Low gross profit and operating rates

China's lithium battery copper foil shipments will reach 528,000 tons in 2023, and this year may continue to have low gross profit margins and low operating rates.

Recently, the research institutions EVTank and Ivy Economic Research Institute jointly released the "White Paper on the Development of China's Copper Foil Industry (2024)" with the China Battery Industry Research Institute. According to the statistics in the white paper, the total shipment volume of lithium battery copper foil in China in 2023 will be 528,000 tons, a year-on-year increase of 23.9%, accounting for 78.1% of the global shipment volume of lithium battery copper foil.

EVTank stated in the white paper that in 2023, 3.5μm ultra-thin lithium battery copper foil will begin to be sold in batches, and 4.5μm lithium battery copper foil is gradually replacing 6μm to become the mainstream product.

From the perspective of the competitive landscape, the combined market share of Longdian Huaxin, Defu Technology, Jiayuan Technology and Huaxin New Materials reached 47.3%, and Hailiang Co., Ltd. was newly shortlisted in the top ten companies in 2023. According to the white paper data, by the end of 2023, China's total electrolytic copper foil production capacity will be 1.618 million tons, of which 997,000 tons will be lithium copper foil and 621,000 tons will be electronic circuit copper foil. EVTank said that with the commissioning of a large number of new lithium copper foil production capacities, the entire industry has shown a serious state of overcapacity. Coupled with the fact that the shipment volume of the downstream lithium battery market is lower than expected, the processing fee of the entire lithium copper foil has dropped significantly, basically the same as the processing fee of electronic circuit copper foil. Overcapacity and weakened demand have led to a sharp decline in the gross profit margin of the entire industry. EVTank statistics show that the average gross profit margin of the entire lithium copper foil industry in 2023 will be only 6.4%, a decrease of 13.4 percentage points from 19.8% in 2022.EVTank predicts that a large number of lithium battery copper foil projects planned in 2024 may be suspended or converted into electronic circuit copper foil, and the low gross profit margin and low operating rate of the entire lithium battery copper foil may continue throughout 2024.