According to preliminary statistics by SMM, China's aluminum plate/sheet and strip production in 2024 is expected to reach 13.1 million mt, an increase of about 692,000 mt, with a growth rate of approximately 6%. Aluminum foil production is expected to reach 4.8 million mt, an increase of about 336,000 mt, with a growth rate of approximately 8%.
In 2024, the production of aluminum plate/sheet, strip and foil products such as can stock, battery foil, double-zero foil, auto body sheet, air-conditioner foil, brazing material, and electronic foil is expected to achieve positive growth. Although the growth rate of battery foil production is expected to slow down again, it still leads among aluminum plate/sheet, strip and foil products.
According to SMM statistics, in recent years, both battery foil production and the number of producers have increased annually, but both have shown signs of slowing growth. Meanwhile, the market share of leading enterprises has shown a trend of "high concentration - dispersion – re-concentration.“
SMM believes that the changes in the number of battery foil enterprises and the market share of leading enterprises are in line with the development trend of the battery foil industry in recent years: In 2021-2022, the battery foil market was in short supply with high profits, attracting many aluminum foil enterprises to join the market, leading to a rapid increase in the number of enterprises and a decrease in the market share of leading enterprises. Starting in 2023, with the completion of the commissioning of a large amount of new capacity, the battery foil market shifted to oversupply, intensifying competition and reducing profits. Some less competitive enterprises suffered heavy losses in the battery foil market, reducing battery foil production, leading to a rebound in the market share of leading enterprises.
In 2024, there are about 26 enterprises capable of stable mass production of battery foil, among which about 5 have reduced production, 8 have increased production, and 13 have seen little YoY change in production. Currently, competition in the battery foil market remains fierce. Among the more than 20 producers, most have profits close to zero or are even operating at a loss. More enterprises may reduce battery foil production or even exit the market in 2025. The hot topic of battery aluminum foil is gradually fading, and the industry competition landscape may shift to dominance by a few enterprises.
Data on new capacity for domestic aluminum plate/sheet, strip and foil compiled by SMM also shows that the investment fever in battery foil seems to have cooled. Currently, only a few capacities are still under construction, with almost all planned to be completed in 2025.
Secondary aluminum plate/sheet and strip has become a new investment hot topic. Of the 1.96 million mt of new capacity invested in 2024, about 1.1 million mt is related to secondary aluminum plate/sheet and strip, and many enterprises have expressed intentions to invest in this area.
According to SMM statistics, in 2024, about 22 aluminum plate/sheet, strip and foil enterprises will be able to add secondary aluminum in bulk during production. Most products made with secondary aluminum are used for automotive or packaging-related products. In 2024, the usage of secondary aluminum in the aluminum plate/sheet, strip and foil industry is expected to reach around 2.2 million mt. Both the usage of secondary aluminum and the number of enterprises are growing at about 40%.
Overall, the demand for aluminum plate/sheet, strip and foil in both domestic and overseas markets in 2024 is higher than in 2023. However, due to excessive new capacity and frequent overseas trade frictions, the survival status of most enterprises has not significantly improved. Although Europe and the US have entered interest rate cut cycles to stimulate the economy, and China has introduced a series of policies to boost consumption, injecting some optimism into the market, the industry is expected to continue struggling with "insufficient orders and low processing fees" in 2025 under the backdrop of surplus capacity. For the vast majority of aluminum plate/sheet, strip and foil enterprises, cautious investment, reasonable bidding, and focusing on quality remain the best strategies.
