In October 2020, China's electric vehicle production and sales both exceeded 160,000, a record high in a single month in October. Since November, the market of new power car companies has performed strongly. Tesla, Ideal Motors, NIO, Xiaopeng Motors, BYD and other markets have enjoyed active transactions, and the electric vehicle industry chain has once again become a market hotspot. As an indispensable basic material for lithium batteries, driven by the booming production and sales of new energy vehicles and the strong demand for new infrastructure such as 5G, copper foil has opened a new round of price increases, once again being focused by the market.
Copper foil has high conductivity, strong stability, soft texture, and high adhesion to the negative electrode material. It is recognized as the first choice for the current collector of lithium battery negative electrode material. Looking at the technical route deduction of lithium battery copper foil, rolled copper foil is gradually replaced by electrolytic copper foil with high production efficiency and low cost due to the limitation of processing technology. In 2019, China's total electrolytic copper foil production capacity was 534,000 tons and the total output was 431,000 tons, a year-on-year increase of 15.0% and 9.0% respectively.
Thinner copper foil has lower resistance, while reducing battery weight and increasing the energy density of lithium-ion batteries. According to industry insiders, downstream customers continue to increase performance indicators and cost requirements for lithium battery materials, driving the transformation of China's lithium battery copper foil industry from quantity to quality. High-performance ultra-thin lithium battery copper foil will become the mainstream development direction in the future.
On November 26, China's leading high-end copper foil manufacturer, GDCH Technology Group invested and constructed the "8000 tons of high-precision electronic copper foil project (Phase II) production ceremony" and "6 million high-end core boards per year" The groundbreaking ceremony of the "Project" and the groundbreaking ceremony of the "20 thousand tons of high-precision ultra-thin lithium battery copper foil project" was officially launched.
High-end copper foil is a differentiated product with high added value, and has significant demand in 5G communications, new energy vehicles and other fields. CATL first started switching 6μm copper foil in 2018 and has achieved a penetration rate of more than 90%. Lithium battery manufacturers such as BYD and Guoxuan Hi-Tech [Volkswagen China Lithium Battery Joint Venture] are also actively introducing 6μm copper foil through ultra-thin copper foil. Improve energy density and seek differentiated competition. In 2019, the market penetration rate of 6μm lithium copper foil for power batteries was only 30%. In the next 3-5 years, demand growth will exceed 50%. It is estimated that by 2023, the market penetration rate of 6μm lithium battery copper foil will reach 100%, the global market demand is about 225,000 tons, and the market prospect is broad.
On the supply side, currently only a few manufacturers in China have high-performance ultra-thin lithium copper foil production capabilities, and technical bottlenecks have also made it difficult to achieve large-scale mass production. GDCH's R&D technology is at the forefront of the industry. In 2020, the company successfully developed 4.5μm lithium battery copper foil products, and VLP copper foil has been produced on a small scale. At present, it has the manufacturing technology for producing class III, HTE, RTF, VLP and dual-light 8μm, 6μm, 4.5μm and other electrolytic copper foils. The performance of high-frequency and high-speed copper foil products is basically the same as that of foreign imports. The three projects put into production this time will greatly improve the supply and demand gap of high-end lithium batteries.
After the 8,000-ton high-precision electronic copper foil project (phase II) is put into production, GDCH will have a copper foil production capacity of 20,000 tons/year, which is expected to increase the output value by 700-800 million yuan/year. The annual output of 6 million pieces of high-end core board project is committed to improving the company's FR4-HDI special sheet and high-frequency copper clad laminate manufacturing capacity and automation level. After reaching the production capacity, it will increase the annual output of 5.5 million sheets of FR4-HDI special sheet production and 500,000 sheets. The production value of frequency-frequency copper clad laminates will increase to 800 million yuan per year. By then, the company’s copper clad laminate production capacity will increase to 18-20 million sheets per year. The project with an annual output of 20,000 tons of high-precision ultra-thin lithium battery copper foil has a total investment of 1.5 billion yuan, and an output value of 2 billion yuan per year can be achieved after it reaches full capacity.
In October this year, GDCH announced a non-public issuance plan. It plans to issue no more than 279 million shares to no more than 35 specific investors, and raise funds no more than 1.8 billion yuan, mainly for the construction of 10,000 tons of high-precision ultra-thin lithium battery copper foil Project, annual output of 6 million high-end core boards, annual output of 7 million square meters FCCL project, supplement of working capital and repayment of bank loans. GDCH said that as one of the leading companies in the copper foil industry, the company will firmly grasp the industry development trend, actively integrate industry chain resources, promote product structure upgrades, and strive to achieve import substitution in the high-end copper foil field, and build the company into a global high-precision copper foil industry Leading enterprise.