Battery aluminum foil demand increasing requires more ceramic foam fitlers
"In this year, the company's battery aluminum foil orders have grown steadily, and the product supply is in short supply. In July, customers temporarily added more orders, and the total order volume reached more than 11,000 tons. Due to the lack of time to adjust the production line, the total shipment volume of battery aluminum foil by the end of July was 9,500 tons, the unfinished products can only be postponed to next month.” Recently, Chen Weixin, secretary of the board of Dingsheng New Materials, told a reporter from Shanghai Securities News that since August, customer orders for battery aluminum foil have further increased, reaching 13,000 tons.
Aluminum foil is an aluminum-rolled material with a thickness of less than 0.2 mm. Battery aluminum foil refers to the lithium battery positive current collector aluminum foil, which is not only the current collector electrode but also the carrier of the lithium battery positive electrode material. In recent years, battery aluminum foil has become the segment with the fastest growing demand among foil products. Huang Wei, deputy general manager and secretary of the board of directors of Wanshun New Materials, said that since the second half of last year, the market demand for battery aluminum foil has grown rapidly, and the market is in short supply.
Chen Weixin said that the current battery aluminum foil market has changed from a tight balance in the first quarter to a shortage. Many institutions believe that the shortage of battery aluminum foil will continue to drive up processing fees. In the future, the production capacity and shipments of major leading companies will further increase, and the scale effect will bring about an increase in the industry's profitability. The upcoming commercial sodium-ion battery will bring new demand growth points for battery aluminum foil. The agency predicts that the global demand for battery aluminum foil will reach 740,000 tons in 2025, with a compound annual growth rate of 37%.
Battery aluminum foil processing costs continue to rise
The pricing of domestic aluminum foil products usually adopts the model of "aluminum price + processing fee". Among them, the processing fee is generally determined by regular discussions between buyers and sellers, which is the core factor for the profitability of aluminum foil manufacturers. The rising and falling trend of processing fees can directly reflect the prosperity of the industry and the market supply and demand.
According to industry insiders, since the second half of last year, the processing fee of battery aluminum foil has risen by 2,000 yuan/ton to 4,000 yuan/ton. Last year, the average processing fee for battery aluminum foil was about 15,000 yuan/ton. In the second half of last year, the market demand for battery aluminum foil increased rapidly, and the average processing fee level of many leading enterprises in the fourth quarter was raised to more than 16,000 RMB/ ton. In the first quarter of this year, the market supply and demand tended to be in a tight balance, and the processing fees of some enterprises rose to 17,000 RMB / ton.
According to statistics from Shanghai Nonferrous Metals Network, as of the end of July, the processing fee for 15-micron lithium battery aluminum foil was 18,000 yuan/ton, while the processing fee for 12-micron aluminum foil reached 20,000 yuan/ton. Qu Jianhui, a senior aluminum foil analyst at Shanghai Nonferrous Metals Network, said that in the future, the processing fee of battery aluminum foil still has room to rise. At present, production costs such as labor and power continue to increase, and it is difficult to increase the yield of aluminum foil for batteries in the short term, and the cost of waste products still occupies the majority. In addition, strong downstream demand is the biggest driving force behind the increase in processing fees.
According to industry insiders, the root cause of the surge in demand for battery aluminum foil is the mismatch between supply and demand. On the one hand, the production and sales of terminal new energy vehicles and the installed capacity of power batteries have grown rapidly; on the other hand, battery aluminum foil products have a certain commercialization cycle and technical threshold, and the production line construction and production speed are slow; for new entrants, R&D, certification, yield, etc. are all difficulties that need to be overcome.
Huang Wei said that there is a certain cycle in the expansion of battery aluminum foil production capacity, and it will take about 3 to 5 years in the middle. First of all, it will take at least 2 years for the new production capacity to be put into construction. If it is a new entrant, it will take more than 3 years to explore the process. Secondly, the products after being put into production also need to be tested and certified by downstream battery factories, and the certification cycle is about half a year to one year.
Listed companies have expanded the production of battery aluminum foil
Benefiting from the increase in processing fees and the continuous increase in production capacity, the profitability of listed companies in the battery aluminum foil industry has increased significantly in the first half of this year.
Dingsheng New Materials expects to achieve a net profit of 510 million to 610 million yuan in the first half of the year, a year-on-year increase of 235.40% to 301.16%. The company said that downstream demand for power battery aluminum foil continued to be strong, and the company continued to accelerate the conversion of traditional production lines to power battery aluminum foil, resulting in a significant year-on-year increase in production and sales, further consolidating the company's market share. In addition, the downstream market demand for traditional packaging aluminum foil is still strong.
Wanshun New Materials expects to achieve a net profit of 115 million yuan to 125 million yuan in the first half of the year, a year-on-year increase of 531.54% to 586.45%. The company said that benefiting from the strong downstream market demand for aluminum foil, coupled with the release of the production capacity of Sun's Anhui Zhongji Phase I high-precision electronic aluminum foil production project with an annual output of 40,000 tons, the profitability of the company's aluminum processing business has been significantly improved.
