lldpe global

7/30/2019 lldPE global

1/25

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__________lldPE_________ ( )

1 , ( 2007-2011 .)

\

,

1 2 3 4 5

1

Consumption of shrink film primarily for the

packaging ,including flexible packaging

industry especially in China and India

-production and consumption ;

75% weight/75% inChina and 69% In

India

The strong development of the Asian,especially

Chinese and Indian packaging industry was adriving force for lldPE consumption in 2007-

2011,accounting for more than 75% of the total

global lldPE consumption in 2007-2011 ;lldPE

was an absolutely preferred material in NorthAmerica and certain parts of Europe,including

West Europe

The Asian lldPE consumption growth of5,3% is attributed mainly to the Chinese

and Indian production and consumption

growth ,first of all using C4based lldPE

as standalone material but also in blendswith other polyolefin types

2

LldPE application in certain areas of injection

moulding was especially preferred in NorthAmerica/USA and Canada/ as well as in West

Europe.In China the share of injectionmoulding application sof lldPE approached

cca. 7%,while that in India cca.8%

10% weight

In 2007-2011 the share of injection mouldingapplication of lldPE approached cca10% ;when

regional fluctuations were relatively high in thissegment of lldPE processing technology

In Asia there is expected a certain

stagnation of the lldPE application for

injection moulding end-uses

3

Global lldPE consumption for rotomouldingshowed a dynamic development netween 2007

and2011,when the main driving factor was the

West European and North European

applications of lldPE for rotomoulding

5 % weight

In terms of absolute volumes China and Indialed the way for this application,when in Chinathe relative share of rotomoulded lldPE was

about 3%as opposed to India,where this

segments lldPE consumption accounted for

about 11% of the total Indian lldPE consumption

Globally the share of rotomoulding grade

lldPE in between 2007 and 2011 was

about 5%

4

Wire and cable applications were a minor

driving segment for the total global lldPE

consumption between 2007 and 2011

3%

Special grades of wire and gable grade lldPE

polymers were applied in the wire and cablesector mainly in some regions of West

Europe,USD,Japan and Korea in low specific

quantities -this segment included mainly C6

type lldPE

In Asia the wire and cable sectorconsumed higher quantities but of lower

grade lldPE in comparison with West

Europe and North America.

5 LldPE consumption in other processingsegments

7%

LldPE found its application in relatively wide

range of end-uses,mainly as in the form of

polyolefin blends

This segment includes lldPE for specialapplications

Total 100%

2


3/25

, 2007-2011 .

. ,

2012-2022 .,

, 2012-2022 .

2012-2022 . ( ).

3


4/25

2 , ( 2007-2011 .)

\

,

1 2 3 4 5

1 European Naphtha pricingLldPE pricemovement,change /in% of value/ +16%

Especially in Europe the increasing

naphtha/ethylene prices resulted acca.16%increase in lldPE pricing between

2007 and 2011;naphtha is still the most widely

used raw material for lldPE production

Naphtha shortage in Europe impacted not

only the production of ethylene and itsderivatives but also the output propyleneand butadiene downstream based products

2 Asian ethane pricing

LldPE price

movement,change/in% of value / -10%

In Asia the naphtha price increase impact was

less important,since the continent relied alsoon ethane derived lldPE supplies from the

Middle East as well as coal deived ethylene/especially in China/as feedstock ,thus in Asia

there was recorded a cca. 10%

lldPE/especially C4 type/price drop%

In the second half of the period of 2007-2011 there were said some restrictions

imposed on especially the Saudi ethane

sources,so the future availability of this raw

material may be in jeopardy,similarly as in

Canada/Alberta province.

