Standardized traceability management needed in individual recycling of lead-acid battery

Asian Meal: Hello, Mr. Shen. Thanks for taking our interview. Would you please give a brief introduction on your company at first?

Ms. Shen: Our company mainly focuses upon recycling and utilization of used lead-acid storage batteries, and our main products include secondary lead 98%min, refined lead, lead alloy and related auxiliary products such as ABS plastics. Our company originated from Guizhou Changlong Metal Processing Co., Ltd. which, granted with hazardous waste permit in 2010, was the first local enterprise obtaining such permits in Guizhou. For reasons including environmental protection policies, Guizhou Changlong moved to the Geyi Economic Development Zone in 2015 and was formally renamed Guizhou Jinlong Metal Alloy Co., Ltd. Our company has raw material warehouses, production workplaces and storage warehouses.

Asian Meal: Would you please share with us your current production and operation status?

Ms. Shen: Our company was founded in 2015, went into trial production in 2016 and commenced commercial production in 2017. We mainly produced secondary lead 98%min at that time and extended production chain to refining in 2018 by commencing production of new products such as refined lead and lead alloy. We have two production lines at present with an annual treatment capacity of 108,000t of used lead-acid storage batteries and an annual production capacity of 60,000t of secondary lead. Our plant design is composed of designs on pretreatment workplaces for used lead-acid storage battery, production workplace for secondary lead, green production workplace for refined lead and lead alloy. In 2020, affected by the COVID-19 pandemic, our production was around 40,000t. We have formed strategic cooperation with a number of storage battery manufacturers and long-term orders account for around 80% of our total sales.

Asian Meal: The new Law of China on the Prevention and Control of Environmental Pollution by Solid Waste (hereafter referred to as New Solid Waste Law) went into force on September 1, 2020. Meanwhile, many local governments across China strengthened administration on recycling of used storage batteries. Would you please share with us your opinions on how these policies have affected the secondary lead industry?

Ms. Shen: Though our company does not have a long history, we have actually been dedicated to this industry for many years. In the old days, the battery recycling industry did not feel optimistic about treatment of used lead-acid storage battery and the public did not have enough awareness of environmental protection. So it was commonly seen that acid solutions resulting from battery dismantling process were poured everywhere. Thanks to insistent awareness-enhancing activities carried out by governments and enterprises and also thanks to progress made in relevant laws, the public gradually realized risks and harms hidden in improper disposal, and this issue has been greatly solved so far. Another issue in relation to improper exposure of acid solutions was that some enterprises which had no capacities of properly treating battery acid solutions discharged them directly after batteries were dismantled, leading to lead and acid pollution. In recent years relevant institutes paid attention to and also gave guidance to such enterprises, helping them carry out technical upgrading, and unqualified enterprises exited the market. Now, recycling enterprises are not allowed to operate unless they are granted with hazardous waste permits, and when they apply for such permits, they have to equip themselves with required processing abilities. This is a compulsory index which can effectively prevent recycling enterprise from causing pollution. In fact, when you look at the existing secondary lead production techniques, you can find that some acid solutions can bring in economic values, so it’s of smaller possibilities for recycling companies to dispose solutions at random. Another issue is how to legalize the recycling process. This means that reproduced products can be traced back to their origins. This is a point also emphasized in the New Solid Waste Law, but it is described in the law as producer’s liability extension rule. At present, product origins of corporative enterprises can be traced via electronic bills or transport bills held or issued by such enterprises, but how can we do if recyclers are individuals? My opinion is that we need to pay more attention to the issue of individual origins and work together to find solutions for it.

Asian Meal: In view of overall tight supply of used storage batteries at present, how does your company respond to ensure your smooth operation?

Ms. Shen: On one hand, we have our own subsidiary in charge of sourcing used storage batteries and also have established steady cooperation with some suppliers. An essential supply system can ensure us with minimum raw materials for our production. On the other hand, we also have set up strategic cooperation with storage battery plants. According to the producer’s liability extension rule, storage battery producers have responsibility of recycling used storage batteries via independent, entrusted or joint channels. Quite a large proportion of storage batteries to be recycled in Southwest China have gone to our company in joint or entrusted recycling forms. So the two methods effectively ensure our production. Besides, some recycling enterprises complained about difficulties in sourcing used storage batteries. That is because they have quite large purchase volumes. As for us, since our production is not so large, we haven’t felt great pressure in purchasing raw materials.

