, and those with waste battery sources dislike the current purchase price is too low and are unwilling to sell, and as a result, there is a spectacle of almost "no sale".

According to data released by Shanghai Steel Union, the quotation of some lithium battery materials fell on March 3, and battery-grade lithium carbonate fell by 30,7500 yuan / ton, with an average price of 25,65 yuan / ton. This is more than half of the peak of nearly 11,60 yuan / ton in November last year, and the decline rate is faster than most market forecasts.

It is worth noting that with the current overcapacity of lithium carbonate and the production of new batteries by related energy storage battery manufacturers, energy storage to a certain extent reduces the need for recycling and reuse of waste batteries.

In this case, some insiders analyzed that the profit space of waste power battery recycling enterprises shrinks, especially the waste batteries purchased at high prices in the early stage will directly lead to losses for related manufacturers, and a number of small workshops and small and medium-sized enterprises will be eliminated in this reshuffle.

The market has changed dramatically

At first, Guo Wei regarded recycling used batteries as a part-time job, "earning thousands of yuan a month."

By the beginning of 2022, he found that the purchase price of used batteries was rising. "Taking waste ternary lithium batteries as an example, in 2021, the price of one (cell) sold to the waste collection station is less than one dollar. But in 2022, the price rose to more than 1 and then to more than 3. ”

Seeing the lucrative profits of recycling used batteries, he invested more time and effort, and the scope of acquisitions expanded from fellow riders to dealerships and other areas. Slowly, the income he obtained by acquiring used batteries changed from a monthly income of several thousand yuan to about 20,000 yuan a month, which is twice the monthly income of a rider.

2022 is the hottest year in the history of the used battery recycling industry. This year, Guo Wei found that many riders also participated in the army of waste battery acquisition, and some riders even quit their jobs to do the acquisition full-time.

Zhu Delei said: "Last year, we bought an average of 30 tons of waste batteries every month, and we could sell them the same day. ”

Behind the sharp increase in the income of "retail investors" such as Guo Wei's acquisition of waste batteries is the rapid growth of new energy vehicles in recent years. But this year their business suddenly went bad.

Guo Wei found that those who had the goods were unwilling to sell, and those who received the goods were unwilling to buy. These days, because he can't receive the goods and can't sell them, he can only put all his energy back on delivering meals as before. He noticed that some riders around him, who had also worked part-time as recycling used batteries, had returned to their main business, and some people who had quit their job as riders before began to return to their old jobs.

This ups and downs are associated with the sharp volatility of the market.

At present, lithium battery is the mainstream of new energy power, power lithium battery is mainly divided into ternary lithium battery and lithium iron phosphate battery, their raw materials are mainly lithium carbonate. Driven by new energy vehicles, lithium carbonate continues to rise. Lithium carbonate accounts for 20% to 30% of the total cost of power batteries, and the rise in lithium carbonate prices directly promotes the soaring production cost of power batteries. From 2020 to the fourth quarter of 2022, the maximum price range of lithium carbonate increased by as much as 12 times, and the current price is a reduction compared with the highest price.

Nowadays, the waste battery recycling industry is popular with such a saying: "ternary lithium battery, three yuan becomes one." Zhu Delei explained to the first financial reporter that in 2022, the price of a battery cell of a waste ternary lithium battery is 3 yuan, but now it is completely reversed and becomes 1 yuan.

According to his introduction, last year, a ton of waste ternary lithium battery, he bought from Guo Wei and many other retail investors and car dealers at a price of 58000,6 yuan / ton, and finally sold it to qualified chemical plants or echelon utilization plants at a price of more than 2000,<> yuan / ton, with an average profit of at least <>,<> yuan per ton.

According to this calculation, he bought an average of 30 tons of such waste batteries per month last year, earning at least 6,2 yuan a month. But now, the price of a ton of waste ternary lithium batteries has fallen to more than <>,<> yuan / ton, which is "unprofitable".

"This month, we only received 1 tonne of goods. This market, according to the current price to receive the goods, people will feel that you are pit people, definitely not willing to sell to you. Zhu Delei told the first financial reporter, "At the same time, we dare not receive the goods, the market is a price a day, every day is falling, today it fell 500 yuan (per ton)." If you collect it today, you may lose money tomorrow, and many small workshops like ours are currently closed. ”

He added: "If you take it back at a price like the current one, you may not be able to sell it in the end, because many large waste battery factories are now in a state of shutdown." Last year, when the market was good, I dared to collect the profit with a fluctuation space of 2000,5000 yuan / ton, but now the profit has a fluctuation space of <>,<> yuan / ton. ”

At present, Zhu Delei's "small workshop" in Dongguan has been suspended for more than half a month, and he laughs at himself that this is "lying flat" and also "taking a holiday", and "many 'small workshops' in the surrounding area are like this".