3 CIS region naphtha pricingLldPE price

movement,/change in

% of value/

LldPE priceremained relatively flat in theinvestigated period in the regions of the CIS;

which may be attributed to the cheaper localnaphtha but also to the entrance of the Russian

federation to the WTO in the scrutinized

period of 2007 and 2011

As for the CIS region,generally in

petrochemicals egment of the industry therewere not experienced naphtha raw material

shortages for lldPE production

4South and Central America naphtha and ethane

pricing

lldPE price

movement,change in

%of value / +5%

The continent was exposed mainly to theincreasing naphtha derived ethylene price

increase,although to the lesser extent,than the

North American continent ;lldPE prices rose

by about 5% here

In Central and South America naphtha

retained its key importance as the main

lldPE production feedstock

5 North America naphtha pricing

LldPE price

movement,change in

% of value /+15%

The North American lldPE price development

was particularly exposed to the naphtha price

increase as well as to the loosely depleting

ethane reserves in the Prentiss/Joffre Alberta

Canada region ; plants are located on the

vulnerable Gulf Coast running mainly onnaphtha based ethylene as feedstock ;in

Canada as mentioned large capacities of lldPEare running on ever hardly available ethane p

The North American naphtha pricing was

and the slowly depleting ethane sources of

Alberta were in particular harmful to the

profitability of lldPE production in thiscontinent between 2007 and 2011

4


5/25

, 2007-2011 .

. ,

2012-2022 ., ,

2012-2022 .

2012-2022 . ( ).

5


6/25

3 ( 2012-2022

. ) base scenario

\

, %,

100% -

%

1 2 3 4 5 6 7

1

Consumption of lldPE C4 based

shrink films primarily forflexible packaging , especially in

China -production and

consumption ;in global terms

there is estimated cca. 70%of

lldPE consumed will be C4 type

material,about 20% C6 type andthe remaining 10% will be

provided by C8 octene typelldPE with metallocene types

production growing

exceptionally strongly in some

parts of the world

80% weight

The strong development of the

Asian,especially Chinese and

Indian flexible packaging

industry will be a drivingforce for lldPE consumption in

2012-2022,accounting for

more than 51% of the total

global lldPE consumption in

2012-2022 ;in India the

prevailing lldPE type willremain the C4 based polymer

similarly as in China,although

in some packagingapplications the C6 or

superhexene type lldPE

polymer will show a strong

growth

80%

The Asian lldPE consumption

growth of 4%-5%% is

attributed mainly to the

Chinese lldPE production and

consumption growth ,the

country will become more selfsustainable in lldPE

consumption too,but huge

quantities of lldPE importsespacilly from the Middle East

and potentially from North

America remain an important

factor,

As seen,the lldPE use for

extrusion as well as

special blown film

applications will be the

major driving segment ofthe global lldPE

consumption in 2012 and2022

SRIConsulting,Menl

o ParkCalifornia

2Consumption of lldPE by

injection moulding processing

technology

10% weight

In 2012-2022 the production

of injection moulded lldPE

parts accounts for about 10%

of the total global lldPE

consumption,especially Asia,in particular India ,

China,Korea,Thailandconsumption growth will the

driving force of lldPE

consumption in this segment

10%

In terms of volume

production and consumptiongrowth will also be attributed

to the Asian lldPEconsumption growth in this

segment in 2012-

2022,especially in

India,Thialand,Indonesia andChina

There is anticipated an

increasing quantity oflldPE consumption in

special injectionmoulding applications in

compounds withelastomers and/or

plastomers for high tech

applications

SRIConsulting,Menl

o Park

California

6


7/25

3

Global lldPE consumption for

rotomoulding will show a

dynamic development between

2012 and 2022,when the main

driving factor will be the Asian

and South American continent

5 % weight

In terms of absolute volumes

China and India will led the

way for this application,whenin China the relative share of

rotomoulded lldPE will be

about 4% as opposed to

India,where this segments

lldPE consumption will

account for about 7% of thetotal Indian lldPE

consumption

Globally the share of

rotomoulding grade lldPE in

between 2012 and 2022 will

be about about 5%

High quality,specialgrades of lldPE for the

rotomoulding sector are

expected to be exported

especially by the

revamped North

American capacities

SRIConsulting,Menl

o Park

California

4

Wire and cable applications willremain a minor driving segment

for the total glopal lldPE

consumption between 2012 and

2022

5%

Special grades of wire and

gable grade lldPE polymers

are applied in the wire and

cable sector mainly in someregions of West

Europe,USD,Japan and Korea

as well as in other countries of

the Pacific Rims Asia

part,this segment includes

mainly C6 type lldPE

In Asia the wire and cable

sector will consume largerquantities but of lower grade

lldPE in comparison with

West Europe and North

America.

