Signing a long-term supply order, investing in shares and increasing capital, and establishing joint ventures have become effective ways for battery companies to deploy copper foil supply for lithium batteries, reduce production costs, and improve product profitability. In 2022, in many opportunities and challenges, the competitive landscape of the lithium battery copper foil market has undergone multiple rounds of evolution.
1. Lithium battery copper foil industry mergers and acquisitions open
Tongbo Technology was established in August 2016. Its main products are electronic copper foil and lithium battery copper foil. The products are mainly high-performance ultra-thin electronic copper foil of 6 microns and above. The company's customers include CATL, BYD, EVE and other battery companies. Clear View Copper Foils was established in May 2011. It is mainly engaged in the R&D, production and sales of 4-8μm double-sided photoelectrolytic copper foil for new energy vehicle lithium batteries, and has reached cooperation with CATL, CALB, SVOLT and other battery companies.
NUODE said that the acquisition or capital increase merger of companies in the same industry will help the company to steadily expand copper foil production capacity, increase market share, optimize the competitive landscape, and further strengthen the company's overall competitiveness. Professionals said that if lithium battery copper foil enterprises want to stand out in the future market competition, they need to have outstanding competitive advantages in terms of market, product, technology, production capacity, supply chain, etc.
In the next five years, NUODE will also increase investment in production capacity, expand new production bases around the world, and strive to reach a production scale with an annual production capacity of 300,000 tons by 2027. It is estimated that by 2025, the total production capacity of lithium battery copper foil in China will exceed 2 million tons, a year-on-year increase of more than 6 times, and the future market competition for lithium battery copper foil will become more intense. Industry insiders pointed out that with the gradual release of new production capacity, the tight supply of copper foil for lithium batteries will be eased, and it is expected that there will be overcapacity in the second half of 2023.
At the same time, overcapacity will lead to a reduction in processing fees and a reduction in the price of copper raw materials. Power battery companies in the world are also asking copper foil companies to continue to reduce product prices. Copper foil companies will face tremendous pressure and challenges in reducing costs. With the escalation of market competition, some small and medium-sized copper foil companies and new entrants who do not have core competitive advantages will be eliminated in the fierce market competition in the future, or be merged by leading copper foil companies. The market share of lithium battery copper foil will be concentrated to leading enterprises.
2. Power battery companies become shareholders of copper foil companies
With the continuous growth of power battery shipments and the large-scale expansion of production capacity, having a strong, complete and diversified supply system has become the core competitive element for power battery companies to participate in future market competition. Under the pressure of tight upstream supply and skyrocketing prices, power battery companies have extended their raw material procurement projects from the four main materials to more upstream basic raw materials such as precursors, lithium salts, and additives, and the supply chain has been further extended.
In the process, high-quality lithium battery copper foil has become a strategic resource for power battery companies. In March 2021, CATL strategically invested in Defu Technology through its subsidiary Chendao Capital, holding 3.87% of the shares. Subsequently, LG Chem also strategically invested in Defu Technology, holding 4.69% of the shares. Since then, battery companies including SVOLT, Farasis, BYD, GOTION HIGH-TECH, and Sunwoda have successively invested in other copper foil companies.
Battery companies are scrambling to invest in lithium battery copper foil companies, indicating that battery companies have urgent needs to ensure stable supply of lithium battery copper foil and maintain stable prices. Driven by the rising prices of copper raw materials and processing fees, as well as the growth in downstream market demand, the price of copper foil for lithium batteries has risen sharply in recent years, and the cost ratio in lithium batteries has risen rapidly.
Under such circumstances, power battery companies investment in copper foil companies for deep binding will provide guarantees for the supply of copper foil for lithium batteries and reduce procurement costs. It is worth noting that there is currently no absolute leading company in the lithium battery copper foil market, and the market concentration is significantly lower than that of cathode, anode, separators and electrolytes. Under such circumstances, power battery companies have invested in copper foil companies one after another, which may have a significant impact on the future competition pattern of the lithium battery copper foil market.
3. Composite copper foil has attracted attention
In order to improve battery energy density and safety and reduce costs, lithium battery copper foil is developing in the direction of high density, light and thin, high tensile strength, and high elongation. Among them, composite copper foil has performance advantages such as improving battery safety, increasing energy density, reducing manufacturing costs, and strong compatibility. It is considered to be a good substitute for traditional lithium battery copper foil and has received widespread attention from both inside and outside the industry.
Compared with traditional copper foil, composite copper foil has the advantages of solving battery safety problems, improving energy density, reducing manufacturing costs, improving cycle life, and strong compatibility. Based on this, leading power battery companies have taken the lead in establishing research projects on composite copper foil, and even loaded them into vehicles for testing, showing their strong interest in composite copper foil. Under such circumstances, the composite copper foil track is heating up rapidly, attracting many industrial chain companies to compete for layout.
Faced with the challenge that composite copper foil companies may replace lithium battery copper foil on a large scale in the future, traditional copper foil companies including NUODE and Defu Technology have launched research on the industrialization of composite copper foil. However, composite copper foil still faces bottlenecks such as immature production equipment and technology, low production efficiency and product yield, and the overall technology is still in the stage of perfection, and there is still a certain distance from large-scale industrialization.