Operating rates of copper foil enterprises continue to rise, with lithium battery sector demand becoming the growth engine [SMM Analysis]

SMM July 8 News:

According to SMM, the operating rate of Chinese copper foil enterprises in June 2025 was 74.78%, up 2.62 percentage points MoM and 2.75 percentage points YoY. Among them, the operating rate of large enterprises was 79.57%, that of medium-sized enterprises was 49.79%, and that of small enterprises was 65.09%. Specifically, in different fields, the operating rate of electronic circuit copper foil was 77.52%, up 1.91 percentage points MoM and down 3.43 percentage points YoY. The operating rate of lithium battery copper foil was 73.37%, up 2.98 percentage points MoM and 6.20 percentage points YoY. It is expected that the overall operating rate of the copper foil industry will continue to rise slightly to 75.18% in July 2025.

Operating rate of copper foil enterprises in June 2025: 74.78%
Under the trend of steady growth in overall terminal orders, the operating rate of Chinese copper foil enterprises in June 2025 once again reached a new high for the year. In terms of lithium battery copper foil, orders for both power and ESS sectors remained relatively stable. In terms of electronic circuit copper foil, orders for high-end products were hot, but as consumption shifted from peak season to off-season, demand for low-end products showed a downward trend. In addition, the "Regulation on Ensuring Payment of Accounts to Small and Medium-sized Enterprises" officially came into effect on June 1, 2025, shortening the payment period for suppliers by downstream enterprises to within 60 days, improving corporate cash flow. Coupled with the relatively stable operation of copper foil processing fees in 2025, some large copper foil enterprises continued to release capacity.
Raw material and finished product inventories of the copper foil industry decline in June
In June, the finished product inventory/output ratio of the copper foil industry decreased by 0.94 percentage points MoM to 16.34%, and the raw material inventory/output ratio decreased by 0.17 percentage points MoM to 16.82%. With stable downstream orders for copper foil, copper prices surged in late June, driving downstream stockpiling demand to a certain extent, and leading to a decline in finished product inventories of the copper foil industry.

Forecasted operating rate of the copper foil industry in July 2025 rises to 75.18%
SMM forecasts that in July 2025, the overall operating rate of Chinese copper foil enterprises will be 75.18%, up 0.40 percentage points MoM and 8.90 percentage points YoY. It is expected that the operating rate of lithium battery copper foil in July will be 74.76%, up 1.39 percentage points MoM and 12.15 percentage points YoY. The operating rate of electronic circuit copper foil in July is expected to be 75.99%, down 1.53 percentage points MoM and up 2.97 percentage points YoY. SMM expects that the overall operating rate of copper foil enterprises will continue to climb in July, primarily due to the planned further increase in capacity utilization rates of large enterprises, supported by shortened payment terms and demand from the lithium battery sector. However, when looking at specific segments, there is a divergence in the expected trends between lithium battery copper foil and electronic circuit copper foil. For lithium battery copper foil, there is no sign of weakening in overall downstream demand, and current demand expectations remain stable. For electronic circuit copper foil, with the arrival of the traditional consumption off-season, downstream demand, especially for low-end products, is expected to decrease.