Lithium electricity racing track is so coquettish that it leads to the industry chain leader to bend over. With the popularity of the new energy vehicle industry, lithium copper foil in the upper reaches of the power battery industry chain is in short supply, and the relevant listed companies continue to expand production.

A few days ago, copper foil leader Jiayuan Technology, with a market capitalization of nearly 20 billion yuan, disclosed the prospectus for private placement (registration draft). The issuance of shares to specific targets requires the approval of the CSRC to register before it can be implemented. Prior to this, the company disclosed that it is proposed to increase no more than 4.722 billion yuan for high-performance lithium copper foil projects, electrolytic copper foil projects and supplementary liquidity. In May this year, Hangzhou Electric Power Co., Ltd. announced that it plans to invest about 5 billion yuan to build an ultra-thin copper foil project with an annual capacity of 50, 000 tons of lithium batteries for new energy vehicles. A few days ago, Nord shares also announced that it plans to build a new production base of 100000 tons of copper foil materials, with a registered capital of 2.5 billion yuan.

Expand the production capacity of lithium copper foil

Jiayuan Technology is one of the 25 enterprises listed by Science and Technology Innovation Board in July 2019. The company is mainly engaged in the research, production and sales of all kinds of high-performance electrolytic copper foil. Its main products are ultra-thin lithium copper foil, ultra-thin lithium copper foil, standard copper foil, mainly used for the manufacture of negative current collector, copper clad laminate (CCL) and printed circuit board (PCB) of lithium-ion battery. It is an important basic material for lithium-ion battery industry and electronic information industry.

Affected by the continued prosperity of the domestic lithium industry, Jiayuan Technology has been expanding its production capacity in recent years. In terms of direct financing, the company raised 1.633 billion yuan in IPO in July 2019. In February 2021, the company issued convertible bonds and raised 1.24 billion yuan.

At the end of last year, Jiayuan Technology disclosed its fixed growth plan for the first time. After more than half a year, after several rounds of inquiries and responses, the registration draft was submitted on the evening of June 10.

Jiayuan Science and Technology announcement said that the fundraising project is mainly used for the construction of high-performance lithium copper foil in Guangdong, Shandong, Fujian and other places and the construction of high-end standard copper foil production line in Jiangxi.

After the completion of the fund-raising project, the company will add a new high-performance lithium copper foil production line with an annual output of 46000 tons and a high-end standard copper foil production line with an annual output of 20, 000 tons.

Jiayuan Technology said that after the completion of the above projects, it can effectively enrich the company's product structure, meet the increasing demand for high-performance products from downstream customers, maintain high-quality customer resources, consolidate in-depth cooperation with downstream enterprises to provide capacity assurance, and constantly enhance the company's comprehensive competitiveness.

Among them, the "annual output of 30,000 tons of high-precision ultra-thin electronic copper foil project" located in Liaocheng, Shandong Province, mainly serves Ningde era, BYD and other battery factories; the completion of the "15000 tons of high-performance copper foil project" located in Ningde City will further reduce the cost of transportation and communication between the company and important customers such as Ningde era.

For the construction cycle of the above projects, Jiayuan Technology said that the above projects have started construction. Among them, there are three sub-projects under the "High performance Lithium Copper foil Project", which will be put into production from the end of 2022 to April 2023, followed by the "Electrolytic Copper foil Project". It is expected to start trial operation and gradually put into production in early 2023 and be completed and put into production in September 2024.

Jiayuan Technology said that at present, the downstream demand of the company's products is strong, and it will continue to open up the market in the future, fully absorb the new production capacity and improve the company's performance.

Global supply of copper foil falls short of demand

Public data show that China's PCB copper foil demand is high, but China's PCB copper foil production is mainly low-end products, high-end PCB copper foil is still mainly dependent on imports, resulting in a large number of low-end products export, and a large number of high-end copper foil imports. Customs data show that in 2020, China's PCB copper foil imports were 110700 tons, an increase of 6 percent over the same period last year, mainly high-end high-performance copper foil; exports were 30700 tons, an increase of 13.9 percent year-on-year, mainly low-end copper foil. Therefore, the production of high-performance and high value-added differentiated products is an important direction for the future development of China's electrolytic copper foil industry. China's copper foil industry should change from "quantity" to "quality".

The supply of high-end copper foil falls short of demand, which brings impetus for related enterprises to expand production capacity. In addition to Jiayuan Technology, Hangzhou Power Co., Ltd. announced on May 9 that the company intends to invest about 5 billion yuan in Xiaolan Economic and technological Development Zone, Nanchang City, Jiangxi Province, with a wholly-owned subsidiary Jiangxi Hangdian Copper foil Co., Ltd. to build an ultra-thin copper foil project with an annual production capacity of 50, 000 tons of lithium battery for new energy vehicles, mainly engaged in R & D and production of copper foil for lithium battery from 4.5 micron to 8 micron.

On the evening of May 12, Nord AG announced that the company and the people's Government of Guixi City, Jiangxi Province intend to sign the "Investment Agreement for Ultra-thin Lithium Copper foil Construction Project" to invest in the construction of an ultra-thin lithium copper foil production base with an annual production capacity of 100000 tons. The registered capital of this project is 2.5 billion yuan. According to Nord's plan, the first phase is to build a 50,000-ton ultra-thin lithium copper foil production line, which is scheduled to start construction in 2022, 20,000 tons in 2023 and 30,000 tons in 2024, with a total production capacity of 50,000 tons. The second phase of the project is expected to start construction in 2025.

Huatai predicts that from 2022 to 2023, the global supply and demand of copper foil will continue to fall short of demand in 2021. The global demand for lithium copper foil will be 59.7 and 781000 tons respectively, corresponding to a year-on-year growth rate of about 62% and 31%. The main demand comes from the rapid growth of demand for new energy vehicles and lithium batteries for energy storage. With the continuous upgrading of the requirements of new energy vehicles for mileage and energy density of power battery system, the trend of high energy density of power lithium battery has been determined. The extreme thinning of lithium copper foil is one of the important bases for lithium battery to improve energy density and reduce battery volume. However, the batch production of extremely thin copper foil below 6 μ m is very difficult, and only a few domestic enterprises can achieve mass production.

Oriental Securities believes that the compound growth rate of global lithium copper foil production capacity from 2021 to 2023 is expected to reach 28%, and the overall competition pattern is optimized. By the end of 2021, the total global production capacity of lithium copper foil is about 510000 tons, and the annual compound growth rate of global lithium copper foil production from 2021 to 2023 is expected to reach 28%. Among them, Chinese mainland and South Korea account for 90% of the total production capacity. The new capacity from 2021 to 2023 also mainly comes from these two regions. The global capacity expansion of lithium electricity and copper foil is highly competitive. Domestic Nord shares, Telford Technology and Jiayuan Technology may become the largest variables.