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(Yicai) Jan. 27 -- Shares of Sinopec Shanghai Petrochemical rose after the Chinese firm said it plans to meet growing demand for large-tow carbon fiber in emerging industries by investing CNY3.2 billion (USD440 million) in a joint production facility for the advanced material.
The company’s shares [SHA: 600688] closed 1.8 percent higher at CNY2.86 (39 US cents) each in Shanghai today, while its Hong Kong-listed stock [HKG: 0338] jumped 5.3 percent to HK1.19 (15 US cents.)
The unit of China Petrochemical Corporation will build a joint production unit in Shanghai for the raw material polyacrylonitrile, as well as production facilities for large tow acrylic fibers with an annual capacity of 60,000 tons., it announced late yesterday.
The company also said it will build a new production base in Ordos, Inner Mongolia Autonomous Region with an annual capacity of 30,000 tons of large-tow carbon fiber. The Ordos facility will use the fiber product made at the Shanghai plant as raw material to make the eventual product.
Investment in the Shanghai plant is estimated at CNY953 million (USD131.2 million), with CNY2.24 billion allocated for the Ordos plant. The construction period is expected to be three years.
The main buyers of large-tow carbon fiber, which is far stronger than steel, is corrosion-resistant, and has relatively low production costs, are wind turbine blade makers, and it can be used in rail transit and civil engineering products. Sinopec Shanghai said it also plans to offer the products in the low-altitude aircraft industry.
Sinopec Shanghai is working to transform its product structure, and aims to become a supplier of more high-end materials. The firm unveiled plans earlier this month to invest a total of CNY21.31 billion (USD 2.9 billion) to build an ethylene unit that can turn out 1.2 million tons a year as well as a series of downstream new material units to replace its outdated existing ethylene production facility along with 17 other chemical production units in three years, it is not clear if the latest announced carbon fiber project is one of the new units it plans to build.
Editor: Tom Litting