UpdateFormosa wraps up term annual naphtha buying at discounts

13 July 2010 08:16  [Source: ICIS news]

SINGAPORE (ICIS news)--Taiwan’s Formosa Petrochemical Corp (FPC) has wrapped up its term naphtha tender, buying in a total of 1.0-1.5 million tonnes for October 2010 to September 2011 supply at very steep discounts, traders said on Tuesday.

Formosa, which awarded part of the tender last week at a discount of $6/tonne (€4.74/tonne) to Japan quotes CFR (cost and freight), bought the remainder at deeper discounts of $7-8/tonne to Japan quotes CFR, they said.

“The market is bearish to the core. Demand’s relatively down because BTX is getting worst,” said a trader, referring to benzene, toluene and xylene.

The spread between second half August and September contracts plunged to -$7/tonne from -$2/tonne early last week in the wake of Formosa’s 700,000 tonne/year cracker blast, ICIS data showed.

In the aftermath of the explosion which occurred on 7 July, Formosa has shunned the spot market, a move which dampened sentiment as the company is one of Asia’s top naphtha buyers, traders said.

Formosa has two other naphtha crackers on the same Mailiao site, namely the 1.2 million tonnes/year and 1.03 million tonnes/year facilities, ICIS data showed.

($1 = €0.79)

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By: Felicia Loo

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