The price of raw materials for power batteries is avalanche! Some companies claim that they have lost all the money they earned last year. Raw materials | prices | companies
In 2022, the soaring prices of raw materials for power batteries have made many power battery recycling companies a big profit. But as we enter 2023, battery prices have fluctuated dramatically and have been falling, which has dealt a blow to some power battery companies.
"The money earned last year has already been lost this year," Liu Wang, the owner of a power battery recycling company, told a reporter from First Financial News that due to a significant drop in battery prices compared to last year, the company has suffered a significant operating loss this year.
Be cautious when receiving goods
"The battery has fallen from a very high price, and everyone can't bear it. The circulation of the lithium battery recycling market is clearly not as active. Although the market has rebounded, they haven't dared to take risks," Liu Wang told reporters.
At present, lithium batteries are the mainstream of new energy power, and power lithium batteries are mainly divided into ternary lithium batteries and lithium iron phosphate batteries, whose raw materials are mainly lithium carbonate. Driven by new energy vehicles, lithium carbonate continues to rise. In 2022, the sales of new energy vehicles have grown rapidly, with a growth rate of nearly 100%, which has led to a significant increase in demand for power batteries. Lithium carbonate accounts for 20% to 30% of the total cost of power batteries, and the price increase of lithium carbonate directly drives the production cost of power batteries to soar. In 2022, the price of battery grade lithium carbonate once reached 600000 yuan/ton. As we enter 2023, the price of battery grade lithium carbonate has been falling all the way, reaching a minimum of 200000 yuan/ton. Recently, the price has rebounded to about 320000 yuan/ton.
"When the price of lithium carbonate was 600000 yuan per ton last year, the recycling price of lithium iron phosphate was 260000 yuan per ton. Currently, the recycling price is around 17000 yuan per ton, and the price difference is basically one-third." Liu Wang said that the price trend is mainly due to the rigid demand in the market. Due to the large fluctuations, the recycling turnover rate has significantly decreased. Even if the current price has rebounded, the overall recycling scale is small, and profits cannot generate high benefits.
Another practitioner of the battery recycling industry told that "at present, China's power battery recycling industry is in its infancy, and the network supervision system for battery recycling is not perfect. On the whole, the layout of capacity for battery recycling, disassembly and cascade utilization is sufficient, but the supply of waste batteries is more than Congee. The recent situation is that the price of battery recycling has risen, but the relevant recycling manufacturers are more cautious in receiving goods, considering the compression of profits from high price acquisitions and the risk of fluctuations in the price of lithium carbonate and other raw materials." Yu Qingjiao, Secretary General of the Zhongguancun New Battery Technology Innovation Alliance and Director General of the Battery Hundred People Association, told reporters that the pricing of battery recycling at this stage is very chaotic, and is greatly affected by the price of upstream raw materials. At present, the price of lithium carbonate and other raw materials is very low The game mood is still heavy, which will naturally increase the wait-and-see mood of recycling enterprises.
Accelerate shuffling
The white paper on the development of China's waste lithium-ion battery recycling, dismantling, and cascading utilization industry, jointly released by research institutions EVTank, Ivy Economic Research Institute, and China Battery Industry Research Institute, shows that the actual recycling volume of waste lithium-ion batteries in China in 2022 was 415000 tons, a year-on-year increase of 75.8%. Against the backdrop of a significant increase in raw material prices, the recycling, dismantling, and cascading utilization industry of waste lithium-ion batteries has shown an explosive growth trend in 2022, with the entire industry market size increasing to 15.44 billion yuan, a year-on-year increase of 182.8%. It is expected that by 2030, the market size of the entire industry will exceed 100 billion yuan.
With the significant increase in prices, the number of registered recycling companies has also increased significantly.
With the increase in the number of power battery enterprises, competition in this field is becoming increasingly fierce, and finding a "source of goods" has become a concern for many enterprises. At the same time, more and more power battery manufacturers and some vehicle manufacturers are starting to establish recycling systems, often choosing large-scale enterprises with formal qualifications to recycle. The reporter learned from multiple industry insiders that for many brands, battery recycling companies often need to obtain the source of goods through bidding. Due to fierce competition, the bidding prices have also been constantly raised. In recent years, many discarded batteries have been scattered in small workshops. This is because they often dismantle batteries by hand in order to save costs, which gives them a larger profit margin and allows them to make profits by purchasing batteries at high prices.
Previously, the recycling channels for legitimate and qualified enterprises were not smooth. Yu consulted and discussed that firstly, due to the limited coverage of enterprise branches, car owners cannot find or are unsure whether the recycling point is legitimate; Secondly, small workshops often advertise "high price recycling, door-to-door recycling" to obtain more waste battery resources. Some power batteries collected through channels such as 4S stores also end up flowing into small workshops. However, due to technical issues, the effective ingredient recovery rate of small workshops is not high, and there is a serious problem of waste pollution. Apart from the issue of recycling channels, the entire power battery recycling market is still in a period of fragmentation, making it difficult to guarantee recycling profits.
"From the layout of listed companies in the relevant industry chain, the current market size of the battery recycling industry is still relatively small, with only a very small number of companies announcing that their battery recycling business has achieved profitability. Overall, the profitability of qualified waste battery recycling manufacturers in the industry chain is still under pressure." Yu Qingjiao told reporters that the sharp fluctuations in raw material prices will definitely accelerate the industry reshuffle, and small workshop enterprises have low risk resistance and high risk of blindly following the trend in investment.
On June 10, Sun Fengchun, academician of the CAE Member, at the 2023 World Power Battery Conference "Power Battery Recycling and Comprehensive Utilization" theme forum, the power battery industry is about to usher in a large-scale retirement period. China's recycling industry is still in the early stages of development, and the construction of recycling system needs to be improved. Sun Fengchun believes that building a top-level system, accelerating the improvement of the system and policy guarantee system, including policy guidance, standard specifications, assessment and supervision, rewards and incentives, can achieve the healthy development of the recycling industry. "Establish a recycling system and strengthen collaboration between upstream and downstream enterprises. The waste battery recycling and utilization industry chain is a closed-loop ecosystem where all participating entities are interconnected, and its efficient operation depends on the effective cooperation of all enterprise entities."