The consumption of

lldPE in the wire andcable industry will be

driven by the use of

metallocene type

material based on

proprietary technology

SRIConsulting,Menl

o Park

California

Total 100%

, 2007-2011 . ( 1).

7


8/25

4a ( 2012-2022

. ) positive scenario

\

, %,

100% -

%

1 2 3 4 5 6 7

1


shrink films primarily for

flexible packaging , especially inChina -production and

consumption ;in global termsthere is estimated cca. 60%of


material,about 25% C6 type and

the remaining 15% will be


production growing

exceptionally strongly in some

parts of the world

77% weight

The strong development of the

Asian,especially Chinese and

Indian flexible packaging

industry will be a drivingforce for lldPE consumption in

2012-2022,accounting for

more than 58% of the total

global lldPE consumption in

2012-2022 ;in India the

prevailing lldPE type will

remain the C4 based polymer

similarly as in China,althoughin some packaging

applications the C6 or

superhexene type lldPE

polymer will show a strong

growth

77%

The Asian lldPE consumptiongrowth of 6,2% is attributed

mainly to the Chinese andIndian lldPE production and

consumption growth ,the

country will become more self

sustainable in lldPE

consumption too,but hugequantities of lldPE imports

espacilly from the Middle East

and from North

America/mainly metallocene

type lldPE/ will be an

important factor,


extrusion as well asspecial blown film

applications will be the

major driving segment of

the global lldPE

consumption in 2012 and

2022 ,when in this

positive scenario the

share of metallocenetype lldPE in the total

global consumption of

lldPE will be about 22%

SRI

Consulting,Menl

o Park

California

2

Consumption of lldPE by

injection moulding processingtechnology

11% weight

In 2012-2022 the production




consumption,especially Asia,

in particular India ,China,Korea,Thailand

consumption growth will the

driving force of lldPE


11%

In terms of volume

production and consumption

growth will also be attributed

to the Asian lldPEconsumption growth in this

segment in 2012-

2022,especially in

India,Thailand,Indonesia and

China


increasing quantity of

lldPE consumption in

special injection

moulding applications in

compounds withelastomers and/or

plastomers for high tech

applications ,including

metallocene blends

SRI

Consulting,Menl

o Park

California

8


9/25

3



dynamic development between

2012 and 2022,when the main

driving factor will be the Asian

and South American continent

5 % weight

In terms of absolute volumes

China and India will lead the

way for this application,whenin China the relative share of

rotomoulded lldPE will be





consumption




be about about 5%

High quality,including

special grades of lldPEfor the flexible

packaging and some

sectors of rotomoulding

processing are expected

to be exported especially

by the revamped NorthAmerican capacities

SRI

Consulting,Menl

o Park

California

4


for the total glopal lldPE

consumption between 2012 and

2022

5%


gable grade lldPE polymers

will applied in the wire and

cable sector mainly in someregions of West

Europe,USD,Japan and Korea





In Asia the wire and cablesector will consume larger

quantities of lower grade as

well as increasing quantities of

high-end type lldPE

The consumption of


driven by the use of

metallocene type

material based on


SRI

Consulting,Menl

o Park

California

5 Other applications 2% This segment will shrunk toabout 2% in global terms

5 Total 100%

9


10/25

5b ( 2012-

2022 . ) negative scenario

\

, %,

100% -

%

1 2 3 4 5 6 7

1


shrink films primarily for

flexible packaging , especially inChina -production andconsumption ;in global terms

there is estimated cca. 75%of


material,about 15% C6 type and

the remaining 10% will be


production growing less thananticipated ;

77% weight

The slower development of

the Asian,especially Chinese

and Indian flexible packaging

industry will be the main

factors of Asias lldPEconsumption slowdown to3,7% in 2012-

2022,accounting for about

50% of the total global lldPE

consumption in 2012-2022 ;in

India the prevailing lldPE type

will remain the C4 basedpolymer similarly as in

China,wher the predictedgrowth rate of C6 type lldPE

consumption will not

materialize.

