Taiwan’s Formosa seeks LPG for mid-June delivery

20 May 2008 04:59  [Source: ICIS news]

SINGAPORE (ICIS news)--Taiwan's Formosa Petrochemical Corp (FPCC) is seeking about 20,000 tonnes of liquefied petroleum gas (LPG) for delivery in mid-June, industry sources said on Tuesday.

Petrochemical firms usually consider switching to LPG when prices for the alternative feedstock drop to about 90%of naphtha prices. On Friday, butane was at around 88% while propane prices were seen at around 87% of naphtha prices on a CFR (cost and freight) Japan basis.

FPCC previously bought 44,000 tonnes of LPG for delivery in the first half of May in a bid to replace naphtha feedstock.

The company, Asia's largest ethylene producer, had recently bought about 100,000-150,000 tonnes of naphtha for delivery over the second half of June to early July.

Northeast Asian petrochemical firms in general can use LPG for up to about 20% of total feedstock volumes on average.

The margins for aromatics were not good, so it made sense to use LPG, which yields higher ethylene and more olefins, sources said.

But, they would still have to use the expensive naphtha feedstock as they could only replace 20% of their feedstock requirements with LPG, another source added.

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By: Desmond Chia
+65 6780 4359

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