According to the data released by the China Association of Automobile Manufacturers, in November 2020, the sales of new energy vehicles in China continued to pick up, reaching 200000 in that month, a steady growth for five consecutive months. The recovery of demand for new energy vehicles has driven the demand for lithium batteries higher. As the copper foil, the key auxiliary material of lithium battery, is in the upgrade iteration period, and the copper price rises, the copper foil supply and demand may be unbalanced this year.
■ Copper foil price rises significantly
The rapid rise of copper foil prices was affected by copper price shocks. Since the second half of 2020, with the gradual recovery of market demand, the inventory of metal copper has been declining, leading to the continuous rise of copper prices.
Data shows that by the end of December 2020, copper prices on the London Metal Exchange and the Shanghai Futures Exchange were US $7939/t and 59300/t respectively, with monthly increases of 12.2% and 11.9% respectively, 27.9% and 20.4% higher than the low values in 2020.
The continuous rise of copper prices has led to a strong wait-and-see mood among downstream enterprises, and poor order signing and shipment volume. However, when the demand of the new energy vehicle market began to appear, the supply and demand of the copper foil market became increasingly unbalanced, and the price rose accordingly.
According to the data of market service agency Baichuan Yingfu, in December 2020, the price of 6-micron copper foil rose all the way to 76 yuan/kg, up 7.8% from the low value in March of that year; The price of 8 micron copper foil was 94 yuan/kg, up 5% from the low value of the year, with a relatively obvious upward trend.
Soochow Securities said that it is expected that the new energy vehicle market will continue to recover this year, with strong demand for copper foil. However, copper prices and copper foil prices have not shown signs of weakening. In addition, domestic copper foil producers are slow to expand their production, and copper foil prices may maintain an upward trend.
■ New product capacity still needs to climb
According to the different thickness of copper foil and battery materials, the copper foil accounts for about 5% - 8% of the cost of lithium battery when the unit consumption of copper foil for lithium battery is 700-900t/GWh.
Although the cost proportion is not high, as the key auxiliary material of lithium battery, copper foil plays the role of carrier and conductor of negative active material. This makes lithium battery manufacturers pay special attention to it.
In addition to the above mentioned impact of the copper price rise on the copper foil price, another factor of the recent imbalance between supply and demand in the copper foil market is that the product is in the upgrade iteration period, and the lack of high-end product capacity leads to a gap in the market convergence.
Chen Yubi, executive vice president of Nordisk, said that in recent years, due to the need to improve battery performance and reduce costs, the demand of power battery enterprises for copper foil has grown from 12 microns to 6 microns, and leading enterprises have even begun to try to import 4-5 microns products.
Soochow Securities pointed out that since 2019, the penetration rate of 6-micron products has been increasing, and copper foil manufacturers have also started to accelerate the iterative upgrading of new product lines. However, in the production process, the thinner the product is, the lower the load rate, yield and operating rate are, and the higher the process cost is. At the same time, the new production line has a long production cycle, and the short-term mismatch between supply and demand of the product structure has led to periodic fluctuations in copper foil prices.
