SK Nexilis and Lotte Energy Materials Adjust Copper Foil Production Amid Market Shifts

SK Nexilis and Lotte Energy Materials Adjust Copper Foil Production Amid Market Shifts

Reduced Operation Rates and Market Challenges

South Korea’s leading copper foil producers, SK Nexilis Co. and Lotte Energy Materials Corp., have reported reduced operation rates in their factories due to intense price competition and a slowdown in electric vehicle (EV) demand. SK Nexilis, a subsidiary of SKC Ltd., saw its factory operation rate drop to 61.6% in Q3 from 88.1% in 2022, while Lotte Energy Materials experienced a decrease to 59.5% from 89.5%.

Strategic Expansion in Malaysia

Despite the current market downturn, both companies are expanding their production capacities in Malaysia. This move aims to reduce manufacturing costs, leveraging Malaysia’s lower electricity rates, which are about half of those in South Korea. SK Nexilis has already initiated commercial production at its new facility in Malaysia, noted for being the world’s largest copper foil production line.

Anticipating Long-Term Demand Recovery

The companies are preparing for a medium to long-term resurgence in demand, despite forecasts of copper foil oversupply through 2025. This strategic expansion in Malaysia positions them to better respond to future market recoveries.

Legal Developments and Industry Competition

In the midst of these changes, SK Nexilis has filed a lawsuit against Solus Advanced Materials Co. and its subsidiary, alleging patent infringement related to copper foil technology. This legal action highlights the competitive nature of the industry and the importance of technological advancements in copper foil production.

Industry Outlook

The global copper foil industry, essential for EV batteries, faces immediate challenges with oversupply and competition. However, strategic moves by leading players like SK Nexilis and Lotte Energy Materials indicate a focus on long-term opportunities and technological innovation. icon

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