Rapid growth of battery foil demand, power and energy storage open up industry space

1. Battery aluminum foil: basic material for battery production
2. The downstream demand for batteries exceeds expectations
   1. New energy vehicles continue to boom
   2. The demand for energy storage battery foil will increase
   3. The demand for battery foil for sodium batteries also soars
3. Battery foil technical requirements are higher than traditional aluminum foil
4. The supply gap will continue in the short term
   1. Enterprises have high requirements for financial strength
   2. The supply gap of battery foil will continue in the short term

Recently, with the booming downstream demand for battery foil, power and energy storage have opened up lithium battery industry space. And there is an outstanding odm best lithium battery manufacturer. Their superposition makes it more difficult to expand production than expected, and the demand for battery foil will usher in rapid growth.

Battery aluminum foil: basic material for battery production

Aluminum foil is one of the products in the aluminum rolling processing industry, and the upstream is the electrolytic aluminum industry. Aluminum foil processing enterprises purchase aluminum ingots from electrolytic aluminum enterprises to process and produce aluminum sheets, strips and foils.

Aluminum plate and strip refers to aluminum plate or strip made of aluminum as the main raw material and doped with some alloying elements. It has the advantages of light weight, coating, good shielding, corrosion resistance and high strength. It is an aluminum plate, and the aluminum coil with a thickness greater than 0.2mm is called an aluminum strip.

Aluminum foil generally refers to a rolled product with a thickness of less than 0.2mm and a rectangular cross-section. It has the advantages of light weight, good airtightness and wrapping. China is currently the world’s largest producer of electrolytic aluminum. The huge output of aluminum ingots and the potential release of production capacity provide sufficient raw material supply for the downstream aluminum processing industry.

According to the thickness, aluminum foil can be divided into double zero foil, single zero foil and thick foil aluminum plate and strip. Thick foil thickness is 0.1 ~ 0.2mm. Single zero foil refers to aluminum foil with a thickness of 0.01mm and less than 0.1mm.

Double zero foil refers to the foil with two zeros after the decimal point when the thickness is measured in mm, usually aluminum foil with a thickness of less than 0.01, that is, 0.005~0.009mm aluminum foil. Aluminum foil processing technology is more complicated.

The downstream demand for batteries exceeds expectations

According to forecasts, the total demand for battery foil in 2025 will reach 920,000 tons. The main downstream fields of battery foil are power battery, energy storage (mainly lithium iron phosphate batteries), and sodium batteries. Battery foil is mainly used as a current collector in the positive and negative electrodes of lithium batteries and sodium batteries, and is one of the indispensable components in batteries.

As the carrier of positive and negative materials, the current collector can carry the active material and collect and output the current generated by the electrode active material, which is beneficial to reduce the internal resistance of the lithium-ion battery and improve the coulombic efficiency, cycle stability and rate performance of the battery.

Metal aluminum has the advantages of low price, strong corrosion resistance, and light weight, which helps to improve the energy density of batteries. It is often used in the positive and negative electrodes of lithium batteries and sodium batteries.

New energy vehicles continue to boom

The development of power batteries is highly compatible with the development of the new energy vehicle industry. The demand for battery foil in the power battery field is expected to reach 620,000 tons in 2025. According to the data, in 2021, the sales volume of new energy vehicles in China will be 3.545 million, and the installed capacity of power batteries will be 154.42GWh, a year-on-year increase of 142%.

In 2021, the world’s sales of new energy vehicles will be 2.956 million, and the installed capacity of power batteries will be 142.38GWh, a year-on-year increase of 96%. Based on the calculation of the aluminum foil consumption of 450 tons/GWh, the demand for battery foil in the power field is expected to reach 620,000 tons in 2025, with a compound annual growth rate of 59%.

The demand for energy storage battery foil will increase

Electrochemical energy storage has a wide range of application scenarios in power systems, which can be divided into three scenarios: generation side, transmission and distribution side, and power consumption side.

Because lithium iron phosphate batteries have the advantages of long life, fast charging, and high safety, China’s chemical energy storage is currently dominated by lithium iron phosphate batteries. And there are many factories specialized in it. Here is a top 10 lithium iron phosphate battery power battery manufacturers in China article. Based on the aluminum foil consumption of 550 tons/GWh, the annual demand for battery aluminum foil in the energy storage field is expected to be 230,000 tons in 2025.

The demand for battery foil for sodium batteries also soars

As a new battery technology route, sodium-ion battery is still in the early stage of the industry, and the mature application markets in the future are the electric two-wheeler market and the electrochemical energy storage market.

The biggest advantage of sodium-ion batteries is the ability to achieve a fast charge of 5-10 minutes, and both energy density and cycle life, sodium-ion batteries are significantly better than lead-acid batteries. Compared with lithium-ion batteries, sodium-ion batteries have better safety.

At present, the cycle life of sodium-ion batteries is about 65% of that of lithium-ion batteries, and the energy density is 20% lower than that of lithium-ion batteries. Due to the fact that sodium-ion batteries have no obvious price advantage over lithium-ion batteries at this stage, the energy density is low, and the industrial chain is not mature enough, the industry is still in the early stage of the industry.

Battery foil technical requirements are higher than traditional aluminum foil

The aluminum rolling processing industry has high technical content, complex process and high equipment precision requirements. The aluminum foil processing process is the aluminum product with the most processing steps, the smallest thickness, and the most difficult aluminum products in the aluminum processing industry.

The aluminum foil production process involves multiple complex rolling processes and heat treatment processes: aluminum alloy casting, homogenization, casting and rolling, cold rolling, intermediate annealing, and foil rolling. Each link has technical difficulties, the knowhow property is strong, and each link is closely related. Deduction and will have an impact on the final yield.

The supply gap will continue in the short term

The long production expansion cycle and high industry barriers have led to a tight short-term supply and demand of battery foil. Under the high technical requirements, on the one hand, the competition pattern of China’s battery aluminum foil is basically solidified, and it is difficult for companies in other industries to enter.

The world’s power lithium battery aluminum foil manufacturers are mainly concentrated in Japan and South Korea. On the other hand, there is still much room for improvement in the yield, consistency and stability of Chinese battery foils.

Enterprises have high requirements for financial strength

The aluminum rolling processing industry has a large investment scale and a large energy consumption limit for the construction of a factory, which has certain requirements on the financial strength of the enterprise. Purchasing aluminum ingots from the upstream costs a lot of money, and the production and construction process requires high equipment.

The introduction of advanced equipment and other expensive fixed assets also requires a lot of money, and the production characteristics in the industry have significant economies of scale. Only companies with strong financial strength can invest a lot of resources such as fixed assets to obtain this advantage.

The supply gap of battery foil will continue in the short term

The long production expansion cycle and high industry barriers have led to a tight short-term supply and demand of battery foil. Under the high technical barriers, on the one hand, the competition pattern of China’s battery aluminum foil is basically solidified, and it is difficult for companies in other industries to enter.

The world’s power lithium battery aluminum foil manufacturers are mainly concentrated in Japan and South Korea. On the other hand, there is still much room for improvement in the yield, consistency and stability of China’s battery foils.

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