Taiwan’s Formosa mulls cracker run cuts on soaring naphtha

06 January 2011 09:02  [Source: ICIS news]

SINGAPORE (ICIS)--Taiwan’s Formosa Petrochemical Corp (FPCC) plans to cut runs at its three naphtha crackers in Mailiao as soaring feedstock prices eat into derivatives, industry sources said on Thursday.

The crackers, which can produce a total of 2.93m tonnes/year of ethylene, are operating at 100%, they added.

“There is hardly any margin for the crackers,” said the source.

Company officials could not be immediately reached for comment. It was not known when the operating rates would be reduced.

Meanwhile, ethylene prices in Asia were unchanged on Wednesday at $1,180-1,220/tonne (€897-927/tonne) CFR (cost & freight) NE (northeast) Asia, ICIS data showed.

But, on the other hand, naphtha prices marched higher to close at $885.50/tonne CFR Japan from $882.25/tonne last week, buoyed by strong crude futures at above $90/bbl, the data showed.

The naphtha crack spread soared to $186.35/tonne versus Brent crude on Wednesday, the highest in nearly three years, according to ICIS.

“Naphtha seems too expensive,” another source added.

FPCC bought 75,000-100,000 tonnes of spot naphtha at market quotes plus $6/tonne CFR Japan this week, for delivery in the first half of February, the source said.

($1 = €0.76)

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By: Felicia Loo

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