Dongwu Securities: It is expected that global demand for lithium batteries will increase by about 35% in 2026, and the copper foil sector is expected to see both quantity and profit rise.

Dongwu Securities research report pointed out that global lithium battery demand is expected to increase by about 35% in 2026 and 25%+ in 2027, corresponding to global lithium battery copper foil demand of 1.63/1.97 million tons. On the supply side, the downward cycle of lithium battery copper foil processing fees has continued for 4 years, with low willingness of manufacturers to expand production. In 2026, global effective capacity of lithium battery copper foil increased by only 210,000 tons to 1.75 million tons, and in 2027, it increased by 230,000 tons to 1.98 million tons. The capacity utilization rate was 93% in 2026 and increased to 100% in 2027, leading to a tightening supply and demand situation. From a profit perspective, since the beginning of the year, processing fees for second-tier customers have been raised by 1,500-2,000 yuan/ton, with profits per ton reaching 2-3 thousand yuan. Considering a capex investment of 400-500 million yuan for 10,000 tons, the reasonable target profit per ton for manufacturers is 8,000 yuan. Negotiations with downstream customers are ongoing, and it is expected that profit per ton in 2027 may increase to 6-8 thousand yuan. We are optimistic about the dual increase in volume and profit of the copper foil sector and recommend increasing holdings in the copper foil sector.