China Cuts Tariff on Battery Black Mass Imports Starting Jan. 1
This article first appeared on GuruFocus.
China has lowered import tariffs on certain battery scrap materials as part of a renewed effort to support its lithium-battery recycling industry, with the duty on so-called black mass from lithium-ion batteries cut to 3% from 6.5% starting Jan. 1. Edgar Gao of Sublime China Information Co.’s Fubao department said the move can be viewed as a policy boost for recyclers and could offer some benefit to customers importing directly from Europe and the US, although the advantage may be limited given that South Korea and Southeast Asian countries already face lower tariff rates.
The adjustment follows Beijing’s earlier decision in August to relax restrictions on some battery-scrap imports in order to increase feedstock availability for recyclers dealing with overcapacity and to reduce reliance on mined resources. Authorities have permitted certain materials that meet domestic standards, including scrap from lithium-iron-phosphate batteries and those containing nickel or cobalt. China already dominates global black-mass processing, but utilization rates remain low after years of aggressive capacity expansion.
Market participants suggest the policy change could, in theory, support higher recycling activity, though operational constraints remain significant. Lee Allen of Fastmarkets noted that strict content requirements, particularly around water-soluble fluoride levels, continue to limit trade flows, with much of the global black-mass supply failing to meet China’s standards. With payables rising in markets such as South Korea amid tight supply and firm demand, industry focus is increasingly shifting toward technological upgrades that could allow material from Europe and the US to meet Chinese import rules, a trend that could eventually influence cost structures across the electric-vehicle supply chain, including players like Tesla (NASDAQ:TSLA).
