According to SMM data, China's copper foil monthly production in July 2024 was 83,700 mt, down 7.99% MoM. Among this, China's lithium battery copper foil monthly production in July was 51,200 mt, down 6.79% MoM; electronic circuit copper foil monthly production in July was 32,500 mt, down 9.80% MoM. In July 2024, lithium battery copper foil shipments were 43,900 mt, down 8.93% MoM; electronic circuit copper foil shipments were 29,800 mt, down 8.84% MoM.
The significant decline in domestic copper foil production and shipments in July was influenced by multiple factors:
1. Slowing demand from various end-user sectors. Specifically, for lithium battery copper foil, as battery cell and anode enterprises held certain inventories during peak seasons, downstream demand for anode materials slowed. According to SMM statistics, China's anode materials production in July 2024 was 145,000 mt, down 8% MoM. Although NEV market orders performed well, demand in the energy storage sector weakened as the year-end grid connection deadline ended. For electronic circuit copper foil, most end-user sector orders were weak, with the home appliance and consumer electronics sectors, which have a high consumption share, in a seasonal off-season. Only orders for AI and high-end HDI, which have a smaller consumption share, performed relatively well.
2. The decline in copper prices in July. Since the copper foil industry mostly adopted a pricing formula based on M-1 average copper prices for settlements, the lower and highly volatile copper prices in July significantly weakened downstream stocking demand.
3. After the market demand improved in Q2 and copper foil processing fees showed a warming trend, copper foil enterprises quickly restored production. With the sharp decline in copper prices in Q3 and weakened market demand, processing fees were under pressure again, forcing some copper foil enterprises to control their production pace.
Looking ahead, SMM expects the overall copper foil production in August 2024 to continue to decline to 82,400 mt. Among this, lithium battery copper foil production is expected to be 51,000 mt, and electronic circuit copper foil production is expected to be 31,400 mt; lithium battery copper foil shipments are expected to be 43,800 mt, down 0.39% MoM, and electronic circuit copper foil shipments are expected to be 28,400 mt, down 4.60% MoM. SMM expects a slight increase in downstream demand for lithium battery copper foil in August, with China's anode materials production rising to 152,000 mt, up 5% MoM. However, due to the current pressure on copper foil processing fees, enterprises will choose to control their production and shipment pace. As the electronic circuit copper foil end-user sectors are still in the off-season and copper prices continue to decline in August, downstream orders may continue to shrink. In summary, it is expected that the production and sales volumes of the copper foil industry will continue to decline in August.
