Formosa eyes term naphtha delivery deferment from Aug to Dec

SINGAPORE (ICIS news)--Taiwan’s Formosa Petrochemical Corp (FPC) would defer the deliveries of some term naphtha supply from August to December, in the aftermath of a cracker explosion in Mailiao last week, traders said on Thursday.

Formosa, whose 700,000 tonnes/year No 1 cracker would likely stay shut for two to three months since the blast on 7 July, was also seeking government approval to postpone the regular maintenance at its 1.03m tonne/year No 2 cracker at the same site.

The No 2 cracker was originally scheduled to be taken off line from August 20-22.

“Formosa has asked many term sellers to defer the delivery of their cargoes because there is too much naphtha inventory,” said a company source, who asked not to be named.

The company also pushed back the period of a recent term tender, in which it bought 1.0-1.5m tonnes of naphtha. Delivery of the term supply would start in January 2011 instead of the planned October 2010, and last through September 2011.

With major buyer Formosa retreating from the spot market, Asian naphtha inter-month price spread tumbled to a discount of $7.50/tonne (€5.9/tonne) on Thursday, from a discount of $2/tonne early last week, ICIS data showed.

($1 = €0.79)

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