The power battery recycling market is huge!

The broader market fluctuated widely throughout the day. On the disk, battery recycling was stimulated by the news and became the biggest hot spot in today's market. Nearly 10 stocks in the sector had daily limit, and HJT continued its strong trend yesterday and rose against the trend throughout the day. On the downside, semiconductors, human brain engineering, medicine, games and other directions weakened.

In general, stocks fell more and rose less, with more than 2,700 stocks in the two cities falling. The turnover of Shanghai and Shenzhen stock exchanges was 941.4 billion yuan today, a decrease of 146.7 billion yuan from the previous trading day.

As of the close, the Shanghai Composite Index fell 0.06%, the Shenzhen Component Index fell 0.49%, and the ChiNext Index fell 0.51%. The net purchase of northbound funds was 1.645 billion yuan throughout the day; among them, the net purchase of Shanghai Stock Connect was 3.202 billion yuan, and the net sales of Shenzhen Stock Connect was 1.558 billion yuan.

01The concept of power battery recycling rises against the trend

Today, the concept of power battery recycling rose against the trend. Among the individual stocks, Beyond Technology, Dishengli, and Tianqi shares had the daily limit, Guanghua Technology rose 6.80%, and GEM rose 4.59%.

On the news, Zhang Yunming, Vice Minister of the Ministry of Industry and Information Technology, said in his speech at the "2022 World Power Battery Conference" on July 21 that he would speed up the cultivation of a number of related enterprises for the cascade utilization and recycling of power batteries.

Also at this conference, Zeng Yuqun , chairman of CATL, said that most of the materials in the battery can be reused. At present, the recovery rate of our nickel, cobalt, and manganese has reached 99.3%, and the recovery rate of lithium has reached 90% or above.

In this regard, according to the 21st Century Financial Report, relevant persons from the investment management department of Tianqi Lithium Industry said that lithium recovery in lithium batteries is theoretically possible, but it cannot achieve large-scale recycling and reuse in commercial applications. Regarding the claim that Zeng Yuqun's lithium recovery rate has reached more than 90%, the above-mentioned person said, "The laboratory should be able to do it, but I have not seen it commercially." According to the source, the company now has investments and attempts to participate in downstream (lithium recovery).

In addition, according to the China Securities Journal, the relevant person in charge of Ningde Times responded: "Welcome to Guangdong Bangpu to see advanced mass production technology." According to the data, Guangdong Bangpu Recycling Technology Co., Ltd. was founded in 2005, and Ningde Times is the largest shareholder. , holds 52.87% of the shares, and is mainly engaged in the research and development of resource recycling technology, energy recovery system research and development, and new material technology research and development.

02The market potential of power battery recycling is huge

Although Tianqi Lithium and CATL have different judgments on the recovery rate of power batteries, power battery recycling has indeed received more and more attention.

Sales of new energy vehicles has driven a substantial increase in the demand for installed power batteries. And this brings a potentially huge market that is power battery recycling.

For the potential scale of this market, institutions generally predict that it is expected to grow into a market of hundreds of billions in the future.

Previously, battery raw materials were in short supply and prices had skyrocketed, leading to grabbing high-quality supply and extending the industrial chain as one of the main lines of competition in the industry, while power battery recycling was an “economical” and efficient way to obtain resources.

Tinci Materials has previously disclosed that the recycling business is one of the company's measures to increase supply sources and deal with fluctuations in raw material prices.

GGI data shows that in 2021, the theoretical decommissioning of lithium batteries nationwide will reach 512,000 tons. In the same year, China actually recycled a total of 299,000 tons of used lithium batteries, of which 25.8 tons were used for recycling, which was used for cascade utilization. The battery capacity is 41,000 tons, which further reduces the full life cycle cost of lithium batteries.

Recently, as nickel and cobalt prices have fallen, lithium prices have remained stable. Soochow Securities tracking data shows that the procurement coefficient of waste batteries has increased significantly, and profits have remained stable, higher than the 2021 average.

However, the recycling of power batteries is also difficult at present. The first is that the measure of battery residual is difficult to estimate. At present, there are many definitions for the state of health (soh) of power batteries, including the definition of capacity fading, the definition of remaining cycle time defined by residual discharge, and the definition of internal resistance.

Secondly, the fluctuation of metal prices affects the economics of material recycling: fluctuations in metal prices ultimately determine the profit and loss of the power battery recycling market, and metal prices are affected by comprehensive factors such as resource supply, technological progress and downstream markets.

03Cascade utilization and dismantling and recycling of power batteries

Regarding the recycling and utilization of power batteries, there are currently two methods recognized by the industry: one is cascade utilization; the other is dismantling and recycling. Both approaches have certain technical thresholds.

There is an unwritten rule in the lithium battery industry that the capacity of the power battery pack should be eliminated and replaced when the capacity decays to 80%. Although the power battery is no longer suitable for the car at this time, it can still exert "waste heat" in other aspects.

The recycling mode of cascade utilization is actually very easy to understand, just like the old slogan said, "If the remote control car is removed, the remote control can still be used." This essentially extends battery life by shifting demand.

Generally speaking, when the capacity of the power battery decays to below 80%-70% of the rated capacity, it is no longer suitable for electric vehicles . However, the range of 80%-20% is the blue ocean for the cascade utilization of power batteries, which can still meet the energy storage or power demand in many scenarios. It must be scrapped only when the capacity drops to 20%.

Dismantling recycling mainly includes wet recycling and physical recycling. Wet recycling has lower requirements for equipment, but requires chemical solvent extraction such as sulfuric acid and ion exchange, so environmental protection requirements are higher. Physical recycling includes processes such as automatic dismantling and recycling and re-manufacturing, and valuable products such as positive electrode powder and negative electrode powder can be obtained, and their economic value is relatively high.

However, the power batteries retired from electric vehicles are not uniform due to the actual situation. Some are ternary lithium batteries, some are lithium iron phosphates , and some are cellular batteries. The specific structures are different, and many factors such as performance and safety are often required to be evaluated. Detection, so as to disassemble and reorganize retired power batteries according to different purposes

Finally, it should be pointed out that in fact, cascade utilization and dismantling and recycling are not separated.