China Lithium-Ion Battery Recycling Market: Tight Supply Meets Cautious Buying

May 2026 Market Intelligence Update

China’s lithium-ion battery recycling market entered May with a clear upward price bias, driven by stronger lithium and nickel salt prices, tight availability of recyclable feedstock, and a growing mismatch between seller expectations and downstream buying appetite.

According to the latest market data, prices for waste lithium-ion batteries and black mass increased during the week, although overall market activity remained moderate. The market is not moving because of broad-based demand acceleration alone. Instead, the current price movement reflects a more complex balance: upstream raw material strength, limited spot availability, cautious hydrometallurgical purchasing, and chemistry-specific differences between LFP, NCM and LCO scrap.

For recyclers, OEMs, collectors, traders and processors, the signal is clear: battery scrap and black mass are becoming increasingly strategic materials, not simply waste streams.
China’s battery recycling market is showing a supply-driven price increase.

The strongest movement was seen in LFP black mass, where prices rose by 9.47% week-on-week, supported by the stronger correlation between LFP scrap and lithium carbonate prices. NCM black mass also increased, rising 4.15% week-on-week, while LCO black mass posted a more moderate gain of 1.51%.

At the same time, hydrometallurgical refiners appear cautious. Many had built inventories ahead of the Labor Day holiday and are now placing smaller, need-based orders. This has created a tug-of-war: sellers are holding stock in expectation of higher prices, while buyers are resisting elevated offers.

This is especially relevant for Europe. As the EU Battery Regulation increases pressure on recycled content, traceability, collection, recycling efficiency and material recovery, global competition for quality black mass and battery scrap is likely to intensify. The Regulation covers the entire battery lifecycle, including carbon footprint, recycled content, removability, labelling, digital battery passport, EPR, collection and recovery targets.

1. Black Mass Prices: LFP Leads the Weekly Momentum

The most notable market signal is the difference between chemistries.

NCM black mass reached 72,000 yuan/tonne, up 4.15% week-on-week.
LCO black mass reached 129,400 yuan/tonne, up 1.51% week-on-week.
LFP black mass reached 31,635 yuan/tonne, up 9.47% week-on-week.

The stronger movement in LFP reflects the tightening link between LFP scrap pricing and lithium salt prices. Unlike NCM and LCO, where nickel and cobalt payables play a central role, LFP scrap economics are more directly exposed to lithium carbonate dynamics.

This matters because LFP is becoming increasingly important in global black mass flows. Fastmarkets has previously highlighted that NCM and LFP together represent the majority of global black mass production, with LFP expected to increase its share over time.

2. Supply Side: Sellers Are Bullish and Holding Inventory

The current price movement is being reinforced by tight scrap supply.

For ternary battery scrap, retired batteries remain the main source of circulating material. Crushing plants are actively purchasing feedstock for processing, which supports demand for available NCM and related scrap streams.

For LFP scrap, the market appears more constrained. Processing volumes have decreased, and the majority of available material is coming from manufacturing scrap rather than retired batteries. This limited EoL contribution reduces spot flexibility and strengthens seller confidence.

The result is a market where holders are increasingly reluctant to sell at current levels. Many expect further price support from upstream metals and are therefore holding inventory, reducing liquidity in the spot market.

3. Demand Side: Hydromet Refineries Are Buying Carefully

Despite rising prices, downstream demand is not aggressive.

Hydrometallurgical refineries reportedly built sufficient inventories before the Labor Day holiday. As a result, many buyers are limiting purchases to small, need-based orders. Their acceptance of higher prices remains low.

This is an important distinction. The market is not experiencing a simple demand boom. Instead, it is facing a temporary imbalance between limited available supply and cautious but persistent downstream demand.

For black mass suppliers, this creates an opportunity to capture value. For refiners, it increases procurement risk. For OEMs and producers, it reinforces the need to secure long-term, traceable and compliant recycling channels.

4. Recycling Volumes: April Data Shows Strong Monthly Growth

April 2026 data shows a positive trend in China’s recycling activity.

Estimated retired power battery volume reached 78 kt, up 2.6% month-on-month.

