Taiwan’s FPC to cut May PP ops to 75% on squeezed margins

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.

FPC’s margins have been squeezed by the recent sharp hikes in propylene feedstock prices, the source said.

“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)

For more on polypropylene, visit ICIS chemical intelligence
Please visit the complete ICIS plants and projects database

By: Chow Bee Lin
+65 6780 4359

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly