A positive signal is emerging for the Korean battery materials industry, as prices for separators and copper foil, once plagued by oversupply, are now showing clear signs of a rebound.
This recovery is rooted in a significant policy shift from China. For years, the battery market suffered from what's known as 'involution'—a vicious cycle of excessive investment and fierce price wars. However, since mid-2025, the Chinese government has actively launched an "anti-involution" campaign to restore order. First, the National Development and Reform Commission (NDRC) vowed to curb this "herd behavior." This wasn't just talk; we're seeing real-world effects. For example, Yunnan Energy New Material, a global leader, recently canceled a major separator factory project in Malaysia. Similarly, SK Innovation sold its struggling separator business in China. These moves signal a clear trend toward market consolidation and more disciplined supply.
Adding to this, a second key factor is the booming AI industry. The massive demand for AI servers requires a huge amount of high-performance Printed Circuit Boards (PCBs) and Copper Clad Laminates (CCLs), which use the same core material as battery foil: copper foil. This has created a supply shock for the battery sector. Major suppliers like Kingboard Laminates and Panasonic have been raising prices for their CCL products. Consequently, copper foil producers are reallocating their capacity away from batteries toward the more profitable AI sector, tightening the supply available for electric vehicles.
Finally, demand for EVs is stabilizing, particularly in Europe. While the Chinese market has cooled slightly, European EV deliveries have surged, supported by high oil prices near $110 per barrel, which make EVs a more economically attractive option. This shift provides a stable demand base for battery material suppliers. The rally in copper prices has also played a role, allowing copper foil manufacturers to pass on higher costs to customers and further supporting prices.
This recovery is not happening in a vacuum. It follows an earlier rebound in cathode materials, evidenced by the impressive first-quarter 2026 profit turnarounds for companies like Ecopro BM and L&F. The price recovery in separators and copper foil broadens this positive trend across the entire battery supply chain. It suggests a more sustainable and widespread earnings recovery for Korean material companies is on the horizon.
- Glossary
- Involution: A term describing a situation of intense internal competition where participants are stuck in a fierce, zero-sum struggle for market share, often leading to price wars and diminishing returns for everyone involved.
- Separator: A key component in a battery, it is a micro-porous membrane placed between the anode and cathode to prevent them from touching (which would cause a short circuit) while allowing ions to pass through.
- Copper Foil: An extremely thin sheet of copper used as the current collector for the anode in lithium-ion batteries. It is also a critical material for printed circuit boards (PCBs).