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CHINAPLAS 2016: Sabic sees shift up value chain in China's polyolefin demand

Shanghai — China's polyolefin demand is shifting towards higher-value applications such as automotive polypropylene and metallocine polyethylene, Saudi Basic Industries Corp.'s Executive Vice President of Polymers Abdulrahman Al-Fageeh said Monday on the sidelines of the Chinaplas 2016 conference in Shanghai.

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Sabic's Executive Vice President of Polymers Abdulrahman Al-Fageeh

While acknowledging overall petrochemical demand growth in China had slowed over the past year, Al-Fageeh told Platts said he expected polymer demand growth to continue at a higher-than-GDP trajectory in 2016.

"We are fortunate in that the Chinese government has a policy to freeze the GDP more than 6.5%," he said.

PP demand for automotive applications in China has increased over the last year, Al-Fageeh said. "We have shifted some of our portfolio in our local production here in Sinopec Sabic Tianjin Petrochemical [SSTPC] to cope with that demand," he added.

SSTPC, which can produce 450,000 mt/year of PP and 600,000 mt/year of PE, is a 50:50 joint venture between Sabic and Sinopec.

Article Continues below...

China's automobile sales grew 12.3% year on year in the first quarter, National Bureau of Statistics data showed. Automobile components use PP impact copolymers extensively.

Metallocine PE, used increasingly in flexible packaging, industrial films and consumer products, is another area of focus for Sabic, Al-Fageeh said.

"Metallocine is probably one of the best [in demand] growth in the PE portfolio, that's why we are supporting our customers by investing in our Nexlene technology in [South] Korea and introducing it to our customers in China," he said

SABIC SK Nexlene Company or SSNC is a 50:50 joint venture between SABIC and SK Global Chemical that can produce 230,000 mt/year of ethylene/alpha-olefin copolymers products including metallocene based linear low-density polyethylene, or m-LLDPE.

Al-Fageeh said close ties between producers and end-users was not only an industry-wide trend but a strategic imperative for Sabic, adding that "customer intimacy" enabled producers to understand demand changes and in turn the investment requirements needed to remain competitive.

@ChinaPlas runs April 25-28 in Shanghai.

--Yi-Jeng Huang, yi.jeng.huang@platts.com
--Edited by Wendy Wells, wendy.wells@platts.com