China is a major producer and consumer of lead. Compared to the primary lead extracted from ore, the regenerated lead obtained from waste batteries consumes less energy and emits fewer pollutants during the production process, which is more in line with the needs of low-carbon environmental protection.

On July 7th, at the 17th 2022 International Lead and Zinc Summit and International Lead and Zinc Technology Innovation Conference jointly organized by Shanghai Nonferrous Metal Network Information Technology Co., Ltd. (SMM) and Tianneng Holdings Group Co., Ltd., industry insiders stated that in recent years, China's recycled lead industry has developed rapidly, but there are still problems in the industry such as overcapacity, low profitability, and further improvement of equipment and process level.

According to the "14th Five Year Plan for Green Industrial Development" released by the Ministry of Industry and Information in November 2021, during the "14th Five Year Plan" period, China's production scale of recycled lead will continue to expand. It is expected that by 2025, China's recycled refined lead will reach 2.9 million tons, with a total market capacity of about 40 billion yuan.

The development of lead-acid batteries - recycled lead cycle has become the main driving force for the growth of China's recycled lead industry. More than 85% of China's recycled lead raw materials come from waste lead batteries, and more than half of the lead consumed in the lead battery industry comes from recycled lead. In the afternoon forum, Zhang Chunqiang, Executive Vice President of Tianneng Resource Recycling Business Unit, introduced that in 2021, the production capacity of renewable lead enterprises that extended from battery production enterprises to the dismantling of waste lead batteries reached 4.17 million tons/year, accounting for 38.5% of the renewable lead production capacity. The recycled lead industry has begun to develop intelligently and on a large scale. Since 2018, the production capacity of new and ongoing projects has mostly exceeded 100000 tons per year, and the concentration of the industry has rapidly increased.

Li Shilong, Chairman of the China Renewable Resources Industry Technology Innovation Strategic Alliance, pointed out at the forum that the relevant policies and laws and regulations issued by the state have played a crucial role in the scale development of renewable lead enterprises, and the technology, process and equipment of the relevant enterprises basically meet the domestic advanced technology level standards. Compared with developed countries, China's leading enterprises in the renewable lead zinc industry are already at an international leading level.

However, in an interview with a reporter from Pengpai News (www.thepaper. cn), Zhang Chunqiang stated that there are still problems with excessive investment, overcapacity, and low profit margins in the recycled lead industry.

According to statistics from Shanghai Nonferrous Metals Network, in 2021, China's recycled crude lead production was approximately 4.0485 million tons, an increase of 1.3711 million tons or 51.2% compared to 2.6774 million tons in 2020. The estimated production capacity of recycled lead in 2022 is 8.58 million tons, and in 2021 it is 8.37 million tons. Production capacity continues to expand, while terminal demand performance is relatively stable, and the market is gradually showing overcapacity.

On the one hand, overcapacity is suppressing the price of recycled lead. According to data from Shanghai Nonferrous Metals Network, the domestic price of recycled lead fluctuated within a range throughout 2021. In 2020, affected by the COVID-19, the lead price plummeted to 13125 yuan/ton in March, reaching a low level in the past four years. Then the price of recycled lead rebounded with the lead price. However, due to the continuous release of renewable lead production capacity, the market supply increased, which formed resistance to the upward trend of lead price. In 2021, the impact of the domestic epidemic weakened, with lead prices mainly fluctuating between 14575 to 15725 yuan/ton.

On the other hand, the continuous expansion of production capacity has led to a shortage of upstream raw materials such as waste lead batteries, which further drives up raw material prices and compresses corporate profits. According to statistics from Shanghai Nonferrous Metals Network, the scrap volume of waste lead batteries in 2022 is about 6.82 million tons. However, based on the production capacity of recycled lead enterprises and the utilization rate of about 50% of production capacity this year, it is estimated that the demand for waste lead batteries in 2022 is about 7 million tons, with market demand exceeding supply.

In the context of increasing competition for waste lead batteries, the price of waste lead batteries is constantly rising. According to Zhang Chunqiang, the average price of waste lead-acid batteries in China in June 2022 was 9054 yuan/ton, with a monthly average discount rate of 60.53%. The profits of recycled lead enterprises are further squeezed out.

The profit margin of this industry was originally not high, but in the past two years, due to various factors, the overall profit margin has decreased by about 2%, "said Zhang Chunqiang.

At present, the development of China's recycled lead industry is not only constrained by production capacity issues, but also by the urgent need to break through bottlenecks such as process technology and advanced equipment level.

Yang Xinming, from the Lead Battery Business Unit of Tianneng Holdings Group, introduced to the reporter of Pengpai News (www.thetaper. cn) that the production process of China's recycled lead industry can be divided into two types. After recycling the lead paste (mud) and grid plates from waste batteries, one is to conduct pyrometallurgical refining or electrolytic refining, and the other is to conduct wet smelting (electrolytic deposition). At present, almost all recycled lead enterprises in China use the first type of pyrometallurgical smelting process, and only a few enterprises use the second type of wet smelting (electrolytic deposition) process.

However, there are problems with low metal purity and high impurities in the process of pyrometallurgical smelting, "said Yang Xinming.

In addition, it is understood that the overall energy consumption of the recycled lead industry is still high, and the comprehensive utilization rate of resources is low. Almost all small recycled lead plants use the reverberatory furnace mixing method, and advanced melting technologies such as new energy-saving and environmentally friendly melting furnaces and low-temperature continuous melting have not yet been widely promoted and applied in the industry. Moreover, most enterprises do not undergo pre-treatment during the treatment of waste lead-acid batteries, resulting in the mixing of grid metal and lead paste, unreasonable utilization of alloy components, low comprehensive utilization of resources, and a certain gap in energy consumption compared to foreign countries.

Once again, the inadequate recycling system for waste lead-acid batteries has become a major constraint in the industry. Currently, over 80% of the total amount of waste lead-acid battery recycling is handled by individual buyers of waste materials. Small and medium-sized recycled lead factories dispose of nearly 40% of waste lead resources. However, recycled lead enterprises with a certain production scale, complete dismantling and pre-treatment equipment, and environmental protection measures find it difficult to collect raw materials.

Despite facing bottlenecks and challenges, participants expressed optimism about the future development of the recycled lead industry. In China, the trend of replacing primary lead with recycled lead is difficult to change, "said Zhang Chunqiang, who estimates that the proportion of recycled lead in China will account for 60% of the lead industry in 2022.

Li Shilong, Chairman of the China Renewable Resources Industry Technology Innovation Strategic Alliance, said that the industry should further promote advanced technological processes, improve industry automation and intelligence, achieve waste management, and reduce energy consumption.

With the official implementation of the "Improving the Value Added Tax Policy for Comprehensive Utilization of Resources" issued by the Ministry of Finance in March this year, the market recycling system for waste lead batteries has gradually improved, and lead batteries and primary lead enterprises are gradually infiltrating into renewable lead enterprises. Industrial renewable resources will be further utilized. Regenerated lead enterprises have started their own circular industry planning and are moving towards a mature closed-loop path. The core of leading the development of green circular industries will ultimately fall on process equipment technology, "said Zhang Chunqiang." How to improve the profitability of the industry is our eternal topic