Polyethylene (PE)

Understanding the world’s most widely used plastic

Discover the factors influencing polyethylene (PE) markets

From the packaging on our food to the paints in our homes, polyethylene (PE) surrounds us as by far the largest commodity plastic by overall volume. It is essential to our daily lives. With countless applications in everyday materials, it is crucial for anyone with an active interest in the market to understand what is driving PE markets. Adapting efficiently to the significant changes in how it is being produced and consumed around the world is key.

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Polyethylene (PE) news

UK's Viridor to close Avonmouth mechanical recycling plant

LONDON (ICIS)–UK-headquartered recycler Viridor intends to close its Avonmouth mechanical recycling facility following a strategic review, the company announced in a press release on Tuesday. The Avonmouth facility has a nameplate capacity of 80,000 tonnes/year of recycled polymers output concentrated on recycled polyolefins. Viridor is conducting a separate review of its Rochester mechanical recycling plant. The company attributed the decision to challenging market conditions, along with an absence of planned UK legislation to increase UK recycling rates. The company also cited low cost imports entering Europe and displacing domestic supply, echoing comments made by Plastics Recyclers Europe (PRE) on 24 October. "If circular plastics are to thrive in Europe, then plant closures are damaging to that progress. However, Viridor has been restructuring over a period of time including selling their waste business. While this is a refocus for Viridor, it leaves the UK market with reduced supply of recycled polymers," said Helen McGeough, global analyst lead, plastics recycling, ICIS. Across both recycled polyethylene (R-PE) and recycled polypropylene (R-PP) players in recent weeks, recycled flake and pellet producers have complained of negative margins in non-packaging grades. While packaging demand in Europe has remained firmer than non-packaging across 2024 to date, and new packaging projects continue to onboard in Q4, there has been increasing bearishness in the sector since October as players focus on core business due to strained macroeconomic conditions. Viridor said it will continue to invest in polymer recycling through its Quantafuel subsidiary – which is focused on pyrolysis-based chemical recycling. ICIS assesses more than 100 grades throughout the recycled plastic value chain globally – from waste bales through to pellets. This includes recycled polyethylene (R-PE), recycled PET (R-PET), R-PP, mixed plastic waste and pyrolysis oil. On 1 October ICIS launched a recycled polyolefins agglomerate price range as part of the Mixed Plastic Waste and Pyrolysis Oil (Europe) pricing service. For more information on ICIS’ recycled plastic products, please contact the ICIS recycling team at recycling@icis.com Thumbnail photo: Sorting at a plastics recycling facility (Source: Shutterstock)

