Supply Chain: Recycling & Secondary Markets

How Can LFP Recycling Be Profitable?

Source: Content & analysis provided by CRU Group Distinguished Partner), Worley.

The material content value of LFP is fundamentally less than that of NMC. This poses a complex technical and commercial challenge for recycling as LFP adoption grows globally.

LFP recycling in China is not so much an issue, despite popular belief, as capex and opex are low, black mass feedstock is abundant, recovery rates are higher for some recyclers, and many companies operate on tolling arrangements.

However, profitability is especially precarious for operations overseas such as in Europe.

Technical innovation can mitigate costs and are becoming the key differentiator for recyclers in this cost-sensitive market. But this only goes so far - feedstock costs (black mass and reagents) and revenue (lithium prices) remain the determining factors.

The path forward may lie in the market increasingly moving towards closed-loop arrangements to eliminate recyclersʼ feedstock costs.

Policies are increasingly being enacted to encourage/require LFP recycling take place and/or put the burden of recycling on the OEM.

Extracted from the PDF; charts and images may read imperfectly.