77%

The Asian lldPE consumption

slowdown of 3,7% isattributed mainly to theChinese and Indian lldPE


slowdown despite these

negative numbers, China as

well as India will become

more and more selfsustainable in lldPE

production,although in termsof volumes still large

quantities of lldPE will be

imported from the Middle East

and North America


extrusion as well as

special blown filmapplications will be themajor driving segment of

the global lldPE

consumption in 2012 and

2022 ,when in this

negative scenario the

share of metallocenetype lldPE in the total

global consumption oflldPE will be about 17%

SRIConsulting,Menl

o Park

California

2 Consumption of lldPE by

injection moulding processing

technology

11% weight In 2012-2022 the production




consumption,especially Asia,

11%

In terms of volume



increasing quantity of

lldPE consumption in

special injection

moulding applications in

SRIConsulting,Menl

o Park

California

10


11/25

in particular India ,

China,Korea,Thailand

consumption growth will thedriving force of lldPE


drop will also be attributed to

the Asian lldPE consumptiongrowth of just 3,7%

compounds with

elastomers and/or

plastomers for high techapplications ,including

metallocene blends

3



slowing down developmentbetween 2012 and

2022,especially because of the

accumulated macroeconomic

problems of the US and Europe

pulling along to a certain extentAsia,too

5 % weight

In terms of absolute volumesChina and India will lead the

way for this application,when

in China the relative share ofrotomoulded lldPE will be





consumption




be about about 5%

High quality,including

special grades of lldPEfor the flexible

packaging and somesectors of rotomoulding

processing are expected

to be exported especially

by the established

Middle East ;largely

speaking East ofSuez,including Iran

regional capacities

SRIConsulting,Menl

o Park

California

4


for the total glopal lldPEconsumption between 2012 and

2022

5%


gable grade lldPE polymerswill applied in the wire and

cable sector mainly in some

regions of WestEurope,USD,Japan and Korea





In Asia the wire and cablesector will consume larger

quantities of lower grade aswell as increasing quantities of

high-end type lldPE

The consumption of


driven by the use ofmetallocene type

material based on


SRIConsulting,Menl

o Park

California

5 Other applications 2%This segment will shrunk to

about 2% in global terms

SRIConsulting,Menl

o Park

California

Total 100%

11


12/25

6 ( 2012-2022 .

