UpdateShutdown at Taiwan’s Formosa No 1 cracker to last a month

08 July 2010 09:24  [Source: ICIS news]

(adds further details, state of naphtha and ethylene markets)

By Felicia Loo

SINGAPORE (ICIS news)--Taiwan’s Formosa Petrochemical Corp (FPC) will shut its 700,000 tonne/year No 1 naphtha cracker for a month, following a blast on Wednesday, a company source said on Thursday.

The explosion was caused by leakage at the cracker’s distillation tower, while Formosa’s two other crackers, also in Mailiao, were operating at full tilt.

“The fire has been extinguished. There is a need to change the damaged parts and testing will be needed. So the shutdown will be a month,” the source said.

Formosa’s No 2 cracker has a nameplate ethylene capacity of 1.03m tonnes/year, which was scheduled for a regular maintenance in August but the company is considering a postponement due to the outage.

“It’s not clear at this stage,” said the source, referring to the No 2 cracker turnaround.

Formosa’s biggest cracker No 3 cracker boasts of a nameplate capacity of 1.2m tonnes/year of ethylene.

Naphtha price spreads in the Asian market continued to fall deeper into a wide discount on Thursday, with the first-half August and second-half September contracts widening to -$3.50/tonne from -$2/tonne on the previous session, ICIS data showed.

“The market’s already bearish and now with Formosa’s woes, it will be worst,” said a trader.

In a meeting held Thursday afternoon, FPC asked its customers to submit plans detailing their feedstock requirements for the second half of this year, said a source close to the company.

There was no mention of having to buy any spot ethylene or propylene cargoes for downstream needs, the source said.

“There should be sufficient ethylene and propylene inventories in Mailiao to last into August for derivative operations,” he added

Separately, market sources said no ethylene discussions were heard but there was some possibility of purchasing spot propylene cargoes for Formosa’s 160,000 tonne/year crude acrylic acid plant in Ningbo, China.

Formosa also runs a 450,000 tonne/year polypropylene (PP) plant in the same area but no spot volumes were needed due to high polymer inventories, they added.

Propylene offers/selling ideas were mentioned at close to $1,050/tonne (€830/tonne) CFR China, slightly firmer compared with discussions at $1,020-1,050/tonne CFR China earlier in the week.

($1 = €0.79)

With additional reporting by Peh Soo Hwee

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By: Felicia Loo

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