Refiner may spend 20b yuan on project
Sinopec Shanghai Petrochemical, one of China's top five refiners, is considering investing as much as 20 billion yuan (HK$25.3 billion) on a one million tonne paraxylene project that could reduce the country's reliance on imports of the raw material for making polyester.
Sinopec Shanghai Petrochemical, one of China's top five refiners, is considering investing as much as 20 billion yuan (HK$25.3 billion) on a one million tonne paraxylene project that could reduce the country's reliance on imports of the raw material for making polyester.
"The demand for paraxylene is very big," said Wang Zhiqing, the company's chairman and president. "We expect that the internal return on the project will top 20 per cent."
The country consumed 15.71 million tonnes of paraxylene last year, according to the China Securities Journal.
About 40 per cent of that was imported from South Korea, Japan and Taiwan, said Wu Fei, an analyst at Bocom International Securities. Imports of paraxylene accounted for just 14 per cent of consumption in 2000. The lucrative business of paraxylene production has spawned numerous competitors and is vulnerable to overcapacity.
The mainland's production capacity has risen more than fourfold to 9.3 million tonnes, and nearly three million tonnes of capacity is under construction or being designed, according to data compiled by internet portal Tencent.