Surging demand for AI data center ESS and U.S. decoupling policies shift supply dynamics
Q2 copper foil revenue jumps 63%; additional price hikes for 2027 under discussion
Solus Advanced Materials announced on the 19th that it has raised the selling prices of its battery copper foil—an essential ultra-thin copper component used to collect current in battery cathodes for EVs and ESS—by more than 50% for major global clients in the fourth quarter. The move reflects shifting pricing power in the copper foil market, driven by rising demand for energy storage systems (ESS) tied to artificial intelligence (AI) data centers and intensified U.S. supply chain policies aimed at excluding China. Despite growing sales volume, the company has remained in the red, but it is now targeting a turnaround to profitability next year on the back of these price increases.
Rising Copper Foil Prices Driven by ESS Demand and China Exclusion Policies
The price hike is underpinned by shifts in global battery demand. Copper foil demand, previously concentrated on electric vehicles, is expanding into AI data center ESS, opening up new revenue streams.
U.S. regulatory curbs on Chinese battery materials are also playing a role. As securing alternative supply chains to replace Chinese vendors becomes critical, pricing leverage is improving for copper foil manufacturers with production facilities in North America and Europe.
Major domestic rivals are similarly pursuing price increases for select clients, signaling a broader industry-wide push toward price normalization, including higher processing fees.
Solus Advanced Materials operates production bases in Hungary, Europe, and Canada, North America. The Canadian plant, in particular, serves as a crucial production hub for establishing a local North American copper foil supply chain.
Red Ink Persists Despite 63% Revenue Jump; Profit Turnaround Targeted for 2027
Solus Advanced Materials posted 75亿元 (75 billion won) in copper foil revenue for the second quarter of this year, up 63% year-on-year. The growth was spearheaded by expanding shipments to key North American clients and securing new customers.
Total consolidated revenue rose 31% from the same period last year to 101.9 billion won. However, the company recorded an operating loss of 21.3 billion won. Persistent burdens from elevated electricity and raw material costs meant that volume growth did not immediately translate into black ink.
Production facility utilization rates are steadily climbing. According to Eugene Investment & Securities, the utilization rate of the Hungarian copper foil plant rose from 47% in the first quarter of this year to 67% in the second, with the brokerage projecting the rate to approach 80% in the second half.
In a July 27 report, Eugene Investment & Securities analyst Han Byung-hwa noted that pricing leverage was improving due to client diversification. The price negotiations underway at the time have materialized into the more-than-50% fourth-quarter price hike.
The effects of the fourth-quarter price hikes are slated to be reflected in earnings starting this quarter. Combined with easing fixed-cost burdens from expanded output and higher utilization rates, the company expects the pace of profitability improvement to accelerate.
Solus Advanced Materials is also discussing further price hikes for 2027 supply volumes with major global clients. The company expects its copper foil business to swing to an EBITDA (earnings before interest, taxes, depreciation, and amortization) surplus early next year, while setting a target to achieve a quarterly operating profit breakthrough within the year.
The copper foil industry has historically struggled to secure profitability amid a growth slowdown in the EV market and heavy capital expenditures on production facilities. Recently, however, sales channels have diversified thanks to surging ESS demand and the restructuring of North American supply chains.
The latest price hike by Solus Advanced Materials is significant in that it adds a pricing-driven effect to its volume-led recovery trajectory. Profitability shifts in the copper foil business are expected to become tangible in fourth-quarter earnings figures.
A company official described the price increase as a vital milestone for enhancing the profitability of the copper foil business, adding that negotiations for additional price bumps on next year's supplies are underway as the company anticipates an EBITDA turnaround in early 2027 and an operating profit conversion later that year.