)-base scenario

\

, %,

100% -

%

1 2 3 4 5 6 7

1 European Naphtha pricing LldPE price

movement,change/in % of value/

-13%

The-13% lldPE price

drop Europeanticipating a

stagnating lldPEconsumption,while

the production willbe based partly on

captive

naphtha,imported

naphtha and

70%

Dependence on naphthaderived ethylene price ,in

other words lldPE price willbe dependent as much as 70%

on naphtha price,the rerst of30% is provided by imported

ethane price

As mentioned, there is

anticipated that lldPEprice to a certain extent

decouples from thenaphtha price due to

prognosticated ethaneimports ,in other words

there is anticipated

Europe faces further raw

material difficulties to a

SRIConsulting,Menlo

Park Calif SRIConsulting,Menlo

Park California

ornia

12


13/25

foremost on

imported

ethane/NorthAmerica/ /or

ethylene

certain extent alleviated

by North Americanethane imports

2

Asian plus Middle East ethane

pricing plus Middle Eastimported ethane based lldPE

pricing and

lldPE pricemovement,change/in

% of value / -8%

For the Asian

continentlldPEprices are projected

to drop by -8%-10%because of some

decoupling from

naphtha prices and

moving toward

ethane /including

major new Thailandethane based

ethylene

capacities/

,coal,methanol and

unconventional

renewable as lldPE

production

productionfeedstock,especially

in China

50% price dependence on

naphtha prices,the rest of 40%is provided by dependences

on ethane as well as mainly

cola and methanol prices

It is expected in the total

Asian lldPE production

/including Middle East/

about 40% of lldPE totalproduced would come

from ethane,cca 50%

from naphtha and 10%

from unconventional raw

material

SRIConsulting,Menlo

Park California

3 CIS region naphtha pricing

lldPE price

movement,/change

in % of value/ -1%

For the CIS region

there is projected a-1% lldPE price

drop attributed to thefull upstream raw

material integration

of the local lldPE

producer

Approximately70%

For this period there isanticipated that 70% of

lldPE produced would bebased on naphtha derived

ethylene ,the rest of

30%on ethane

SRIConsulting,Menlo

Park California

4 South and Central America

naphtha and ethane pricing

lldPE price

movement,change in%of value / -6%

The Central and

South AmericanlldPE price will drop

by 6% mainly

because of raw

materialdiversification

70% In Central and South

America about 70 % oftotal lldPE produced

will come from

naphtha,25% from

ethane and the rest 5%from renewable raw

SRIConsulting,Menlo

Park California

13


14/25

efforts/especially

ethane and sugar

cane derivedethanol/

materials

5North America naphtha pricing,

North America ethane pricing

lldPE price

movement,change in

% of value /-30%

The North American

lldPE price will be a

mix of prices basedpartly on naphtha

but foremost and

primarily on ethanederived ethylene,this

this price will be

composed of cca.

80% ethane and

20% naphthaprices;therefore

there is expected a

lldPE price drop by

probably more than

5%,projected in this

base scenario

80% deepndance on ethane

pricing

In North America about80% of lldPE produced

would come from the so

intensely and

vehemently advertised

new shale gas ethane ifeverything goes

well.. ???

SRIConsulting,Menlo

Park California

14


15/25

7a ( 2012-2022 .

) positive scenario

\

, %,

100% -

%

1 2 3 4 5 6 7

1 European Naphtha pricing

lldPE pricemovement,change

/in % of value/

-13%

The-13% lldPE pricedrop Europe

anticipating a

stagnating lldPE

consumption,while

the production will

be based partly oncaptive

naphtha,importednaphtha and

foremost onimported

ethane/North

America/ /or

ethylene

70%

Dependence on naphtha

derived ethylene price ,in

other words lldPE price willbe dependent as much as 70%

on naphtrha price,the rerst of

30% is provided by imported

ethane price

As mentioned, there is

anticipated that lldPE

price to a certain extent

decouples from the

naphtha price due to

prognosticated ethaneimports ,in other words

there is anticipatedEurope faces further raw

material difficulties to acertain extent alleviated

by North American

ethane imports

SRIConsulting,Menlo

Park California

2 Asian plus Middle East ethane

pricing plus Middle East

imported ethane based lldPE

pricing and

lldPE price

movement,change/in

% of value / -8%

For the Asian

continentlldPE

prices are projected

to drop by -8%-10%because of some

decoupling fromnaphtha prices and

moving toward

ethane /includingmajor new Thailand

ethane based

ethylenecapacities/

50% price dependence on

naphtha prices,the rest of 40%

is provided by dependences

on ethane as well as mainlycola and methanol prices



/including Middle East/

about 40% of lldPE totalproduced would come

from ethane,cca 50%from naphtha and 10%


material

SRIConsulting,Menlo

Park California

15


16/25

,coal,methanol and

unconventional

renewable as lldPEproduction

production

feedstock,especially

in China

3 CIS region naphtha pricing

lldPE price

movement,/change

in % of value/ -1%

For the CIS region

there is projected a

-1% lldPE pricedrop attributed to the

full upstream raw


of the local lldPE

producer

Approximately

70%

For this period there is

anticipated that 70% oflldPE produced would be

based on naphtha derived

ethylene ,the rest of

30%on ethane

SRIConsulting,Menlo

Park California

4South and Central Americanaphtha and ethane pricing

lldPE price

movement,change in%of value / -6%

The Central and

South American

lldPE price will drop

by 6% mainlybecause of raw

materialdiversification

efforts/especially

ethane and sugar

cane derived

ethanol/

70%

In Central and South

America about 70 % oftotal lldPE produced

will come fromnaphtha,25% from

ethane and the rest 5%from renewable raw

materials

SRIConsulting,Menlo

Park California

5 North America naphtha pricing,

North America ethane pricing

lldPE price

movement,change in

% of value /-4%-

5%

The North American

lldPE price will be a

mix of prices based

partly on naphtha

but foremost and

primarily on ethane

derived ethylene,thisthis price will be

composed of cca.80% ethane and

20% naphtha

prices;therefore

there is expected alldPE price drop by

80% dependance on ethane

pricing

In North America about

80% of lldPE produced

would come from the so

intensely and vehemently

advertised new shale gas

ethane if everything

goes well.. ???

