In the short term, since traditional copper foil is still in the overcapacity stage, the impact of rising copper prices on the profitability of traditional copper foil companies is limited.
The Zhitong Finance App learned that Huatai Securities released a research report saying that copper prices have recently risen sharply due to tight copper concentrate production and expectations that smelters will cut production. For batteries, direct materials, mainly copper, account for more than 80% of the cost of traditional copper foil. Theoretically, rising copper prices will affect the cost and price of copper foil, thereby affecting battery costs. The bank believes that in the short term, since traditional copper foil is still in the overcapacity stage, the impact of rising copper prices on the profitability of traditional copper foil companies is limited. In the medium to long term, in the context of rising copper prices, composite copper foil is an important direction for reducing the cost of copper foil. The bank estimates that the mass production rate of composite copper foil is 85%. The price of copper is above 46,000 yuan/ton, and its cost may be lower than traditional copper foil.
Huatai Securities's views are as follows:
The sharp rise in copper prices caused short-term disturbances, and the industrialization of composite foil is getting closer
Recently, copper prices have soared, and the market's attention to composite foil has once again increased. In this report, the bank updates the sector to discuss the development opportunities of composite copper foil in the context of rising copper prices, the current judgment on the pace and market space of composite foil, and the current progress of composite foil companies. The bank's conclusion is that in the medium to long term, composite copper foil is an important way to reduce the cost of traditional copper foil against the backdrop of rising copper prices, the trend remains unchanged. The bank believes that reducing the cost of composite copper is the winner of industrialization. Composite aluminum foil is one of the key channels for improving battery safety. It continues to be optimistic about the alternative trend of composite foil to traditional foil. It is recommended to continue to track downstream testing and mass production, and be optimistic about foil companies that cooperate closely with downstream battery companies and are expected to receive priority orders.
How do you view the relationship between copper price and composite copper foil
Recently, copper prices have risen sharply due to tight copper concentrate production and expectations that smelters will cut production. For batteries, direct materials, mainly copper, account for more than 80% of the cost of traditional copper foil. Theoretically, rising copper prices will affect the cost and price of copper foil, thereby affecting battery costs. The bank believes that in the short term, since traditional copper foil is still in the overcapacity stage, the impact of rising copper prices on the profitability of traditional copper foil companies is limited. In the medium to long term, in the context of rising copper prices, composite copper foil is an important direction for reducing the cost of copper foil. The bank estimates that the mass production rate of composite copper foil is 85%. The price of copper is above 46,000 yuan/ton, and its cost may be lower than traditional copper foil.
How do you view the market space of composite foils
In terms of composite aluminum foil, the application scale of composite aluminum foil is expected to reach 3-5 GWh in 24 years, mainly for medium- and high-priced passenger car applications by leading battery companies at home and abroad. Moreover, it will stay in the industry for a long time. In terms of composite copper foil, the bank is expected to be mass-produced and applied at the battery level by the end of 24. Continued rise in copper prices is expected to affect the progress of industrialization. Its industrialization requires dynamic observation, and it is expected to reach mass production applications of 10 GWh or more in 25 years. The bank expects the market space for composite copper foil to be 47.4 billion in 2027, with a CAGR of 556% in 24-27; the market space for composite aluminum foil is 201 billion, and a CAGR of 267% in 24-27.
Industry progress update: Composite aluminum foil starts, composite copper foil is expected to be mass-produced in the second half of the year
1) Composite aluminum foil: Under the demand for high-safety alternatives, the downstream application of composite aluminum foil has begun. The bank expects to start downstream production this year, and more companies will achieve mass production and application breakthroughs. Representative companies include Jinmei New Materials, Ammett, and British Union (002846.SZ). 2) Composite copper foil: The noise in the market has faded away, and various companies are steadily advancing testing and application implementation. The bank believes that the material process route is expected to be more clear this year, and the material level is expected to be mass-produced in the second half of the year, representing foil companies Jinmei New Materials, Putailai (603659.SH), Baoming Technology (002992.SZ), Yinglian Co., Ltd., Yangzhou Nali, Nord (600110.SH), etc. 688388.SH
Risk warning: NEV sales fall short of expectations, industrial chain profits fall short of expectations; composite foil industrialization progress falls short of expectations; technological route innovation.