05-Nov-2024

Latin America stories: weekly summary

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 1 November. Brazil’s chemicals trade deficit keeps rising; producers entrust recovery to higher tariffsBrazilian chemicals producers’ market share continued to be threatened in the January-September period, with the industry’s trade deficit rising to $36.2 billion, up 1% year on year, the country’s chemicals producers trade group Abiquim said this week. Brazil’s chemicals output up 2% in September, plastics and rubber up 6.5%Brazil’s chemicals output rose by 2% in September, year on year, although it fell compared with August by 2.7%, the country’s statistics office IBGE said on Friday. Brazil's manufacturing keeps momentum in October, export orders robustBrazil's petrochemicals-intensive manufacturing sectors continued expanding in October, the tenth consecutive month of growth, analysts at S&P Global said on Friday. Mexico’s manufacturing recovers slightly in October but poor demand keeps it contractionMexico's petrochemicals-intensive manufacturing sectors continued to contract in October, although it slightly improved its performance month on month, analysts at S&P Global said on Friday. Colombia’s manufacturing output booms in October, central bank cuts rates to 9.75%Colombia's petrochemicals-intensive manufacturing sectors made a decisive return to growth in October on the back of a healthy increase in new business, analysts at S&P Global said on Friday. Brazil’s chemical producer prices up nearly 11% in SeptemberBrazil’s chemicals producer prices rose in September by nearly 11%, year on year, as the sector recovers, the country’s statistics office IBGE said this week. Mexico’s GDP recovers strongly in Q3, more rate cuts dependent on US election – analystsMexico’s GDP grew by 1% in Q3, quarter on quarter, confirming the economy “pulled out of the slump” of the first half of the year, analysts said on Wednesday. Brazil's Braskem Q3 resin sales down 2% due to higher PE and PVC stocksResin sales in Braskem's domestic market dropped by 2% in Q3 year on year, mainly due to the higher levels of polyethylene (PE) and polyvinyl chloride (PVC) stocks in the transformation chain, the Brazilian petrochemicals major said on Wednesday in its quarterly production and sales report. Brazil Petrobras to continue advancing nitrogen project in Tres LagoasBrazil producer Petrobras announced that its board of directors has decided to continue implementing the nitrogen fertilizer unit (UFN-III), located in Tres Lagoas, Mato Grosso do Sul. PRICINGDomestic, international PE prices steady to lower on falling US export offersDomestic, international polyethylene (PE) prices were assessed as steady to lower across Latin American countries on the back of competitive offers from the US. Domestic PP prices fall in Colombia, Mexico on lower feedstocksDomestic polypropylene (PP) prices fell in Colombia and Mexico tracking lower feedstock costs. US October propylene contracts settled at a decrease on falling spot prices. Brazil hydrous ethanol sees small rise, anhydrous stays steadyPrices for hydrous ethanol saw a slight increase at the lower end of the range, with demand demonstrating stable sales in Q4. Chile and Colombia PET CFR prices decline amid Asia price reductionsChile and Colombia's CFR prices fell on the lower end of the range reflecting the recent price reduction in Asia.

04-Nov-2024

SHIPPING: Asia-USWC container rates edge higher on late-season holiday demand

HOUSTON (ICIS)–Shipping container rates from east Asia and China to the US West Coast rose this week, reversing a trend that saw rates fall by almost 36% from July, as late-season holiday demand emerged. Many importers had pulled holiday volumes early to avoid any problems related to a US East Coast dock workers strike that was set to begin on 1 October. Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said front-loading of volumes to the East Coast in September may have been stronger than to the West Coast due to the rush to beat the 1 October strike deadline. Supply chain advisors Drewry has Shanghai-USWC rates edging higher by less than 1% and said of the increase in spot rates ex-China that it expects this trend to continue as the Christmas rush intensifies. Drewry’s World Container Index showed average global rates rising, as shown in the following chart. Rates from Shanghai to Europe rose more dramatically than those from Shanghai to the US, as shown in the following chart from Drewry. Levine said the stronger front loading of volumes to the East Coast could explain the sharper drop of East Coast rates over the last few weeks, as well as the anomaly that saw East Coast rates fall below West Coast rates. Rates to the East Coast are typically about $1,000/FEU (40-foot equivalent units) higher than to the West Coast. Drewry still has East Coast rates about $400/FEU higher than West Coast rates. Levine noted that rates to both coasts are still $1,000-1,500/FEU above their April lows. Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. They also transport liquid chemicals in isotanks. EAST COAST LABOR UPDATE Union dock workers and US East Coast port operators will resume negotiations on a new master agreement in November, according to a joint statement from both parties. The International Longshoremen’s Association (ILA), representing the dock workers, and the United States Maritime Alliance (USMX), which represents the ports, reached a tentative agreement on 3 October that ended a three-day strike. The strike was paused until 15 January after parties agreed on the salary portion of the agreement, essentially meeting in the middle. Levine said port automation remains the major sticking point, and if there is no progress in the coming weeks anxious shippers may start increasing orders again ahead of another possible strike. CANADA WEST COAST PORT LABOR UNREST The British Columbia Maritime Employers Association (BCMEA), which represents ports on Canada’s west coast, has issued formal notice of its intention to lock out port workers coastwide, starting Monday, 4 November at 8:00 local time, it said on Friday. On Canada’s east coast, dock workers at the Port of Montreal on Thursday, 31 October, went on an indefinite strike at two of the port’s four container terminals. The labor dispute is about automation at Dubai Ports World (Canada), as well as retirement benefits. The parties have been negotiating a new collective labor deal since the last one expired in March 2023. LIQUID CHEM TANKER RATES STABLE US chemical tanker freight rates were largely unchanged this week for most trade lanes, while vessel demand continues to be soft for various routes. The USG to ARA remains soft and solid for contractual cargoes and any additional available CPP tonnage could continue to pressure the market even further. Similarly, that situation exists for volumes on the USG to the Caribbean and South America trade lanes. From the USG to these regions, space among regular carriers remains available, due to a lack of interest. However, for the USG to Asia spot volumes continues to be weak as there seems to be plenty of prompt space available.  Mainly parcels of methanol to China seems to have provided any support to the weak market. Additionally, ethanol, glycols and caustic soda were seen in the market in various directions. With additional reporting by Stefan Baumgarten and Kevin Callahan Visit the ICIS Logistics – impact on chemicals and energy topic page