SRIConsulting,Menlo

Park California

16


17/25

probably more than

5%,projected in this

base scenario

8b ( 2012-2022 .

) negative scenario

\

, %,

100% -

%

1 2 3 4 5 6 7

1 European Naphtha pricing lldPE price

movement,change/in % of value/

There will be a

-11% lldPE pricedrop in Europe

85 In Europe,according to

this scenario there isanticipated about 5% of

SRIConsulting,Menlo

Park California

17


18/25

-11%,but in absolute

terms and values the

price of lldPE willbe higher by aboutcca. 4%-5% in

comparison with the

base scenario

anticipating a

dereasing lldPE

production based onimported ethane

and/or ethylene/see

Ineos ethane

investments at

Bamble and in

particular

Antwerpen to importethane and ethyleneto Europe from the

US,Middle East/

,thus in comparison

with the base

scenario there will

be more lldPEproduced based on

naphtha derivedethylene

lldPE might be produced

from imported

ethane/ethylene based

raw material ,the restfrom naphtha so a sligheasing on price pressure

but still not enough/this

is why this is a negative

scenario for Europe

2 Asian ethane pricing

lldPE price

movement,change/in

% of value -8%/

For the Asian

continent lldPEprices are projected

to drop by 8% first

of all because the

increased amounts

of lldPE produced

from ethylene basedethane,by

unconventionalprocesses of CTM

ans well as CTO in

particular in China

80



/including Middle East/about 40% of lldPE total

produced would come

from ethane,cca 50%

from naphtha and 10%


material,thus naphthapressure on lldPE prices

will not be so muchdominant ,but

stillremains the primary

raw material for lldPE

production

SRIConsulting,Menlo

Park California

3 CIS region naphtha pricing LldPE price

movement,/change

in % of value/ 1%

For the CIS region

there is projected a

1% price rise

attributed to the full

upstream raw

90 For this period there is

anticipated that 90% of

lldPE produced would

be based on naphtha

derived ethylene

SRIConsulting,Menlo

Park California

18


19/25


of the local MEG

producer

4South and Central Americanaphtha and ethane pricing

lldPE pricemovement,change in

%of value / -1%

The Central and

South American

lldPE price will

drop by 1% mainlybecause of the

dominant character

of naphtha asprincipal feedstock

90

In Central and South

America about 90 % of

total lldPE producedwill come from

naphtha,10% from

ethane and renewableraw materials

SRIConsulting,Menlo

Park California

5North America naphtha pricing,North America ethane pricing

lldPE price

movement,change in% of value /-2%

The North American

lldPE price will be amix of prices based

on naphtha and

ethane derived

ethylene,which will

be composed of cca.

35% ethane derivedprices;therefore

there is expected amedium drop of

-2% drop/some

ethane projected

lldPE plants will not

be built at all or

suffer delay,orethane will be

primarily exported

55% dependence on naphthapricing

In North America about45% of lldPE produced

would come from the sointensely advertised new

shale gas ethane and therest from naphtha ;

SRIConsulting,Menlo

Park California

19


20/25

, 2007-2011 . ( 2).

20


21/25

9 2012-2022

\

*1

*1

*1

1 2 3 4 5 6 7 8 9 10

. ,

, .

: .

, 2007-2011 . ( 1).

(, ) ,

. , , .!!! .

*1 , 2012-2022 ., , 3% .

, , . .

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

.

21


22/25

10 2012-2022

\

*1

*1

*1

1 2 3 4 5 6 7 8 9 10

. ,

, .

: .

, 2007-2011 . ( 2).

(, ) ,

. , ,

.!!! .

*1 , 2012-2022 ., , 3% .

, , . .

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

.

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.

, . , .

, 2012 .

bn=(bn-1)*Kbn ,

bn (2012 ) ;

(bn-1) , ;

Kbn , (

, . ).

, 2012 .

on=(bn-1)*Kbn*Won ,

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on (2012 ) ;

(bn-1) ,

Kbn , (

, . ));

Won - , (

5%, 1% ( 4%). ,

, 1% 5%, , Won 1,05.

rbn= bn*R

rbn (2012 ) ;

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bn (2012 ) ;

R ( 2011).

25

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