With the opening of 5G commercial year, the fiber optic cable industry has attracted market attention, and listed companies are also increasing the upstream material layout. Taking Zhejiang as an example, the company recently developed and produced optical cable ointment with SEP through expert group identification. Reporters learned from the industry that the future is expected to gradually achieve domestic substitution, fill the domestic gap, break the monopoly of international giants on the domestic SEP market.

Organizations point out that "5G base station densification + forward optical fiber network" will open up new growth space for the optical fiber and cable industry. On the one hand, with the rapid increase of frequency, the density of 5G base station will increase greatly compared with that of 4G. According to FTTH council, the number of optical fibers needed by 5G base station will be more than 16 times of that of 4G. On the other hand, 5G introduces CU/DU two-tier architecture, and the forward network will bring a new demand for optical fibers.

The upstream material industry of optical fiber and cable also ushered in new development opportunities. Among them, as an indispensable material for waterproof and moisture-proof of optical cable, only the optical cable ointment contains more than 20 kinds of raw materials, such as base oil, macromolecule material, water-repellent agent, antioxidant and so on. Especially, the Styrene Elastomer SEP, which is used as the thickener of optical cable paste and fibre paste, has the best prospect.

It has been pointed out that the increasing demand for fiber optic cable will create a huge market space for SEP used in fiber optic cable ointment. In addition to the replacement demand created by the past use of fiber optic cable after its service life, the market capacity of SEP in China is expected to reach 10,000-15,000 tons next year.

In contrast to the domestic substitution of optical cable ointment, the SEP market for optical cable ointment has been monopolized by international giants such as Cotten of the United States and Coleridge of Japan due to high technical barriers. The new development opportunities brought by 5G are expected to break this situation. Recently, Zhejiang Zhongcheng announced that the "Styrene Elastomer SEP for Optical Cable Ointment" completed by Zhongli Science and Technology, the company's holding subsidiary, had passed the expert group appraisal smoothly in recent days. The appraisal opinion is that the product is used as a thickener of cable paste and fibre paste for optical cable. The product has been tested by Qingdao Stander Testing Co., Ltd. and the indicators measured meet the requirements of relevant standards and the plan task book. Users use the product, which reflects good social and economic benefits. Relevant experts believe that with the further improvement of product stability in the future, products are expected to gradually realize domestic substitution, fill the domestic gap and break the monopoly of international giants on the domestic SEP market.

It is understood that the development of SEP is very difficult. Five core technologies, including anionic active polymerization control technology and hydrogenation catalytic system establishment, need to be tackled. These core technologies form a very high technical barrier to the development of SEP products. Zhejiang Zhongcheng has gone through more than ten stages, such as laboratory technology route research and development, small test technology route establishment, small test reaction parameter finalization, etc. from the start of project development, each stage has the whole technical team to overcome difficulties, and it took six years before the success of research and development.

The announcement shows that the paste made from Styrene Elastomer SEP developed by Zhongli Science and Technology has the characteristics of transparency and uniformity, moderate dropping point and viscosity, good cone penetration and separation performance of steel mesh oil. It is innovative in formulation design and synthesis process, and the technology department has the leading level of similar products in China.

According to the announcement, Zhongli Science and Technology has passed the system certification of quality management, environmental management, occupational health and safety, and its production equipment, process tooling, testing means and environmental protection measures can meet the requirements of mass production. Reporters learned from the company that at present, there have been customer feedback on the trial conclusion of industrial products, product quality meets the customer's internal control requirements, is now in the sales order waiting for the production of products, the current device also needs to complete a round of equipment adapting to the transformation to achieve the monthly production capacity of 2000 tons.

At the same time, SEP is one of the products of "High Performance Functional Polypropylene Film Trial Project" funded by the company. The annual report of 2018 shows that although the project achieved about 30,000 tons of production and sales in 2018, it suffered a large loss due to the basic ordinary products such as SBS and the fluctuation of raw material prices. After successful R&D and trial production, SEP is expected to have a positive impact on the performance of Zhongli Science and Technology and Zhejiang Zhongcheng in the future.

Zhejiang Zhongcheng said that the follow-up promotion and application of SEP products will help enrich the product structure of Zhongli Science and Technology, bring a positive impact on its future market development and technology development, and enhance its sustained innovation ability and core competitiveness. However, the impact of new products and technologies on the company's operating performance will also be affected by policy, market demand, industry development and other factors.