China lowers battery scrap import duty to aid recycling sector
The move comes after Beijing first relaxed restrictions on such imports from August
[SINGAPORE] China has lowered import tariffs for some battery scrap in a fresh bid to support its recycling industry.
Among a broad list, the duty on so-called black mass of lithium-ion batteries, a type of scrap material, was reduced to 3 per cent from 6.5 per cent from Jan 1.
“This tariff adjustment can be seen as a policy boost to the lithium-battery recycling industry,” said Edgar Gao, analyst at Sublime China Information’s Fubao department. “It could offer certain benefits to customers who directly import from Europe and the US” but the advantage would be limited as South Korea and South-east Asian nations already face lower tariffs, he said.
The move comes after Beijing first relaxed restrictions on such imports from August, in an effort to supply more feedstock to recyclers grappling with overcapacity and diversify from mined resources. It has allowed in some materials that meet its standards, including from lithium-iron-phosphate batteries and those containing nickel or cobalt.
China dominates the processing of black mass, a dark, powdery cocktail of metals that can be drawn from old electric-vehicle batteries or manufacturing scrap. But, like many industries in the country, recyclers have built too much capacity and utilisation rates are low.
“In theory, the import legalisation and the lowering of tariff rates should boost recycling operation levels, but strict content rules are challenging trade flows,” said Lee Allen, senior strategic markets analyst at pricing agency Fastmarkets. Most black mass in the global market struggles to meet China’s stringent requirements on water-soluble fluoride content, he said.
Black mass, priced based on a percentage of the contained metal value, has seen rising payables into key markets like South Korea over the past year on tight supply and strong demand.
The industry is now increasingly focused on technological development “in order to process black mass sourced from Europe and the US to fit the import standards in China”, Fubao’s Gao said. BLOOMBERG
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