Another "small workshop" owner told the first financial reporter that his company collapsed because it acquired more waste batteries in the early stage, and finally could only sell them to qualified large-scale waste battery recycling companies at ultra-low prices. "Lost some money," so he stopped doing it last month.

The relevant person in charge of a large waste battery enterprise in Guangdong also confirmed Zhu Delei's above statement to the first financial reporter. The person in charge said: "(Market) prices are falling every day, and now (the company) is no longer offering. In addition to the old customers, we will no longer acquire used batteries from other customers. ”

It's not just about price changes

Some of the batteries originally purchased by Zhu Delei were sold to waste battery echelon utilization manufacturers, who were selected and processed and then sold to relevant energy storage companies as batteries for energy storage power stations and related energy storage products.

Generally speaking, when the performance of the power battery drops to 70% to 80%, it is no longer satisfied with providing power for new energy vehicles, and then enters the recycling stage, and the recycling treatment methods mainly include cascade utilization and dismantling. Among them, cascade utilization is to properly repair and unify the standards of waste batteries with high residual capacity and overall use needs, and use them in areas with low energy requirements, such as energy storage, communication base station backup power supply, low-speed electric vehicles, and electric forklifts; Dismantling is to recover lithium, nickel, cobalt, manganese and other metals in the battery through process technology, as raw materials for production, which can not only relieve resource pressure, but also recycle and reduce production costs.

In 2022, the energy storage industry is also developing rapidly, and the demand for waste batteries that can be used for echelon utilization has increased greatly. The first financial reporter found through Tianyan inspection that since January 2022, 1,4 new energy storage-related companies have been added.

From the perspective of the geographical distribution of newly registered enterprises, Guangdong ranks first in the region with more than 4630,3570; Jiangsu and Beijing ranked second and third, with more than 3240,<> and <>,<> respectively.

Also in 2022, there are multiple tens of billions of investment projects involving energy storage. Among them, Sunwoda (300207.SZ) plans to spend 213.50 billion yuan in Yiwu for 300750GWh of power battery and energy storage battery production capacity projects. Similar investors in 300014-billion-level projects include CATL (<>.SZ), EVE Lithium Energy (<>.SZ), Haichen Energy Storage, Lishen Battery, Baofeng Group and so on.

But the use of energy storage for echeloned batteries is also changing. The first financial reporter learned in the interview that at present, as more and more companies enter the field of energy storage and begin to produce new batteries as batteries for energy storage power stations and related energy storage products, thereby reducing the echelon utilization of waste batteries.

"New batteries [for our energy storage system]." A relevant person in charge of Shenzhen BAK Power Battery Co., Ltd. (hereinafter referred to as "BAK Battery") told the first financial reporter in an interview that the industry is relatively cautious about the echelon utilization of waste batteries, because it involves environmental protection issues.

As one of the top ten domestic power battery manufacturers, BAK Battery is accelerating the layout of new energy storage. At the beginning of last year, the Fuzhou production base of BAK Battery, with a total investment of 24.<> billion yuan, was completed and put into operation, providing customers with integrated delivery of battery modules, energy storage systems, container energy storage systems and other solutions at all levels.

In addition to environmental protection problems, echelon utilization batteries also have the problem of insufficient performance instability. The relevant person in charge of an energy storage system manufacturer in Guangdong said in an interview with the first financial reporter that the company's energy storage system has used echelon utilization batteries, but due to the uneven quality of the batteries, the maintenance costs of the system in the later stage have increased significantly, directly affecting the economic benefits of the energy storage power station.

"Later, the customer told us that in the future, only the energy storage system of the new battery was needed." The person in charge explained to reporters with the example of an energy storage power station that the cost of an energy storage power station using a new battery is relatively high, but considering that the return period of the energy storage power station is relatively long, it is more cost-effective to use a new battery than an echelon utilization battery. "Since the beginning of this year, we have no longer purchased batteries from waste battery echelon utilization manufacturers, but from new energy storage battery manufacturers."

In addition, the echelon utilization of batteries also has safety risks. To this end, on March 3, the National Energy Administration issued a notice on the issuance of the "Twenty-five Key Requirements for the Prevention of Power Production Accidents (24 Edition)", which states: "The sites of electrochemical energy storage power stations on the power generation side and the grid side should not be adjacent to or set up in places where flammable and explosive dangerous goods are produced, stored, and operated... Large-scale energy storage power stations should use batteries with mature technology and high safety performance, and carefully select echelon utilization power batteries. ”

At the local level, on March 3, the Beijing Municipal Urban Management Commission issued the Notice on Public Solicitation of Proposed Projects for New Energy Storage Power Stations in the Middle and Late Stages of the 14th Five-Year Plan, which clearly stated that "new energy storage power station projects... Echelon utilization power batteries shall not be used".

