Even with China's expanding market, research on new polyolefins will be vital to future competitiveness for China's state-owned plastics giant Sinopec, said a senior executive of its plastics research division.
Sinopec — China's largest plastics maker and the world's second-biggest polyolefins maker — is facing serious cost challenges from cheaper feedstocks in the Middle East and overcapacity in Asia resulting from new production growing faster than consumption, said Jinliang Qiao, vice president of Sinopec's Beijing Research Institute of the Chemical Industry.
“We have to produce polyolefins with higher performance and lower cost,” Qiao said at Flexpo, held June 15-17 in Shanghai. “It will be difficult for us to survive from this challenge.”
About 44 percent of the 44 billion pounds of polyethylene capacity to be added globally by 2015 will be in Asia, with another 40 percent coming from the Middle East. Both that new Middle Eastern resin and expected new supplies of polyolefin from new shale gas feedstocks in North America will be cheaper than other sources in the world, including Sinopec, he said.
To compete against new materials, Sinopec has been researching new grades of materials and catalysts, and has enjoyed some success. Some research is a world first, and designed to take advantage of opportunities in China's market, Qiao said.
For example, the company has produced several new grades of biaxially polypropylene film-grade resin using patented technology that allows for high-speed production with a high-tensile strength by controlling the isotacticity distribution to be greater than 98 percent, he said. “Previously this was not thought possible,” Qiao said.
Sinopec produces about 2.2 billion pounds of BOPP resin a year, with the country's BOPP film makers having capacity for more than 6.5 billion pounds of production, he said. Since the China market is relatively new, China's BOPP film companies tend to use modern equipment that supports faster throughputs and wider, thinner film lines, requiring better grades of material, Qiao said.
“China's situation is quite different from other parts of world, our film facilities are quite new, with very modern equipment. The film is getting thinner and thinner and they still want uniform film.”
The BOPP film market in China is expected to keep growing because per-capita consumption remains low, he said.
Some of the R&D has been as part of the Chinese-government funded “973” project in basic research, including in polyolefins. The government has invested more than US$10 million in polyolefin research during a 10-year period, with Sinopec kicking in its own money as well, Qiao said.
The firm also has developed several grades of PP catalysts, and a new production process called the asymmetric donor adding, which it claims produces high-performance PP at low cost.