By black mass type:

LFP black mass: 18.5 kt, up 64.7% MoM
NCM black mass: 15.7 kt, up 47.3% MoM
LCO black mass: 2.0 kt, up 63.0% MoM

Recovered materials also increased:

Nickel: 3.6 kt, up 20.5% MoM
Cobalt: 1.6 kt, up 72.5% MoM
Lithium salts: 8.2 kt, up 61.0% MoM

The sharp increase in lithium salts recovered from scrap is particularly relevant. It confirms the growing strategic importance of lithium recovery, especially as LFP volumes expand and lithium remains central to battery material circularity.

5. Strategic Interpretation: Black Mass Is Moving from Waste to Critical Feedstock

The China market update confirms a broader structural trend: battery recycling is becoming a critical raw materials business.

Globally, battery scrap supply is expected to grow significantly over the coming decade. Fastmarkets has forecast a six-fold increase in total battery scrap from 2023 to 2033, with end-of-life batteries becoming the main source of scrap from 2032.

This shift will change the competitive landscape. Today, production scrap still plays a major role. Over time, end-of-life batteries will become the strategic battleground, especially for recyclers with strong logistics, safety, dismantling, pre-treatment, traceability and cross-border compliance capabilities.

For Revive Batteries, this aligns directly with our positioning: building circular battery value chains through smart reverse logistics, safe handling, traceable downstream processing and tailored recycling solutions.

Revive’s own website structure highlights key service areas such as end-to-end logistics, regulatory compliance, secure storage, international shipments, black mass value recovery and partnerships with trusted hydrometallurgical recyclers.

6. Europe Implications: Why China’s Market Signals Matter

China remains one of the most active and liquid markets for battery scrap and black mass. Price movements there often provide early signals for global recyclers and European market participants.

For Europe, the implications are significant:

First, stronger Asian pricing can attract material flows toward international buyers, especially when European recyclers are still scaling capacity.

Second, rising LFP scrap values may change collection economics. Historically, LFP was often less attractive than nickel- and cobalt-rich chemistries. Stronger lithium prices can improve the business case for LFP collection and processing.

Third, EU regulation will increase demand for verified recycled materials. The EU Battery Regulation introduces requirements linked to recycled content, collection, material recovery, recycling efficiency, battery passport, labelling, carbon footprint and due diligence.

Fourth, safety and compliance will become a competitive advantage. Lithium-ion battery recycling involves complex risks, including fire, explosion, hazardous transport, and variable input streams. Industry presentations on mechanical processing stress the importance of ATEX zoning, ignition source assessment and explosion protection documentation.

7. Market Outlook: What to Watch Next

Over the coming weeks, the market should be watched through five indicators.

Lithium carbonate prices will remain the most important driver for LFP scrap.

Nickel salt prices will continue to influence NCM black mass valuation.

Hydromet refinery inventories will determine whether buyers return more aggressively to the market.

Retired battery availability will shape ternary scrap liquidity.

Seller behaviour will remain decisive. If holders continue to withhold material, spot prices could remain supported even with moderate downstream demand.

The key risk is volatility. If upstream metal prices soften or refiners delay purchases further, the recent upward movement could lose momentum. However, if lithium and nickel remain firm, and scrap supply stays tight, sellers may continue to push for higher payables.

Revive Batteries View

The latest China market data reinforces three strategic conclusions.

Battery scrap is no longer a low-value waste stream. It is becoming a competitive source of lithium, nickel, cobalt, copper, graphite and other strategic materials.

Traceability and compliance will define market access. As regulators, OEMs and downstream refiners demand better documentation, informal flows will face growing pressure.

LFP recycling is becoming more attractive. Strong lithium-linked pricing and increasing LFP volumes make this chemistry increasingly relevant for recyclers, collectors and second-life operators.

For OEMs, producers, collectors and industrial battery holders, the priority is to secure reliable recycling partners before market tightness becomes structural.

Revive Batteries supports partners across the battery lifecycle, from collection and reverse logistics to second-life evaluation, safe recycling routes, black mass valorisation and regulatory-compliant downstream processing.

Need support with lithium-ion battery recycling, black mass valorisation or cross-border battery waste logistics?
Contact Revive Batteries to build a safe, compliant and traceable circular solution for your battery materials.