01-Nov-2024

VIDEO: FD NWE R-PET colourless flake prices may see first changes since May

LONDON (ICIS)–Senior Editor for Recycling, Matt Tudball, discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: FD NWE colourless flake under downward pressure for November Views divided, some see stability, others see softer prices PET tray demand suffering in Q4 Reductions ahead of SUPD paints negative picture for legislation

01-Nov-2024

UPDATE: Japan's Sumitomo Chemical trims fiscal H1 net loss; eyes LDPE output cut

SINGAPORE (ICIS)–Sumitomo Chemical trimmed its fiscal H1 to September 2024 net loss to Japanese yen (Y) 6.5 billion ($42 million), aided by sales growth of about 5%, while it seeks to rationalize operations to boost profitability. Return to profit expected for year-to-March 2025 IT-related chemicals' fiscal H1 core operating profit more than doubles Chiba Works LDPE output to fall by 20,000 tonne/year in billion yen (Y) Apr-Sept 2024 Apr-Sept 2023 % change Yr-to-March 2025 (revised forecast) Yr-to-March 2024 (actual) Sales revenue     1,241.4     1,186.9             4.6 2,600.0 2,446.9 Core operating profit           29.5        -96.7 – 100.0 -149.0 Operating income         121.2      -133.7 – 180.0 -488.8 Net income           -6.5         -76.3 – -25.0 -311.8 Revenues for the period increased on higher selling prices of synthetic resins,  methyl methacrylate (MMA) and various industrial chemicals due to higher raw material prices, the company said in a statement. Sumitomo Chemical's Essential Chemicals & Plastics segment posted a lower core operating loss of Y36.7 billion, with sales up by 3.3% year on year to Y403 billion, it said. However, it noted that earnings were weighed down by a deterioration in the financial performance of its 37.5%-owned affiliate Saudi Arabia's Rabigh Refining and Petrochemical Co. Meanwhile, IT-related chemicals posted a 10% increase in sales to Y224.3 billion, with core operating income more than doubling to Y37.5 billion, on the back of strong demand for display-related materials and processing materials for semiconductors, it said. For the whole of fiscal year ending March 2025, Sumitomo Chemical lowered its sales forecast by Y70 billion to Y2.6 trillion, but raised its net profit forecast by Y5 billion to Y25 billion. The forecast marks a return to profitability for Sumitomo Chemicals, which incurred a Y312 billion net loss in the previous fiscal year. LDPE OUTPUT CUT BY END-MARCH 2025In a separate statement on 29 October, the company announced plans to reduce its low density polyethylene (LDPE) production at Chiba Works by 20,000 tonnes/year, citing declining domestic demand. Operations at a portion of the company’s LDPE facilities at the site will be suspended by March 2025 – the end of its current fiscal year. Sumitomo Chemical has an LDPE plant in Chiba prefecture with a 172,000 tonne/year capacity, according to ICIS Supply and Demand Database. “The company expects this measure, combined with the various rationalization efforts that it has implemented thus far, to lead to improving the overall operating rate of the remaining facilities,” Sumitomo Chemical said. Japan’s LDPE demand “is not anticipated to have significant future growth”, it said, citing a declining population and an ageing society with a low birth rate. Sumitomo Chemical said that it is “accelerating business restructuring as part of its short-term intensive performance improvement measures”. Other measures include improving the company’s product portfolio “to cater to high value-added areas”, as well as working on fixed cost reduction at its remaining facilities, including a joint study with Maruzen Petrochemical to optimize operations of their joint venture Keiyo Ethylene. The Japanese producer said that it “will steadily advance these measures to ensure a V-shaped recovery in fiscal 2024, while also carrying out fundamental structural reforms”. Focus article by Pearl Bantillo ($1 = Y153.3) (adds paragraphs 8-15 with recasts throughout)