In addition, listed companies such as Dongguang Sunshine and Mingtai Aluminum all achieved performance growth in the first half of the year.
The reporter learned that in the future, leading enterprises will further accelerate the construction and release of production capacity. With the general increase in shipments, the scale effect may bring about a substantial increase in the industry's profitability.
Chen Weixin said that Dingsheng New Materials is expected to ship 120,000 tons of battery aluminum foil in 2022. In terms of production capacity, the annual production capacity of battery aluminum foil is expected to reach 150,000 tons in the fourth quarter.
In addition to increasing shipments, Dingsheng New Materials will further increase its production capacity. The company recently announced that it plans to raise no more than 2.7 billion yuan, and the net raised funds after deducting issuance expenses will be used for projects with an annual output of 800,000 tons of battery foil and supporting blanks, as well as projects to supplement working capital. Sinolink Securities believes that after the completion of this project, it is expected to add 600,000 tons of blank production capacity and 200,000 tons of finished battery foil production capacity.
Huang Wei said that the Anhui Zhongji production base of Wanshun New Materials is mainly based on battery aluminum foil, and the 72,000-ton high-precision electronic aluminum foil production project is under construction. It was launched at the end of last year and is planned to be put into production next year. In addition, the company is preparing to build a power and energy storage battery foil project with an annual output of 100,000 tons in Anhui Zhongji. After the project is completed, it will form a total production capacity of 255,000 tons of aluminum foil.
Yirui New Materials, a subsidiary of Mingtai Aluminum, has an annual output of 700,000 tons of green new aluminum alloy materials, including power battery materials, battery aluminum foil billets, and other sub-products. The relevant person in charge of Mingtai Aluminum said that this project is progressing smoothly and will contribute about 50,000 tons of finished product production capacity this year.
Tianshan Aluminum stated on the investor interaction platform on July 27 that according to the development strategy, the company entered the field of battery aluminum foil, and deployed a 200,000-ton power battery foil production line project in Jiangyin, Jiangsu, and a supporting layout of 300,000 tons of aluminum foil in Shihezi, Xinjiang. For the billet project, the products will be mainly used in the positive and negative current collectors of lithium batteries and the positive and negative electrodes of sodium batteries.
Sodium-ion batteries become a new outlet for aluminum foil
At present, the mass production of sodium-ion batteries is gradually approaching. The industry generally believes that with the official commercialization of sodium-ion batteries, the demand for battery aluminum foil will further expand.
Different from lithium-ion batteries, because sodium and aluminum are not easily alloyed, in sodium-ion batteries, aluminum foil can be used instead of copper foil for positive and negative current collectors, reducing the cost by nearly 70%. This means that sodium-ion batteries will bring new demand growth points for aluminum foil.
Chen Weixin said that the demand for aluminum foil is 330 tons to 350 tons based on 1 GWh of lithium-ion batteries. In the future, compared with lithium-ion batteries, the amount of aluminum foil used in sodium-ion batteries will at least double, and the demand for aluminum foil per GWh will be 600 to 700 tons.
According to EVTank's calculations, with a 100% penetration rate of sodium-ion batteries, the market space in 2026 will reach 369.5 GWh. Considering that the battery aluminum foil consumption of sodium-ion batteries is about 800 tons/GWh, the battery aluminum foil consumption will reach 295,600 tons in 2025.
Zheshang Securities believes that the shortage of battery aluminum foil will continue until at least 2023. From 2022 to 2023, the overall supply and demand of battery foil will maintain a tight balance. Global battery foil production is expected to reach 320,000 tons in 2022 and 483,000 tons in 2023. In terms of demand, it will be 331,000 tons and 488,000 tons in 2022 and 2023, respectively. Therefore, there will be a demand gap of 11,500 tons in 2022, and a demand gap of 4,800 tons in 2023, basically maintaining a tight balance between supply and demand. Until 2024, the supply of battery aluminum foil will increase, and the current tight supply and demand pattern will not be relieved.
The thinning of battery aluminum foil is also a major development trend. At present, the thickness of the mainstream power battery aluminum foil is about 12 microns to 15 microns. Chen Weixin said that the thinning trend of battery aluminum foil should consider its elongation, high tensile strength, and other properties, and the technical requirements are higher. The company actively promotes the technical reserves of thinning aluminum foil. In the field of power batteries, the company's 12-micron aluminum foil products have leading performance. The company is the only manufacturer in China to achieve mass production of 10-micron aluminum foil. In the field of digital consumer batteries, the company is the only domestic manufacturer that has achieved mass production of 9-micron and 8-micron aluminum foils.
Along with Na batteries replacing Lead-zinc batteries, the aluminum foils demand will increase. Meanwhile, the requirement of pure of aluminum foil will remarkable increasing, in which factories will need more high-quality ceramic foam filters. Adtech will continuously focus on the aluminum purification industry by supplying high-quality aluminum degassing units, ceramic foam filters, caster tips, and other products.