China’s Used Battery Cell Market Declines in July 2026 Amid Softening Raw Material Prices and Lower Price Acceptance

July 26, 2026

SMM China

Overview

China’s used battery cell market saw a general decline in July 2026, driven by a broad softening of lithium, nickel, and cobalt prices and reduced acceptance of high prices by downstream players. Ternary and LCO battery cells continued to fall, while LFP cells tracked lithium carbonate fluctuations. This trend indicates improved supply-demand dynamics and more efficient price transmission within the recycling sector, reflecting increased market maturity.

In Depth

Key Findings

China’s used battery cell market experienced a comprehensive downturn in July 2026, primarily due to the softening prices of key raw materials like lithium, nickel, and cobalt, coupled with decreased acceptance of high prices by downstream participants. Both ternary and LCO (lithium cobalt oxide) battery cells saw continuous price reductions, while LFP (lithium iron phosphate) battery cells fluctuated in tandem with lithium carbonate prices.

Technical & Market Details

Ternary & LCO Battery Cells: These high-nickel and high-cobalt content batteries were directly impacted by the falling prices of their respective metals, leading to market price softening. Downstream recyclers and material producers are diversifying their raw material sourcing, reducing their reliance on expensive used cells.
LFP Battery Cells: The price movements of LFP batteries are closely correlated with fluctuations in lithium carbonate, their primary constituent. As lithium carbonate prices entered a correctional phase in July, LFP used cell prices followed suit.
Supply-Demand Balance and Price Transmission: Market dynamics indicate an improved supply-demand balance compared to previous periods, enabling faster and more efficient transmission of raw material price changes to the used battery cell market. This suggests increased transparency and efficiency within the sector.

Background & Industry Context

China stands as the world’s largest electric vehicle (EV) market and a rapidly expanding hub for battery manufacturing and recycling. The used battery recycling market is gaining strategic importance for both critical mineral supply security and environmental sustainability. Ongoing government support, technological innovation, and an increasing number of market participants continue to reshape the recycling industry’s structure.

Historically, escalating raw material prices pushed up used battery costs. However, diversification of supply chains and advancements in recycling technologies are shifting the market towards a more balanced state. Significant progress has been made in recovering nickel and cobalt from ternary batteries and lithium from LFP batteries.

Strategic Significance & Outlook

While the market downturn represents a short-term price correction, it is likely to foster the healthy long-term development of the recycling industry. Stabilized raw material procurement costs will enhance the price competitiveness of recycled products, potentially leading to broader adoption. Furthermore, the development of more efficient recycling processes and improved market transparency are critical steps towards building a sustainable battery supply chain. The interplay between raw material price trends and recycling technology evolution will remain a key determinant of market direction.

Source: https://news.metal.com/en/newscontent/104023241-smm-analysisused-battery-cell-market-in-july-2026-low-acceptance-of-high-prices-drives-market-to-drift-lower

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