- US restricts black mass exports from August end
- China NMC market remains under pressure from weak demand
The US has moved to restrict overseas shipments of black mass and tungsten scrap, marking a significant step towards retaining recoverable critical minerals for domestic processing. The Bureau of Industry and Security (BIS) announced the temporary restrictions on August 6, with the measures scheduled to take effect from August 27 and remain in place for one year.
For China, the development could gradually tighten access to US-origin black mass, a feedstock that has traditionally moved into Asian recycling and refining networks.
The immediate impact on China’s market remains limited as domestic demand for recycled battery materials is already subdued. However, the policy adds another layer of uncertainty to China’s feedstock procurement, particularly as tighter controls from major Western markets could intensify competition for internationally available black mass. Market participants expect US exporters to seek exemptions or licences to maintain international trade.
Additionally, the growing localisation of recycling capacity in the US and Europe could gradually reshape the global availability of secondary battery feedstock, forcing Chinese companies to rely more heavily on alternative origins and overseas investments to secure material.
Domestic Chinese market remains sluggish
Despite concerns over future feedstock availability, China’s domestic black mass market remained subdued in early August, with buyers and sellers maintaining a cautious stance amid weak downstream demand and expectations of further declines in lithium, cobalt and nickel prices.
The LFP black mass segment remained under pressure, while the market also saw weak buying interest as elevated inventories and uncertain battery-metal price outlooks discouraged fresh procurement. Recyclers reported difficulties in clearing stocks of recycled battery chemicals, prompting processors to slow procurement and limit black mass purchases.
The cautious buying environment could persist in the near term, although tighter US export controls may eventually reduce globally available feedstock and intensify competition among Chinese recyclers for overseas material.
China’s processing advantage remains intact
While tighter US export controls could constrain China’s access to overseas feedstock, they could also strengthen the strategic importance of Chinese recycling technology.
China has an established hydrometallurgical processing base, extensive battery recycling infrastructure and significant expertise in recovering lithium, cobalt and nickel. Chinese companies have also expanded overseas investments to secure feedstock and establish recycling networks closer to battery waste sources.
This gives China an important advantage if global recycling trade becomes increasingly regionalised. Rather than relying solely on direct imports of black mass, Chinese recyclers could increasingly secure material through overseas processing and investment partnerships.
Outlook
The US policy therefore presents both a risk and an opportunity for China. In the short term, weak domestic demand and high inventories are likely to keep Chinese black mass procurement subdued.
However, over the medium term, tighter US and potentially European controls could reduce the pool of internationally traded black mass and intensify competition for available feedstock.
For China, the key question is how quickly Western countries develop sufficient domestic recycling capacity. Until that capacity is established, China’s large refining base and technological expertise should continue to support its role as a major global processing hub.
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