Copper Foil Output Likely to Decline Further in February amid Weak Terminal Demand

SHANGHAI, Feb 16 (SMM) - China produced 66,100 mt of copper foil in January, down 8.58% on the month. Among them, the output of lithium battery copper foil was 39,800 mt, a sharp drop of 13.98% from the previous month; the output of electronic circuit copper foil was 26,300 mt, an increase of 1.02% from the previous month. The growth rate slowed down. Note: SMM surveyed 31 producers with a total production capacity of 984,000 mt.

Since December, the output of lithium battery copper foil stopped increasing and declined. The decline rate in January expanded. In January, due to the withdrawal of subsidies, contained demand, and CNY holiday, new energy vehicles industry was cold. Under the weak terminal demand, some lithium battery copper foil manufacturers switched to produce electronic circuit copper foil in order to reduce the financial pressure brought by the accumulating finished product inventory. But the new capacity has not been released yet and the lithium battery copper foil output did not see significant decline. In February, the consumption of new energy vehicles is still weak due to the elimination of stimulus policies and imperfect supporting facilities. Most lithium battery copper foil manufacturers with high finished product inventory post the CNY slow down the pace of production. Therefore, the output will continue to decline. The output of electronic circuit copper foil has not ushered in a seasonal decline, mainly because some lithium battery copper foil production capacity has been transferred to electronic circuit copper foil. But the actual terminal demand has weakened due to the CNY holiday.

China is expected to produce 65,400 mt of copper coil in February, an YoY inecrease of 34.51%. Due to the rapid expansion of lithium battery copper foil production capacity, the year-on-year output has risen. In terms of terminal consumption, Tesla’s price cuts may stimulate its brand consumption to a certain extent, but domestic car companies that have lost state subsidies are still struggling, and consumption continues to be weak. Most lithium battery copper foil companies reported new orders in February continued to decline, and some companies even expressed that they would switch to produce electronic circuit copper foil.