“If you’re in the recycling market, you’re playing the long game. You can’t be short-term focused,” Ethridge said.
Tanking prices for raw materials have been hurting payables for black mass (shredded and sorted battery packs). Adverse economic conditions in regions such as Europe and battery fires at certain recycling facilities also create a challenging environment, Fastmarkets understands.
But long-term opportunities in this business are clear and remain exciting, Ethridge said.
“I think all these [factors] are very volatile, very dynamic, and I don’t think the need for recycling is going to waver or go away, [the recycling industry] just needs to be able to ride out the waves along the way,” he said.
Ecobat is itself an example of a firm that has had to adapt to a changing environment to survive. The company traces its roots back more than 100 years, primarily in the lead and lead-acid battery recycling market.
Ethridge said he aims to develop a global and best-in-class lithium-ion battery recycling operation, building off of Ecobat’s lead operations.
Ecobat commissions black mass-producing plants in Hettstedt, Germany; Darlaston, England; and Casa Grande in the US state of Arizona, Ethridge told Fastmarkets.
Machines are operational at the German plant, and units in the US and the UK will ramp up from early 2024, he added.
“We’re convinced that lead [acid batteries] will be around for a long time to come because there’s a lot of utility still to be garnered from lead and lead markets,” Ethridge said.
“We also recognize that lithium batteries are well poised to serve new markets,” he added. “There is a synergy between what we’ve done in the past and what we will do in the future.”
Expertise in the lead-acid battery recycling market has given Ecobat transferrable advantages such as vast logistical knowledge and contacts, according to Ethridge. This would allow the company to move materials effectively across borders, boundaries and jurisdictions, he said.
Although Ecobat invested in plants that recycle lithium-ion batteries, the company has no plans to build hydrometallurgical post-treatment units, which are designed to recycle battery salts from a black mass input.
Instead, Ecobat intends to excel at producing black mass, according to Ethridge.
“The wheel doesn’t work if all its portions aren’t there. So, while there is a lot of investment and a lot of technology into the hydrometallurgical and pyrometallurgical sector, those can’t function without the first two pieces – which are safe material recovery from the market followed by the creation of well-beneficiated black mass,” Ethridge said.
Other major Europe-based companies – such as chemicals supplier BASF, minerals firm Eramet and nuclear fuel firm Orano – have begun building and developing hydromet facilities in the region. Finland’s Fortum and Belgium’s Umicore have operated hydromet facilities in Europe for a longer time.
With these new investments, black mass supply-demand dynamics are expected to change in the coming years; Europe’s current supply of black mass far outweighs the capability of local hydromet and pyromet facilities to process the available material, Fastmarkets understands.
“I believe we’re going to see multiple large-scale hydromets start commissioning in 2030, and by 2035 they’ll be optimized. I think we’re going to see a lot of capacity come online very quickly, as it’s a bit of an arms race right now, with the market becoming aware that this could be potentially a very valuable [business],” Ethridge said.
But there is no guarantee that all proposed projects will be completed.
Certain lithium-ion battery-linked projects have been scrapped or delayed – for example, major recycler Li-Cycle has faced difficulties in the US and Europe.
Payables for black mass were much lower in Europe than in Asia due to an imbalance of material in Europe, sources said.
Fastmarkets’ assessment for black mass, NCM/NCA, payable indicator, nickel, domestic, exw Europe, % payable LME Nickel cash official price and black mass, NCM/NCA, payable indicator, cobalt, domestic, exw Europe, % payable Fastmarkets’ standard-grade cobalt price (low-end) were at 50-55% on Wednesday January 3, both unchanged week on week.
But deals were heard into South Korea for NCM black mass at payables as high as 72% CIF for nickel and cobalt including the value of lithium, equivalent to around 70% without the value of lithium.
EU black mass producers have been debating the regulatory status of the material within the region.
Li-Cycle’s Elewout Depicker previously said he believes that all black mass will be classified as hazardous by EU authorities beginning summer 2024. This would mean that export trade routes for EU black mass to non-OECD nations – including Indonesia and Malaysia – may be closed, he added.
This would leave EU black mass generators with fewer options of where they can sell their material, making them more dependent on the still-developing local market, Fastmarkets understands.
“If we are doing this, are we creating a positive environment for competition? Or instead of sending black mass overseas, now overseas players come to us, and we have a lot of highly funded, highly capable firms competing with us?” Ethridge said, adding that “Ecobat is ready to adapt with the market as needed.”
If EU black mass cannot be exported to non-OECD nations, and exports to the OECD through Basel Convention procedures remain slow and cumbersome, then some companies may look to store their material until sunnier times come, Ethridge said – but storage of hazardous waste for longer than six months is illegal in the EU.
“If you can’t export the material, but you also don’t have the capacity to properly refine it, you create a bottleneck that you’ll have to deal with, and that might actually incentivize companies to reclassify the material and not report it correctly. A bottleneck has the potential to create negative incentive structures,” he said.
The current recycling market for lithium-ion batteries has many challenges and uncertainties, but Ethridge reaffirmed his focus on the long term.
One key method of ensuring a strong long-term future for Ecobat is developing partnerships across the battery value chain, according to Ethridge.
“I think the winners in this game are going to be folks who are not acting purely opportunistically, but in fact developing partnerships for the long term, upstream and downstream, and making good-quality products so that they are reliable for their partners,” he said.
Keep up to date with global market insights and predictions for the battery recycling market with the Fastmarkets NewGen Battery Recycling Outlook.