The trend of intensive expansion and thinning of lithium copper foil manufacturers

On December 8th, Silver Nonferrous (601212.SH) announced that it planned to cooperate in the construction of a high-grade lithium copper foil project with an annual production capacity of 200000 tons, along with the general rise of lithium copper foil concept stocks. Since the beginning of this year, Jiayuan Technology, Nord shares, Chaohua Technology and other copper foil head manufacturers have already started to expand production plans in turn, the stock price has also risen sharply.

The Financial Associated Press reporter learned from multiple interviews that the demand for power and energy storage batteries has led to exuberant orders from copper foil manufacturers and intensive production expansion. Under the trend of extreme thinning, many projects plan to produce lithium copper foil with a thickness of 6 μ m or less.

Continuous production expansion of lithium copper foil

According to the announcement of Baiyin Nonferrous, the main body of the project, Gansu Defu New Materials Co., Ltd. (referred to as Gansu Defu), was established in Lanzhou New area in June 2018. Baiyin Nonferrous owns 37% and Defu Technology holds 51%. In October 2019, 12000 tons of Defu in Gansu Province has been completed and put into production, and the production capacity of 30, 000 tons will be formed by the end of 2021. The construction of the 40, 000-ton project has been started in October 2021 and is scheduled to be completed and put into production by the end of 2022. Another 130000 tons of production line will be built, and the overall construction of 200000 tons of copper foil project is planned to be completed in 2025.

In fact, more copper foil manufacturers have started the pace of production expansion early, and Jiayuan Technology is running out of acceleration. A reporter from the Financial Associated Press learned from people related to Jiayuan Science and Technology that the company originally had an electrolytic copper foil production capacity of 16000 tons / year, but after the completion of the IPO project, it added 5000 tons / year of high-performance copper foil for new energy power batteries. Shandong Xinliyuan announced in August that it had an annual production capacity of 5000 tons / year, and the company currently has a total production capacity of 21000 tons / year.

On November 6, Jiayuan shares disclosed the fixed increase plan, it is proposed to raise no more than 4.9 billion yuan for high-performance lithium copper foil project (including Jiayuan Science and Technology Park annual output of 16000 tons of high-performance copper foil technical transformation project, annual output of 15000 tons of high-performance copper foil project, annual output of 30, 000 tons of high-precision ultra-thin electronic copper foil project), and Jiangxi Jiayuan Science and Technology Co., Ltd. annual output of 20, 000 tons of electrolytic copper foil project. On November 10, the company announced its intention to build a high-end copper foil project with an annual production capacity of 50,000 tons in Meixian County, Guangdong Province.

Coincidentally, the production expansion of Nord shares is also continuing. After raising funds for the construction of 15000 tons of high-performance extremely thin lithium copper foil last year, the fixed increase plan was released again this year. It is proposed to raise no more than 2.288 billion yuan to invest in the 15000-ton third-phase project in Qinghai and 12000-ton third-phase project in Huizhou. The relevant person in charge of the company told the Financial Associated Press that the company is currently producing 43000 tons per year, and projects under construction of 15000 tons in Qinghai and 12000 tons in Huizhou are expected to be completed in the first half of next year. After all the expansion projects are completed, it will form a capacity of 85000 tons / year of lithium electricity and copper foil.

In addition, Chaohua Technology, Hailiang shares, Copper Crown Copper foil, Zhongzi Technology, Jiangxi Copper Industry and so on have also expanded production or announced to participate in the field of lithium copper foil.

Detonation requirements of power and energy storage batteries

The biggest driver of the intensive expansion of copper foil manufacturers comes from the surge in downstream demand for lithium batteries. Industry insiders told the Financial Associated Press that the rapid development of power and energy storage batteries has led to a big increase in demand for lithium copper foil, and it is imperative for manufacturers to expand production. At the same time, meeting the access conditions of the head battery factory is also a major driving force for manufacturers to expand production.

The demand for power batteries is mainly detonated by new energy vehicles. According to the China Automobile Association, China sold 2.542 million new energy vehicles from January to October this year, nearly double the sales for the whole of last year. Ouyang Minggao, academician of the Chinese Academy of Sciences and vice president of the China Electric vehicle Association, predicts that sales of new energy vehicles in China will reach 5 million next year and 7 million-9 million by 2025. According to GGII, shipments of power lithium batteries in China will be 80GWH in 2020 and will reach 470GWH in 2025, with a compound annual growth rate of 43 per cent. It is estimated that by 2025, the shipment of lithium copper foil in the field of power batteries in China will reach 286000 tons, with a compound growth rate of 36.7% from 2020 to 2025.