30-Oct-2024

SHIPPING: Union, US East Coast ports to resume negotiations in November

HOUSTON (ICIS)–Union dock workers and US East Coast port operators will resume negotiations on a new master agreement in November, according to a joint statement from both parties. The International Longshoremen’s Association (ILA), representing the dock workers, and the United States Maritime Alliance (USMX), which represents the ports, reached a tentative agreement on 3 October that ended a three-day strike. The strike was paused until 15 January after parties agreed on the salary portion of the agreement, essentially meeting in the middle. But the union remains adamant against any full or partial automation at ports that could threaten union jobs. The respective negotiating committees will meet in New Jersey, where they will look to agree on terms for a new contract that can be presented to the full ILA Wage Scale Committee for approval, and later, to ILA membership for ratification, the statement said. “The ILA and USMX welcome the opportunity to return to the bargaining table and get a new agreement in place as soon as possible,” the parties said. The two sides will not discuss details of negotiations with the media prior to these meetings. IMPACTS TO CHEM MARKETS The short strike had some impact on the US chemicals industry, with polyethylene (PE) exports to Brazil being put on hold in the lead up to the work stoppage. The polyvinyl chloride (PVC) industry was concerned as all US Gulf PVC exports move out of one of the impacted East Coast ports. In the polyethylene terephthalate (PET) market, imports of PET resins were diverted to the US West Coast in anticipation of the work stoppage. The dock workers do not handle liquid chemical tankers, as most terminals that handle liquid chemical tankers are privately owned and do not necessarily use union labor. Also, tankers do not require as much labor as container or dry cargo vessels, which must be loaded and unloaded with cranes and require labor for forklifts and trucks. But container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. They also transport liquid chemicals in isotanks. Visit the ICIS Logistics – impact on chemicals and energy topic page Thumbnail image shows a container ship. Photo by Shutterstock

28-Oct-2024

Europe top stories: weekly summary

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 25 October. Sentiment in Europe jet fuel market dented by crude instability and soaring stocks Bearing the brunt of low demand and a supply overhang, sentiment in the European jet kerosene spot market has been further dulled by upstream Brent crude fluctuations and soaring regional stock levels hitting their highest since August 2021. Eni to close Versalis crackers, PE plant as it pivots to low carbon, specialty production with €2 billion investment Italy’s Eni plans to close its Versalis crackers at Brindisi and Priolo, plus a polyethylene (PE) site at Ragusa as it refocuses on low carbon and specialty chemical production through a €2 billion investment over the next five years. Dow to review Europe polyurethanes amid ‘increasing challenges’ of regulation Dow is set to review the competitiveness of several assets in Europe, particularly around its polyurethanes operations, amid “increasing challenges” presented by the region’s regulatory environment, CEO Jim Fitterling said in a Q3 results statement. Europe ECH prices dip for first time since January as raw material costs ease Europe epichlorohydrin (ECH) freely negotiated contract prices have softened in October for the first time since January 2024 as propylene feedstocks costs ease in a muted and well supplied ECH market. INSIGHT: ‘Bridge’ countries bring new opportunities as global trade flows fragment – Bertschi Changing trade flows driven by increasing friction between China, the US and their allies mean there will be demand for new chemical logistics routes and infrastructure, according to the executive chairman of chemical logistics group Bertschi. Europe PE/PP October contracts down on monomer and stagnant demand European polyethylene (PE) and polypropylene (PP) contracts have been agreed down slightly beyond the monomer drop for October.

