Korean producers of copper foil, an essential material for electrical vehicle (EV) batteries, have begun to expand production facilities in line with rising demand. However, as Korean battery makers have begun to expand their production facilities, copper foil supply may not be able to keep up with demand for now, some experts say.
Korean copper foil companies such as KCFT and Iljin Materials will expand capacity to meet demand for copper foil.
KCFT is expected to increase its annual copper production from 20,000 tons to 30,000 tons next year through the expansion of its plant in Jeongeup, North Jeolla Province.
Iljin Materials is also expected to produce 45,000 tons of copper foil next year as its new plant in Malaysia will begin to operate. The company production volume is 25,000 tons this year.
But some experts forecast that even though copper foil producers has begun to expand their production facilities, a supply shortage will continue for some time. Korean battery makers, including LG Chem, Samsung SDI, and SK Innovation, are expected to add 50 GWh production capacities next year. Assuming that an average of 500 tons of copper foil is needed per 1 GWh, an additional 25,000 tons of copper foil are needed.
If capacity expansion is completed as planned, Korean copper foil makers will be able to produce about 40,000 tons of copper foil additionally next year, including 20,000 tons from Iljin Materials, 10,000 tons from KCFT and 10,000 tons from Doosan Solus.
However, plants of Iljin Materials and Doosan Solus will be able to operate 100 percent only in the second quarter of next year. Considering the initial stabilization period, the Korean copper foil makers will be able to barely produce an additional 25,000 tons.
Moreover, as Iljin Materials will supply copper foil not only to Korean battery makers but also to BYD and CATL in China, competition to secure copper foil is expected to intensify among battery makers next year.
Currently, global EV sales stand at 265,000 units, accounting for 4.0 percent of the entire automotive market. But if EV makers heat up competition with new model launches, the imbalance in the supply and demand of copper foil can deepen, experts say. Copper market watchers predict that demand for copper foil will soar from 34,000 tons in 2018 to 385,000 tons in 2025.