"In the future, most energy storage power stations will use new batteries." The relevant person in charge of the above-mentioned Guangdong energy storage system manufacturer said.

More monks and less porridge

The industry generally believes that the average service life of new energy vehicle power batteries is 5~8 years, according to this calculation, China is ushering in the peak period of the first batch of retired power batteries.

Zhu Delei's small workshop was set up in early 2022 and currently has seven or eight employees, including himself. "I'm the boss and the employee." He said with a smile.

In the past year, related companies have sprung up. Tianyan inspection shows that there are currently more than 7,3 enterprises whose business scope includes "battery recycling" across the country, of which about 2022,3 were established in 6. Before 2018, there were only about 6000,<> related companies. This is both related to the rising price of lithium carbonate last year to make the industry profitable, and also related to the imminent retirement of a batch of power batteries in the future.

According to data from the China Automotive Technology and Research Center, the cumulative retirement of domestic power batteries exceeded 2021,32 tons in 2025 and will increase to 78,<> tons in <>.

East Asia Qianhai Securities said in a research report that by 2030, the total scale of power batteries that need to be recycled will reach 237.84 million tons, including 153,<> tons of ternary lithium batteries and <>.<> million tons of lithium iron phosphate batteries, and the power battery recycling market space will exceed <> billion yuan.

However, in the face of 7,3 enterprises involved in "battery recycling", such a market supply is quite limited, and finally presents a situation of "more monks and less porridge".

Taking Grammy (002340.SZ), one of the giants of the waste recycling industry, as an example, its power battery recycling capacity is designed with a total dismantling and processing capacity of 21,5 tons per year. However, Grammy said that the national power battery retirement volume in 2022 will be about 20,<> tons. In other words, all the decommissioned power batteries in the country last year were not enough for the company's production line to digest.

According to Grammy's financial report, in the first three quarters of 2022, the company has recycled more than 1,2 tons of power batteries, and is expected to recover more than 2,<> tons of retired power battery packs (excluding waste) throughout the year.

At the same time, the head effect of the waste battery recycling industry continues to be prominent. For example, in May 2022, Huayou Cycle, a subsidiary of Huayou Cobalt (5.SH), cooperated with BMW Group to build a closed-loop recycling and echelon utilization project for power battery materials; On January 603799, 2023, CATL announced that it plans to build a production base with 1,30 tons of waste battery materials recycling and corresponding positive and negative electrode materials for 238.50 billion yuan; On February 2023, 2, Tianqi Co., Ltd. (8.SZ) announced that it has established a joint venture with Hive Energy to build a new hydrometallurgical project for the recycling and utilization of waste lithium iron phosphate batteries.

Since 2018, the Ministry of Industry and Information Technology has announced four batches of "New Energy Vehicle Waste Power Battery Comprehensive Utilization Industry Specification Conditions" enterprise list, commonly known as the "white list" in the industry, with more than 80 enterprises selected. "Backbone enterprises and large enterprises are in it." Wang Jingzhong, vice chairman of the China Battery Industry Association, said in an interview with the first financial reporter.

To enter the "white list", at least more than 50 review conditions need to be met, and it is also necessary to ensure that environmental protection and safety facilities are complete, and even there are mandatory rules in warehousing, transportation, etc.

"Especially small workshops, it is certain that they will be eliminated in the future." Wang Jingzhong explained to the first financial reporter that first of all, in terms of policy, the state pays more and more attention to the waste battery recycling industry, and will further regulate and restrict it in the future, the competition will be fierce, and it will be eliminated if it does not meet the standard; Secondly, in terms of economic benefits, as the recycling price of waste batteries continues to decline and profit margins continue to shrink, many small and medium-sized enterprises will take the initiative to choose to withdraw.

In terms of technology, Wang Jingzhong said that the technology and equipment of large enterprises are relatively advanced, and it is completely possible to process waste batteries and achieve a recovery rate of 90%. As for the technology and equipment of MSMEs, it may not be up to it.

According to his introduction, at present, there are more than 80 "whitelist" enterprises in the country, and there are "locations in the east, west, south and north" of the country. As for the current flow of at least half of the waste batteries into small and medium-sized enterprises, the market presents a small, scattered and chaotic situation, because the entire industrial chain has not completely formed a closed recycling channel.

After the industrial chain is closed, the amount of waste battery recycling will accelerate to the "regular army" in the above "white list", and it will be difficult for small and medium-sized enterprises to receive waste batteries at that time. In his opinion, this point in time will come "in three or five years".

As a part-time recycler of used batteries, Guo Wei does not know this. But in his opinion, those days of earning 20,000 a month by buying used batteries are probably gone.

(Guo Wei and Zhu Delei are pseudonyms in the article)