28-Oct-2024

SHIPPING: Asia-US container rates fall as carriers eye blank sailings to keep floor on prices

HOUSTON (ICIS)–Rates for shipping containers from east Asia and China to the US fell this week, but carriers have announced an increase in blank sailings so they can tighten capacity and maintain a floor on prices. Rates have been falling steadily since July as importers pulled forward peak season volumes to get ahead of the dock workers strike at East Coast and US Gulf ports. Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said some carriers added blank sailings on Asia-to-US routes. Last week, Mediterranean Shipping Co (MSC) announced four blank sailings on its Asia-USEC 2M service, citing ongoing congestion at some ports related to the brief work stoppage. Levine said the action could also be to maintain a floor on rates. Global average rates fell by 4% and are just above $3,000/FEU (40-foot equivalent unit), according to supply chain advisors Drewry and as shown in the following chart. Rates to the East Coast fell by 6.1% to around $5,200/FEU, with rates to the West Coast falling by 2.6% to around $4,800/FEU, as shown in the following chart. Transpacific rates are now about 30% below the July peak, and Levine expects them to continue to soften as the market is in a slow period between the end of the Christmas holiday peak season and the Lunar New Year. “As long as Red Sea diversions continue to absorb capacity on an industry level, prices may not fall much further than seen back in April,” Levine said. Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. They also transport liquid chemicals in isotanks. LIQUID TANKER RATES FLAT TO LOWER Overall, US chemical tanker freight rates were softer this week for several trade lanes, in particular the USG-to-Brazil and USG-Asia trade lanes as spot tonnage remains readily available. There has been limited spot activity to both regions and COA nominations are taking longer than usual. The vessel owners have tried to delay the sailings but there has been very little spot interest in the market leaving no other options for full cargoes and in turn impacting spot rates. On the transatlantic front, the eastbound leg remains steady as there was ample space available, which readily absorbed the few fresh inquiries for small specialty parcels stemming from the USG bound for Antwerp. Various glycol, ethanol, methyl tertiary butyl ether (MTBE) and methanol parcels were seen quoted to ARA and the Med as methanol prices in the region remain higher. Additionally, ethanol, glycols and caustic soda were seen in the market to various regions. Additional reporting by Kevin Callahan

25-Oct-2024

VIDEO: International Gate talks to ICIS about PET, R-PET ‘chaotic’ market outlook

LONDON (ICIS)–Senior editors Caroline Murray and Matt Tudball interviewed Marco Piscitelli, founder and CEO of International Gate, at the company’s customer event in Verona, Italy on 23 October to get his views some of the key topics impacting the European polyethylene terephthalate (PET) and recycled PET (R-PET) markets, including: ‘Theoretical’ global oversupply of PET and how freight, energy costs and economics all play a part in the market The importance of customers finding the right partners to navigate challenges in 2025 The ‘Recycling Revolution’ and the impact of the Single Use Plastics Directive (SUPD) The ‘chaos’ around the lack of legislative clarity facing the PET and R-PET markets in 2025 Suitability of single pellet solutions (SPS) for brands with high recycled content targets.

