Brief Analysis of the Tug-of-War Between Sellers and Buyers of Battery Aluminum Foil Under the Background of Capacity Surplus [SMM Analysis]

SMM March 1 News:

As the core power carrier in the new energy era, lithium-ion batteries have driven technological innovation across all segments of the industry chain through the R&D and industrialisation of their key materials. In the field of current collectors for cathode materials, battery aluminum foil has become an indispensable fundamental material for lithium battery manufacturing due to its excellent conductivity and mechanical strength. With the accelerated transformation of the global energy structure, the explosive growth of the NEV market has continuously driven the demand for battery aluminum foil upward. However, the technical barriers and market dynamics in this field also warrant in-depth exploration. This article will analyse the unique development trajectory of the battery aluminum foil industry in terms of material characteristics, cost structure, and market landscape, revealing its distinctive path amid technological innovation and market competition.

I. Applications and Characteristics
Battery aluminum foil refers to aluminum foil used as the current collector in lithium-ion batteries. In terms of thickness, common specifications range from 12-15μ, with the thinnest currently achievable domestically being 8μ. However, this is still in the trial phase and difficult to mass-produce. Due to the stringent requirements of battery production and the need to coat cathode materials on the aluminum foil during subsequent production processes, the surface quality and certain mechanical properties of battery aluminum foil, such as elongation, compressive strength, and dyne value, far exceed those of other aluminum foils.

II. Price Composition
Currently, the processing fee for bare battery foil in the domestic market generally ranges from 12,000 yuan/mt to 18,000 yuan/mt, with specific prices influenced by more than ten factors. Due to the higher requirements compared to ordinary aluminum foil, the early yield rate of finished battery aluminum foil was extremely low, with the yield rate of foil stock for battery foil production only at 60%-70%. After years of market development and technological improvement, the yield rate has gradually increased to 70%-75%. However, the relatively low yield rate has resulted in scrap costs consistently accounting for the largest proportion of production costs for battery foil, reaching as high as 40%. The processing fee cost of battery aluminum foil stock and other costs each account for 25%-35%.

III. Market Supply and Demand Scale
According to SMM, more than 16 aluminum foil enterprises in China have currently entered the battery foil business, most of which are well-known leading enterprises. In 2024, China's total production of battery aluminum foil exceeded 480,000 mt, and it is expected that the production and sales of battery aluminum foil will surpass 550,000 mt in 2025. NEV power batteries are expected to remain the largest downstream application for battery aluminum foil in the coming years, while consumption in 3C electronics, ESS, and other fields is expected to remain largely stable, with no significant increase.

In summary, the rapid development of the NEV industry has brought broad prospects for the battery aluminum foil sector. The industry currently faces technical challenges in achieving mass production of 8μ ultra-thin foil, cost pressure due to yield rate constraints, and structural imbalances caused by rapid capacity expansion and slowing end-use demand growth. Therefore, under the backdrop of overcapacity and a slowdown in the NEV industry's growth, the oversupply trend in battery aluminum foil is likely to persist in the next 2-3 years.

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