(Yicai Global) June 13 -- The earnings performance of some battery recycling firms looks set to suffer this year as the market goes off the boil amid falling battery prices.

“The lithium battery recycling market is not as hot as before,” the owner of a company that reclaims materials from spent power batteries told Yicai Global. “Because of the slump in battery prices, the money we earned last year has been lost this year.”

New energy vehicle sales nearly doubled in 2022, boosting the prices of battery raw materials. Battery-grade lithium carbonate soared to CNY600,000 (USD83,940) a ton last year, but fell to as low as CNY200,000 a ton this year. It recently rebounded to about CNY320,000.

“When the price of lithium carbonate was CNY600,000 a ton, the recycling price of lithium iron phosphate was CNY26,000 (USD3,640) a ton,” the business owner noted, adding that the recycling price is about CNY17,000 now.

The overall scale of recycling is also small this year and will not bring about much benefit even if there is a profit to be made, the person pointed out.

Battery recycling is not well regulated and is much affected by the price of upstream raw materials, Yu Qingjiao, secretary-general of Zhongguancun New Battery Technology Innovation Alliance, told Yicai Global. Fluctuations in lithium carbonate prices are still considerable, which naturally aggravates the wait-and-see attitude of recycling companies, Yu added.

“Although the market has recovered to some extent, we dare not take risks,” the company owner concurred.

The sharp fluctuation in raw material prices will accelerate the reshuffle in China’s recycling industry, Yu said.

China's recycled 415,000 tons of waste lithium-ion batteries last year, up nearly 76 percent from 2021, according to data from the China Battery Industry Research Institute. With the sharp rise in raw material prices, the recycling market grew 183 percent to CNY15.4 billion (USD2.2 billion) and may exceed CNY100 billion (USD14 billion) by 2030.

Editor: Futura Costaglione