According to an SMM survey, the operating rate of copper foil enterprises in July 2024 was 66.28%, down 5.75 percentage points MoM and 15.94 percentage points YoY. Specifically, the operating rate for large enterprises was 69.32%, for medium-sized enterprises 55.37%, and for small enterprises 62.43%. In different sectors, the operating rate for electronic circuit copper foil was 73.02%, down 7.93 percentage points MoM and 3.31 percentage points YoY, while the operating rate for lithium battery copper foil was 62.61%, down 4.56 percentage points MoM and 23.32 percentage points YoY. The overall operating rate for the copper foil industry in August is expected to continue to decline to 65.23%. (Survey coverage: 35 companies, 58 production bases, total capacity: 1.5156 million mt)
July Copper Foil Operating Rate at 66.28%
The domestic copper foil operating rate in July saw a significant decline due to multiple factors: Firstly, the slowdown in end-user demand across various industries. For lithium battery copper foil, the demand for anode materials slowed as battery cell and anode producers had already built up some inventory during the peak season. Although orders from the EV sector were moderate, demand from the energy storage sector weakened after the year-end grid connection deadline. For electronic circuit copper foil, most end-user sector orders were weak, with the home appliance and consumer electronics industries in the off-season. Only orders of AI and high-end HDI, which account for a relatively small share of consumption, performed relatively well. Secondly, the decline in copper prices in July. As the copper foil industry mostly adopts the M-1 monthly average copper price for settlement, the lower and highly volatile copper prices in July significantly reduced downstream stocking demand. Additionally, companies adjusted their production pace. In Q2, driven by improved market demand and a rebound in copper foil processing fees, copper foil enterprises quickly resumed production. However, with the fluctuation in copper prices and weakening market demand in Q3, copper foil processing fees came under pressure again, forcing some companies to control their production pace.
July Copper Foil Industry Raw Material and Finished Product Inventories Both Increased
In July, the finished product inventory/output ratio in the copper foil industry rose by 4.53 percentage points MoM to 19.87%. Due to the slowdown in end-user orders, finished product inventories increased. Meanwhile, the raw material inventory/output ratio rose by 1.31 percentage points MoM to 18.27% due to the decline in copper prices.
August Copper Foil Industry Operating Rate Is Expected to Decline to 65.23%
SMM expects that in August 2024, the overall operating rate of copper foil enterprises will be 65.23%, down 1.05 percentage points MoM and 20.10 percentage points YoY. The operating rate for lithium battery copper foil in August is expected to be 62.42%, down 0.18 percentage points MoM and 23.15 percentage points YoY; the operating rate for electronic circuit copper foil is expected to be 70.39%, down 2.63 percentage points MoM and 14.96 percentage points YoY. For lithium battery copper foil, companies will continue to control their production pace due to pressure on processing fees; for electronic circuit copper foil, end-user sectors with a high consumption share remain in the off-peak season. Additionally, as of now, the significant decline in copper prices in August continues to suppress downstream orders.
