01 March 2007 09:09 [Source: ICIS news]
SINGAPORE (ICIS news)--Formosa Petrochemical Corp (FPCC) has increased its usage of liquefied petroleum gas (LPG) as alternative feedstock for its crackers, curbing its appetite to buy naphtha due to high prices and lofty premiums, a company source said on Thursday.
“We have started using more LPG over naphtha for our crackers. We have no plans to buy naphtha now and maybe even in the next one to two months,” the source said.
Cheaper LPG spot prices compared with higher naphtha values prompted FPCC to switch some portion of its cracker feedstock to LPG for petrochemical production.
Open spec naphtha prices – the key benchmark naphtha price in the region – have risen to new highs this month aided by crude values going above $61/bbl and tight regional supply caused by limited exports from ?xml:namespace>
Asia’s open spec naphtha price hovered in the $620-630/tonne CFR (cost and freight)
LPG prices for delivery in March, in comparison, were quoted lower at $525-530/tonne CFR Japan.
The source declined to say how much percentage of LPG it has started cracking, but industry players familiar with the situation said the company could have switched to roughly around 30% of the feedstock requirement it typically uses for naphtha.
The Taiwanese refining and chemicals major operates two crackers in Mai Liao. Its No 1 cracker produces 700,000 tonnes/year of ethylene and the No 2 cracker produces 900,000 tonnes/year of ethylene.
FPCC usually requires between one to two 75,000 tonne naphtha cargoes each month from the spot market, but its naphtha spot requirements had dwindled noticeably since last year.
It last purchased one naphtha cargo for February loading last month, its first spot cargo in more then seven months.
“We will continue to use LPG as our feedstock until such time we think that naphtha is cost-competitive for us to resume buying,” the source said.
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