America Just Locked Down Its Battery Scrap

By Siam Sukkhee Trading Co., Ltd — 2026-09-27 — ISRI (Institute of Scrap)

I watched this rule land on August 6 and spent the next week trying to work out exactly what it means for traders outside the US. Turns out: quite a lot.

The Department of Commerce just told American companies they cannot ship black mass or tungsten scrap overseas. Full stop. From August 27 onward, everything stays domestic unless you get explicit permission from the Bureau of Industry and Security.

Black mass, for those not in the weeds daily, is the shredded cathode material you get from lithium-ion batteries after processing. Lithium, cobalt, nickel, manganese, aluminum, copper—all of it, mixed together. The stuff that every recycler in Southeast Asia and Europe has been quietly depending on to feed their refineries.

This is not small.

The rule targets specific export codes. Tungsten waste and scrap under one code, then three separate classifications for battery waste and electrical scrap that count as black mass. The definition matters. If what you're buying does not meet their definition of black mass—specifically, shredded lithium-ion scrap with cathode material—it technically falls outside. But.

Actually, that's not quite right. The boundaries are fuzzy. What counts as "cathode material" and whether your material qualifies depends on how it was processed, and that creates practical uncertainty for traders. You need documentation proving what you have is what you think it is.

The Americans built this under the Defense Production Act. It was a presidential determination in late July saying, more or less, that battery materials are critical to national defense and domestic supplies are not enough. So they locked it down. One year, maybe longer.

What this actually does is redirect a major commodity flow. Battery recyclers in the US, which have been selling to whoever paid, now have to sell domestically or ask for a waiver. And getting a waiver is a process. Requests started rolling in from August 6, which tells you something about how many people saw this coming.

The practical effect for a trading house in Bangkok or Singapore or anywhere else: sources that existed are now closed. You cannot buy American black mass the way you used to. Chinese tungsten already costs three times what it did two years ago because of Beijing's export controls. Now American material is locked too.

The stated reason is national defense and securing supply chains. The actual mechanism is nationalizing battery feedstock. It works. And it works because neither Congress nor the industry has much to say about it—this is the first allocation order the Commerce Department has issued under these powers. They probably will not stop here.

Source: "Beginning August 27, 2026, US persons that sell black mass and tungsten waste and scrap must allocate 100 percent of their monthly sales to US persons, unless they first obtain an adjustment or exception from BIS." — Baker McKenzie Global Sanctions and Export Controls Blog

Tags: metals trading Thailand 2026