Asian Meal: Environmental protection is a theme unavoidable for secondary lead enterprises. What measures have your company adopted to ensure that you meet requirements on environmental protection?

Ms. Shen: At the very beginning of our company construction, we strictly implemented the requirements issued by the government on entering the secondary lead industry. Now, we have oxygen-rich bottom-blowing furnaces which are in line with government requirements, and also have complete environmental protection equipment including dust-collecting, desulfurization, online-monitoring and waste water treatment facilities. But if we are required by the government to cut our production for climate reasons, we will surely do as required.

Asian Meal: When the year of 2020 fell, there are secondary lead projects in Anhui, Jiangxi and Inner Mongolia successively going to operation or to go into operation soon, so secondary lead production capacity in China tends to be increasingly excessive. How do you think of development outlook for the secondary lead industry in China?

Ms. Shen: In my opinion, the domestic secondary lead industry indeed witnesses excessive production capacity, leading to increased competition among secondary lead producers on one hand and incomplete utilization of current production capacity on the other hand, since some producers have to cut production either out of their own will or required by governments. The secondary lead industry has locality restrictions owing to transportation distance of used storage batteries. That means, if there are no lead enterprises in a certain region, there is nothing accusable for it to construct its lead projects; but if it’s a region where there are already lead projects while construction of new projects are approved, all lead projects there will undergo market competition and only those with better economic strengths, higher administrative abilities and stronger awareness of social responsibilities can survive. As for us, we will attach more importance to construction of the industrial chain. For example, if you cooperate with us, you will be able to solve all potential issues related to the production’s liability extension rule, so that the lead-acid storage battery industry can enjoy longer life cycle and achieve real reduction in energy consumption and carbon emission in its whole closed recycling system. We hope that we can do a better job in this aspect and also by doing this we can better establish ourselves in fierce market competition.

Asian Meal: How is lead ingot consumption by downstream industries at present? And how do you think of the long-existing discussions about Li-battery replacing lead-acid storage battery?

Ms. Shen: Downstream consumption is stable for the time being and there are no great changes in overall demand. As for the issue of replacement by Li-battery, my view is that no matter from overall industry or from technical perspective, it is of small possibility that Li-battery will totally replace lead-acid storage battery, but more likely that replacement happens just in some industries, such as in public transport or energy-storing fields. In the light of current industrial developments, lead-acid storage battery still has notable advantages. Firstly, its cost is low. Next, as an industry with a history of over 100 years, lead-acid storage battery has quite mature production techniques and can be recycled for new utilization. But for Li-battery or other new kinds of batteries, whether they can survive from changes and developments in 100 years or even longer is still questionable. In sum, I believe that at least in the short term we needn’t worry about the issue of replacement and the lead-acid storage battery industry will keep steady development trend.

Asian Meal: How do you think of lead ingot consumption and lead price trend in 2021?

Ms. Shen: Considering consumption in 2021, I believe that it would stay relatively steady. As for lead prices in 2021, I think that they would fluctuate in the range of RMB14,000-16,000/t (USD2,164-2,473/t). This price range is acceptable for both producers and consumers. Prices lower than this range are profitless for producers or even mean losses, in which cases producers will cut or even suspend production. If prices are higher than this range, producers are expected to increase their operating rates, which will result in oversupply; with market competition growing, lead prices will certainly be driven down to some extents.

Asian Meal: What is your company’s future development plan and goals?

Ms. Shen: We aim to maintain steady development and ensure legal operation in all our production links. Besides, we will also focus upon optimizing our industrial chain. If this goal can be realized, I believe that it will be good both to the country and the people.

Asian Meal: Thanks again for taking our interview. Wish your company better and better.

Ms. Shen: Thanks.