13 May 2011 08:49 [Source: ICIS news]
SINGAPORE (ICIS)--Taiwan’s Formosa Plastics Corporation (FPC) has been running its polypropylene (PP) facility at Linyuan at 75% capacity since early May and will maintain the same operating rate until the end of May because of squeezed margins, a company source said on Friday.
“We won’t be able to cover our costs at the current propylene prices, even if we sold PP at $1,720/tonne (€1,204/tonne) FOB (free on board) Taiwan,” the source said.
The source declined to reveal FPC’s propylene feedstock cost for May, but he said naphtha-based producers in Asia typically need a propylene/PP spread of at least $120/tonne to justify PP production.
FPC’s PP facility at Linyuan comprises a 230,000 tonne/year line and a 120,000 tonne/year plant, according to ICIS data.
The producer had run its PP plants at 80% capacity in April, down from its usual operating rate of 100%, because of thin margins, the source said.
($1 = €0.70)
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