According to preliminary statistics from SMM, China's aluminum plate/sheet and strip production in 2024 is expected to reach 13.1 million mt, an increase of approximately 692,000 mt, with a growth rate of about 6%. Aluminum foil production is expected to reach 4.8 million mt, an increase of approximately 336,000 mt, with a growth rate of about 8%.
Multiple aluminum plate/sheet, strip, and foil products are expected to see positive growth in production. In 2024, the production of domestic can stock, battery foil, double zero foil, auto body sheet, air-conditioner foil, brazing material, and electronic foil is expected to achieve positive growth. Although the growth rate of battery foil production is slowing down again, it still leads among aluminum plate/sheet, strip, and foil products.
Can body stock & can end stock: After experiencing a low point in 2023, can stock production is expected to rebound in 2024, with five out of the seven major producers achieving increased production compared to 2023. However, about 50% or more of China's can stock production is exported, and recent years have seen frequent tax increases on Chinese aluminum processed products in North America, Europe, and other regions, creating significant uncertainty in overseas markets, which may bring new challenges to the can stock industry.
Auto body sheet: Currently, eight domestic enterprises have the capability for mass production of auto body sheets, with a total of 12 production lines and a capacity exceeding 600,000 mt. Additionally, two more production lines are under construction, indicating ample capacity. However, the number of car models using aluminum body sheets is limited, and demand has not seen significant growth, suppressing the growth of auto body sheet production and processing fees.
Brazing material: Benefiting from the rapid development of NEVs, the production and sales of brazing materials are expected to continue to grow steadily in 2024. Leading brazing material enterprises are expected to maintain full production for most of the year. Driven by demand, several brazing material enterprises are actively expanding capacity, which will further boost production but may also pose future supply and demand risks.
Air-conditioner foil: The production and sales of air-conditioner foil are closely tied to air-conditioner production. In recent years, two main factors have driven air-conditioner demand: the increase in overseas demand due to global high temperatures and the domestic policy of ensuring housing delivery, which has boosted demand for air-conditioners and other home appliances. However, as time goes on, these two demand drivers may weaken, limiting future growth in the air-conditioner foil market.
Double zero foil: Double zero foil is mostly used in the packaging industry. In 2024, its performance is expected to be similar to can stock: an increase compared to 2023 but still below earlier levels. Although double zero foil production is expected to achieve positive growth in 2024, a large amount of battery foil capacity has been built in recent years, with some originally planned battery foil capacity being converted to double zero foil production. This has led to a growth rate in double zero foil capacity far exceeding demand growth, resulting in a supply surplus and difficulty in raising processing fees. Additionally, the export proportion of double zero foil is also around 50%, and significant changes in overseas markets could impact double zero foil enterprises.
Battery foil: According to SMM statistics, both battery foil production and the number of producers have been increasing in recent years, but the growth rates have slowed. The market share of leading enterprises has shown a trend of "high concentration - dispersion - reconcentration."
SMM believes that the changes in the number of battery foil enterprises and the market share of leading enterprises are in line with the development trends of the battery foil industry in recent years: In 2021-2022, the battery foil market was in short supply with high profits, attracting many aluminum foil enterprises to enter the market, leading to a rapid increase in the number of enterprises and a decline in the market share of leading enterprises. Starting in 2023, with the completion of new capacity commissioning, the battery foil market shifted to a surplus, intensifying competition and reducing profits. Some less competitive enterprises suffered significant losses in the battery foil market, reducing production and leading to a rebound in the market share of leading enterprises.
In 2024, there are expected to be about 26 enterprises capable of stable mass production of battery foil, with approximately five reducing production, eight increasing production, and 13 showing minimal YoY changes in production.
Currently, competition in the battery foil market remains fierce. Among the more than 20 producers, most are operating with minimal or even negative profits, and more enterprises may reduce production or exit the battery foil market in 2025. The hot topic of battery aluminum foil is gradually fading, and the industry competition landscape may shift from "hundreds of contenders" to "seven dominant players."
New capacity data confirms market trends. SMM statistics on new capacity for domestic aluminum plate/sheet, strip, and foil show that the investment enthusiasm for battery foil seems to have waned, with only a few capacities still under construction, almost all expected to be completed by 2025.
Secondary aluminum plate/sheet and strip have become the new investment hotspot. Of the 1.96 million mt of new capacity investments in 2024, approximately 1.1 million mt are related to secondary aluminum plate/sheet and strip, with several enterprises expressing intentions to invest in this area.
According to SMM statistics, about 22 aluminum plate/sheet, strip, and foil enterprises are expected to add secondary aluminum in their production processes in 2024, with most of the products using secondary aluminum being used in automotive or packaging-related products. The use of secondary aluminum in the aluminum plate/sheet, strip, and foil industry is expected to reach around 2.2 million mt in 2024, with both the usage and the number of enterprises increasing by about 40%.
Overall, the demand for aluminum plate/sheet, strip, and foil in both domestic and overseas markets in 2024 is expected to be higher than in 2023. However, due to the excessive new capacity and frequent overseas trade frictions, most enterprises have not seen significant improvements in their survival status. Although Europe and the US have entered interest rate cut cycles to stimulate the economy, and China has introduced a series of policies to boost consumption, injecting some optimism into the market, the aluminum plate/sheet, strip, and foil industry is expected to continue struggling with "insufficient orders and low processing fees" in 2025. For most aluminum plate/sheet, strip, and foil enterprises, cautious investment, reasonable pricing, and a focus on quality remain the best strategies.
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