aluminum household foil---the rising logic you never noticed

1. Price increase
Double zero foil (aluminum foil with a thickness of less than 10 microns) has completed the first round of processing fee increase this year, and the increase range is between 500-1500 yuan. The second round of price increase is under negotiation, and the price increase is about 500 yuan. It is expected that at the end of this year or early next year, when the supply agreement is signed, there will be a third round of price increases. The foreign processing fee is currently about 100 US dollars higher than the domestic processing fee.

2. Large market gap
The market predicts that the supply gap of high-end foil (double zero aluminum foil + battery foil) will be about 150,000 tons in 2025, and the gap will increase year by year. At present, the global output of high-end foil is about 1 million tons, and my country's output is about 600,000 tons, accounting for more than 60% of the world. By 2025, global battery foil demand will increase by 300,000 tons, and double zero foil demand will increase by 150,000 tons, for a total of 450,000 tons. By 2025, there will be 38 new rolling mills worldwide (including 20 foreign ones), corresponding to about 270,000 tons of high-end foil production capacity. Taking into account the increase in equipment utilization, the production capacity will be increased by 30,000 tons, and the total production capacity will be 300,000 tons.

3. High industry access
① The yield rate of battery foil is low. The company's double zero aluminum foil comprehensive yield rate has reached 91%, while the yield rate of the first-class battery foil company in the industry is only over 70%, and the battery foil yield rate will be much lower than that of the double zero foil. The factors that affect the cost rate are: (1) technical level; (2) equipment level, (3) management level. The management level and the rolling mill level jointly determine the consistency of product quality, and the technical level determines the yield rate. Among them, the management level is more important. ② Time barrier: It takes at least 3 years for domestic new entrants and at least 4.5 years for overseas entrants. Taking into account the manufacturing cycle of the equipment, it takes two and a half years to complete the construction period and commissioning. The next half year is the product introduction period, and it is good to be able to increase the volume in the shortest three years. If the battery foil is made abroad, it will take at least 4.5 years. Therefore, the industry's first-mover advantage is very strong, because the next 2-3 years will be a period of explosive demand, and now the start of construction will miss the explosive period. It is difficult to switch from double zero foil to battery foil. ③ Difficulty in conversion: Double zero foil is currently profitable, and it is expected that future profit will be good. However, it takes time to convert to battery foil, and there is a strong uncertainty about whether the product can reach production. If the product quality is not good or the yield rate is not high after conversion, not only will the profit of double zero foil be missed, but also the battery foil may be lost. Lose big money. There are many such phenomena in the industry: After the production capacity of double zero foil battery foil is put into production, the production line is permanently shut down due to problems such as product quality, stability, and yield.
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