25-Oct-2024

PRE calls for regulatory intervention to support Europe recycling industry

LONDON (ICIS)–Plastics Recyclers Europe (PRE) has called on the EU to restrict imports of material failing to meet the EU’s environmental requirements to bulwark the industry against recessionary pressures, the industry association said in a press release on Thursday. The press release cited recommendations in a report by Mario Draghi on EU Competitiveness, and stated that “Creating a level playing field will be key to making the green transition sustainable and safeguarding the competitiveness of the EU’s industry in the long run.” The press release also called measures and targets introduced in core EU legislation “unrealistic,” given what it perceives as stalling growth in the sector, “as capacities would need to at least double by 2030.” The press release calls on the recently elected EU institutions to enact immediate measures to “solve the key issues threatening the existing plastics sorting and recycling infrastructure, as well as future investments. Without these measures, the future of European plastic recycling appears uncertain.” PRE listed a number of challenges facing the sector, including limited investment in domestic recycling, an increase in imports of recyclates from outside the EU, and increasing lack of demand for recyclates produced in Europe. “These issues are feeding the existing recession on the market – driving many recycling companies out of business in 2023, with further closures happening or planned in the course of 2024. This downturn will continue unless the situation is addressed urgently,” the press release stated. PRE cited its PRE Plastic Recycling Industry Figures in Europe, 2022 study (the latest year for which data is available) as evidence of underinvestment, highlighting a drop in growth of installed recycling capacity in Europe to 10.6% year-on-year in 2022, down from 17.7% in 2021. PRE estimated year-on-year recycling capacity growth (in millions of tonnes/year) Percentage increase year-on-year 2018 0.6 9.99999 2019 1.9 28.8 2020 1.1 12.94 2021 1.7 17.7 2022 1.2 10.61 Average since 2017 1.3 16.009998 *source: extrapolated from PRE Plastic Recycling Industry Figures in Europe, 2022 European recycling capacity in 2022 stood at 12.5 million tonnes/year, according to PRE estimates. If the 10% growth rate estimated by PRE in 2022 were to continue in the subsequent years to 2030 this would result in a capacity increase to just under 27 million tonnes/year and a growth from 2022 of just over 114%. Nevertheless, if market capacity were to grow at a consistent capacity year-on-year increase to 2022 of 1.2 million tonnes/year, this would result in around 22.1 million tonnes/year of capacity by 2030, an increase from 2022 of just under 77%. The long-term average yearly growth since 2017, according to data from PRE’s study is 1.3 million tonnes/year, this would result in approximately 22.9 million tonnes/year of capacity by 2030 at a consistent rate, an 83% rise in capacity from 2022. Headline figures do not tell the whole picture for recycling capacity because of the wide variation in technical properties of different grades of recycling material, which limit usage of multiple grades in key end-use applications such as packaging. 2022 saw record high prices for recycled polyolefins, and multiyear high prices for R-PET because of supply shortages across the chains and rising demand because of regulatory and consumer pressure. Prices and demand fell back was in 2023 due to the energy cost crisis, followed by the cost-of-living crisis. PRE also named the influx of imports as the primary issue facing the market that needs addressing by regulators. "Many recyclers are struggling to survive in a market flooded with uncontrolled imports that fall short of EU requirements,” Ton Emans, Plastics Recyclers Europe’s President, was quoted as saying in the press release,. As evidence of the damaging role of imports, PRE cited a study it published in February 2024. That study was solely focussed on recycled polyethylene terephthalate (R-PET). High freight costs and unfavorable exchange rates have limited the arrival of imports from Asia in 2024 across recycling markets. But falling freight rates in recent weeks have reopened the arbitrage window for R-PET flakes. Imports of recycled polyolefins in to Europe have historically been considerably less common than imports of R-PET and have been particularly limited in 2024, with macroeconomics largely unfavorable. PRE estimates that recycled polyolefins and R-PET account for around 80% of market capacity for recycled polymers. Demand in 2024 across these recycled polymers has become increasingly fragmented by grade, end-use, location, and individual player circumstances. Buying interest across the majority of non-packaging applications remains weak, with construction offtake particularly limited. Display packaging demand for recycled polyolefins has remained more robust due to the onboarding of projects from the sector during Q4. This has been driven by a variety of factors, including:- The restarting of packaging projects previously delayed in 2023 The approach of 2025 fast-moving consumer goods (FMCG) recycling targets and FMCG players looking to broaden the range of materials they use to help meet those targets Ambitious recycled content mandates forming part of the proposed Packaging and Packaging Waste Regulation (PPWR), which have led some buyers to seek to establish relationships with new suppliers to pre-position themselves R-PET colourless flake and food-grade pellet demand, meanwhile (which typically serve packaging applications), varies from seller to seller with some seeing good demand and order volumes, while others choose to build stock ahead of an anticipated pick up in demand in 2025. Some sellers are less happy with the current mood however, and there are concerns that high stocks and the bearish PET outlook could lead to tougher price talks in November and December. Buyers in the sheet sector, in particular, can afford to be more selective with their R-PET flake purchases as they are not subject to the Single Use Plastics Directive (SUPD) target that requires 25% R-PET in PET beverage bottles from 1 January 2025. Focus article by Mark Victory Additional reporting by Matt Tudball

24-Oct-2024

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