By Gong Huiping, CNCIC

The concept of “construction of new infrastructure” was first proposed at the end of 2018, which, according to the official definition, included 5G base station infrastructure, AI (Artificial Intelligence), industrial Internet and IoT (Internet of Things). In 2020, “new infrastructure” has been focused more on industrial transformation and upgrading, integrating the construction of infrastructure with technology, including 5G base station construction, UHV (Ultra High Voltage), intercity HSR (High-Speed Railways) and urban rail transit, EV (Electric Vehicle) charging stations, big data centers, artificial intelligence and industrial Internet.

   “New infrastructure” will bring opportunities to specific chemical materials. The transformation and upgrading of chemical materials driven by downstream demand will accelerate the development of new chemical materials. The major new chemical materials that may be widely used in the new infrastructure include polytetrafluoroethylene (PTFE), industrial liquid crystal polymer (LCP), modified polyimide (MPI), polyimide (PI) and special gas sulfur hexafluoride.

The construction of 5G base stations spurs up demand for PCB (Printed Circuit Board)

   More than 130 000 5G base stations were built across the country in 2019, and over 600 000 stations are expected by the end of 2020. A 5G base station is the core facility of 5G network and PCB is the core component. Its raw materials mainly consist of copper foil, glass fiber cloth, special resins such as PTFE, and ceramics. PTFE, EP, BT, CE, PPE and PI can meet the requirements for high-speed and high-frequency materials used in 5G base stations, so more than 130 categories of copper-clad plates have been made from them.

   In 2019, China's PTFE capacity was 126 kt/a, apparent consumption was about 50 kt (up by 9.3% from 2018), and export volume accounted for 33% of the annual output. The domestic PTFE market saw a supply glut of low-end grades, while some high-end grades were covered by imports. The capacities were mostly concentrated in east China (Shandong, Shanghai, Jiangsu and Zhejiang), taking up about 80% of the national total. The accumulated capacity in central south and southwest China accounted for 13%, with Sichuan as the core production base. The leading domestic PTFE producers are Zhonghao Chengguang Research Institute of Chemical Industry Co., Ltd., Jusheng Fluorine Chemical and Changshu 3F Fluorochemical Industry Co., Ltd. It is estimated that the consumption of PTFE in the construction of 5G base stations will reach RMB2-3 billion.

Increasing demand for 5G end-user antenna material LCP and low dielectric point MPI

   The traditional PI products are required to reduce their dielectric performance when being used as 5G mobile phone antenna material. So far, LCP and MPI have been the antenna materials meeting the requirements. MPI has been modified on the basis of PI, so it can basically meet the needs for 5G antenna material. LCP has low loss at high frequency, but its process is complicated. In the context, MPI and LCP will coexist in the next few years.

   The main raw material of MPI antenna is electronic-grade PI film, which is mostly produced by DuPont, Kaneka Chemical, Ube Industries, SKC Kolon PI, Taiwan Taimide Technology. Most of the electronic PI films used in the production of FPCB in China are still dependent on importing, as the domestic PI films are mainly used to produce low-end electrical products, which can basically meet the domestic demand. Driven by the construction of 5G base stations, the domestic PI industry will accelerate the development of higher-end products.

   At present, the global LCP capacity is about 76 kt/a, most of which is concentrated in Japan, the United States and China. Celanese, Solvay, Sumitomo Chemical and Polyplastics Co., Ltd. are major suppliers, whose capacity accounts for over 65% totally. In China, the key suppliers include WOTE Advanced Materials Co., Ltd., SHANGHAI PRET Composites Co., Ltd., Kingfa Science & Technology Co., Ltd., and Ningbo Jujia New Materials Co., Ltd. The market size of LCP materials for mobile phones in the world will reach US$450 million by 2021.

Increasing demand for special gas sulfur hexafluoride in the construction of UHV

   State Grid Corporation of China has specified that the investment on the construction of UHV projects in 2020 will be RMB112.8 billion. UHV industrial chain is comprised of power supply, electrical facility, energy consumption equipment, and raw materials. The UHV development will drive up the demand for special gas sulfur hexafluoride needed by the power industry. Sulfur hexafluoride is strong greenhouse gas, and advanced power plants have been actively engaged in developing its substitutes in recent years. At present, the total domestic capacity of sulfur hexafluoride is over 10 kt/a, and the main producers are China National Nuclear Corporation Honghua, Liming Research & Design Institute of Chemical Industry Co., Ltd., Zhonghao Chenguang Research Institute of Chemical Industry Co., Ltd., Yoke Technology Co., Ltd., and Shandong Feiyuan Technology Co., Ltd.

Sustained demand for high-performance modified Nylon triggered by intercity railway and urban rail transit

   China will invest about RMB800 billion on railway construction in 2020, flat with that in 2019. The railway construction will attach importance to high-speed railway and intercity railway. Steel demand is expected to reach 25 million tons, and demand for high-performance modified nylon used in the production of rail transit fastener will be about 2 kt.

“Construction of New Infrastructure” speeds up digitalization of the industry

   The construction of new infrastructure will stimulate the digitalization of the chemical industry and accelerate the process of intelligent manufacturing in the chemical industry in the long term. The development of big data center, artificial intelligence and industrial internet will bring new development modes to chemical producers. Today, visual panels and smart plants are being marketed.

   The continuous updating of data analysis technology can enhance the efficiency and safety in chemical industry by providing solutions to complex production data, poor correlation and issues hard to be analyzed. The chemical industry should actively meet the wave of digitalization and intellectualization.