Copper Foil Supply Bottleneck Looms as Demand Outpaces Production

Copper foil, an essential component of lithium batteries, has become a bottleneck in supply due to its growing demand. According to data from SMM, China's lithium battery copper foil demand in 2026 is approximately 1.37 million mt, while the actual stable supply is about 1.35 million mt, leaving a gap of around 20,000 mt.

This shortage will not significantly limit battery production increases this year as enterprise inventory and procurement flexibility still provide buffer room. However, pressure will rise in 2027, with an estimated gap of 40,000 mt, corresponding to the copper foil raw material needed for about 100 GWh of lithium battery cells.

The real test will come next year, and beyond, as demand growth outpaces supply growth. Battery makers that position long-term contracts and capacity binding in advance will gain a clear supply chain flexibility advantage.