[Click eStock] "Lotte Energy Materials, Strategic Advantage with U.S. Plant... Core Potential in Global Copper Foil Market"

On August 20, Hanyang Securities analyzed that Lotte Energy Materials is regaining attention in the global copper foil market.

Lotte Energy Materials has a total production capacity of 80,000 tons, with bases in Iksan, South Korea, and Malaysia. The company counts global top-tier battery manufacturers such as Samsung SDI, LG Energy Solution, Northvolt, and CATL among its clients.

Lee Joonseok, a researcher at Hanyang Securities, stated, "The company has proven its technological reliability as a global copper foil specialist," adding, "In particular, as of the first half of this year, copper foil for ESS accounts for about 15%, and growth is expected as demand expands in the future."

The company’s performance in the second quarter was somewhat sluggish. Sales amounted to KRW 204.9 billion, down 22% year-on-year, and it posted an operating loss of KRW 31.1 billion, turning to a loss. However, due to increased utilization from higher sales volume, the operating loss was reduced by about KRW 15 billion compared to the previous quarter. Researcher Lee noted, "The utilization rate rose from 43.9% in the first quarter to 48.1% in the second quarter, up 4.2 percentage points," and added, "With proactive inventory adjustments, utilization is expected to rise further in the second half of the year."

The copper foil industry is currently presenting opportunities for domestic companies. Of the global capacity of around 2.4 million tons, China accounts for 80%, but due to limitations in quality reliability, global battery makers are seeking to diversify their suppliers. In addition, U.S. tariffs and IRA policies are creating a favorable environment for companies from Korea, Japan, and Europe. Researcher Lee said, "Domestic companies equipped with ultra-thin copper foil technology are expected to expand their market share."

Lotte Energy Materials is also seeking to secure a strategic advantage by establishing a plant in the United States. This is considered a key initiative to avoid tariffs, benefit from IRA subsidies, and respond to strong demand from global clients. However, copper price volatility, the burden of large-scale investments, and customer concentration could pose short-term risks. Nevertheless, the structural growth of the global copper foil market, entry barriers for Chinese companies, and increasing demand for copper foil for AI accelerators are seen as positive factors.

Researcher Lee predicted, "If localization in North America accelerates in the future, both revenue growth and margin stabilization will be possible," and added, "The company has the potential to evolve beyond a simple material supplier into a core player in the global battery supply chain."

This content was produced with the assistance of AI translation services.