On the other hand, the energy storage battery mainly benefits from the development of the energy storage industry. According to GGII data, the volume of lithium battery shipments in China's energy storage field was 16.2 GWH in 2020, which is expected to grow at a compound growth rate of more than 60% in the next five years, and China's energy storage lithium battery shipments will increase significantly to 180GWh in 2025.

The demand for battery increases sharply, and the gap of lithium copper foil is obvious. Huaan Securities Research report pointed out that the global output of lithium copper foil in 2020 is 183000 tons, compared with the demand of 212000 tons, there is a gap of 29100 tons, and the gap between supply and demand will widen year by year. It is estimated that from 2021 to 2025, the global demand for lithium copper foil will reach 33.03 CAGR, 44.45, 53.70, and 64.89 / 789200 tons, respectively, and will be 30.05% in the next 5 years.

The prosperity of production and marketing of listed companies also confirms the prosperity of the development of the industry. The person in charge of Nord shares told the Financial Associated Press that the company's orders were booked in advance and the products were in short supply. Jiayuan technology-related people also said that the current downstream market conditions are good, the company is basically full production and sales.

The trend of extreme thinning

The Financial Associated Press reporter combed and found that in the spring tide of production expansion in the industry, most of the lithium copper foil expansion projects are the production of copper foil with a thickness of 6 μ m or less, which is the trend of the times.

Take Jiayuan Science and Technology as an example, the Jiayuan Science and Technology Park has an additional annual output of 16000 tons of high-performance copper foil technology transformation project to build two production lines with an annual production capacity of 8000 tons, including 6 μ m and less than 6 μ m copper foil, and an annual output of 15000 tons of high-performance copper foil project. the products also include 6 μ m and less than 6 μ m copper foil.

The person in charge of Nord shares told reporters that the company's current production is mainly 6 μ m, 8 μ m copper foil, 4-4.5 μ m copper foil accounts for 15% of 20%, and production expansion projects are light and thin products.

Silver Nonferrous is also clear in the announcement. According to the analysis of market demand, it is preliminarily determined that the main products of this project are 4.5 μ m and 6 μ m electrolytic copper foil for lithium battery.

"Lithium batteries have higher requirements for energy density, the thinner the copper foil is, the higher the mass energy density is, and the less copper is used, so the thinning of lithium copper foil is a trend in terms of cost and improving battery performance." Industry analysts told the Financial Union that China accounts for a large proportion of global copper foil production capacity, but in terms of lithium copper foil is still less, manufacturers continue to expand production is to take advantage of thin infiltration to expand the share of the move.

The above industry insiders also said that the increased demand for battery energy density, downstream battery companies' demand for cost reduction, extremely thinning of copper foil to increase product premium, and equipment technology breakthroughs of downstream battery manufacturers such as Ningde era have driven the ultra-thinning of lithium copper foil.

It is worth mentioning that although many head manufacturers have begun to expand production, there is still a bottleneck in the expansion of lithium copper foil under the limitations of equipment, technology, capital, certification and so on.

The above-mentioned industry analysts gave an example to the reporter that at present, the core equipment of lithium copper foil production is mainly imported from Japan, because the equipment capacity expansion rate can not catch up with the lithium copper foil production expansion speed, even if some enterprises want to cross the border into the lithium copper foil field, it is also difficult to buy equipment, which is doomed that this round of lithium copper foil production expansion is mainly based on head enterprises.

The person in charge of Nord shares confirmed to the reporter that at present, the supply of equipment in the industry is tight, but the company will order equipment in advance after production expansion planning, and it has been ordered from a supplier, which will give priority to supplying equipment to the company, and the company also uses some domestic equipment, so there is no problem in purchasing equipment. Jiayuan technology-related sources also told reporters that the company has booked Japanese equipment, expansion project equipment procurement is not a problem.

Huaan Securities also pointed out that cathode roll equipment is the key to limited production expansion; technology, certification, and high capital barriers; lithium copper foil expansion cycle is long, the speed is significantly slower than the downstream battery factory production expansion plan; domestic capacity utilization needs to be further improved: lithium copper foil slitting leads to loss, ultra-thin copper foil production process requirements reduce production efficiency, standard foil also has constraints on lithium copper foil production capacity.