Lead recycling industry: drivers, challenges and future opportunities

The lead recycling industry refers to the economic activities that specifically recover and reuse lead from discarded lead products or scrap lead materials. Lead is extracted through physical, chemical, or smelting methods and used to produce recycled lead or lead alloys. The development of the lead recycling industry not only helps reduce resource waste and environmental pollution but also meets the needs of lead and its alloys in various industrial and commercial applications, promoting sustainable development and resource recycling.

Key Drivers of Recycled Lead Market

In 2023, China is projected to account for over 50% of total lead output. Despite achieving rapid growth in recycled lead production in recent years, the proportion of recycled lead in overall production still lags significantly behind that of developed nations. For instance, in the United States, recycled lead constitutes more than 92% of total production, while Europe surpasses 80%. This discrepancy underscores the immense potential for development and growth within China’s recycled lead industry. By adopting advanced international practices and enhancing technical capabilities and management efficiency, the country is poised to further narrow this gap and achieve quality advancements. The surge in electric vehicles and electric two-wheelers has spurred an increased demand for lead batteries, highlighting the vital necessity for the recycling and reuse of used batteries. As the electric vehicle market continues to expand, the lead recycling sector is confronting significant market demand and growth opportunities, serving as a crucial catalyst for industry progression. The global emphasis on environmental protection is escalating, with stringent regulations and supportive policies from governments—such as limiting new lead mining and encouraging the recycling of waste resources—creating a favorable policy landscape and market prospects for the lead recycling industry.

Major Obstacles to the Recycled Lead Market

As numerous recycled lead facilities across China commence operations, the demand for used batteries continues to rise, widening the gap between supply and demand. The prevalence of recycling bidding models along with heightened recycling prices for used batteries presents challenges for the market. The influx of new production capacities for both primary and recycled lead places additional pressure on the recycled lead market. Companies are now operating in a highly competitive landscape while simultaneously facing challenges in cost control. The shifting supply-demand dynamics, alongside elevated raw material costs for recycled lead, have constrained profit margins across the industry. Consequently, the gross profit margins for many enterprises have seen a notable decline. Moreover, informal recycling channels often circumvent the formal processes, lacking the necessary investments in infrastructure and equipment. Many smaller workshops engaged in unregulated lead smelting typically dismantle used lead-acid batteries, extracting lead plates with high residual value while irresponsibly dumping harmful waste directly into soil or waterways, thereby jeopardizing both human health and environmental safety.

Development Opportunities for Lead Recycling Industry

Waste lead-acid batteries are composed of approximately 74% lead plates, 20% sulfuric acid, and 6% plastic. Leveraging advanced technologies can achieve an impressive reuse rate of up to 98%, rendering lead-acid battery recycling highly lucrative. A number of domestic lead-acid battery manufacturers are prioritizing establishment in this sector. Chaowei Group, for example, has partnered with Jinyang Company to standardize the recycling processes and channels for used batteries, aiming for seamless industrial chain integration. Through a focus on technological developments, Chaowei Group is also pioneering energy-efficient and eco-friendly innovations like "Atomic Economic Lead Recycling." Similarly, Narada Power acquisition of a controlling interest in Huabo Technology pushes forward its lead recycling ambitions. With other companies such as Tianneng Group also making strides in the lead-acid battery recycling domain, these entities are optimizing sales networks and innovating technologies to establish efficient lead recycling and distribution channels, facilitating resource recovery and enhancing environmental benefits. The government's supportive environmental policies are progressively expanding market opportunities. Notably, the "Interim Measures for the Management of Lead-Acid Battery Recycling and Utilization (Draft for Comments)" published in 2019 set a target of achieving a standardized recycling rate of over 60% by the end of 2025, advocating for collaborations between lead-acid battery manufacturers and recycling firms. This initiative is set to regulate the recycling of used lead-acid batteries, curtail environmental pollution, and promote high-quality industry growth. As technological advancements unfold, the market size is anticipated to grow steadily. While thermal treatment methods for used lead-acid batteries are proven effective, the associated high equipment costs and dust generation remain challenges. Leading companies are exploring hydrosmelting techniques to enhance processing efficiency and minimize expenses, paving the way for broader applications in the future.