Taiwan’s FPC runs HDPE, LLDPE units at 90-95%

16 June 2011 07:59  [Source: ICIS news]

SINGAPORE (ICIS)--Taiwan’s Formosa Plastics Corp (FPC) has ramped up the operating rates at its polyethylene (PE) plants at Hai Fong in Mailiao, after the facilities were shut briefly because of poor margins in May, a company source said on Wednesday.

Its PE plants include a 350,000 tonne/year high density PE (HDPE) unit and a 264,000 tonne/year linear low density PE (LLDPE) unit.

The HDPE unit was restarted four days after it was shut on 27 May following a fire, which resulted in the shutdown of the Formosa group’s No 1 700,000 tonne/year cracker at the same site.

FPC’s LLDPE unit, which was also shut on 27 May, was restarted on 1 June.

The operating rates at both units were initially kept at around 80% capacity after they were restarted, he said.

The rates are currently at 90-95%, he added.

“We have been running the PE units at [these] high rates for two weeks to build up our stock levels, [as another] cracker may be possibly shut after the shutdown of other downstream units from 20 June,” the source said.

Nan Ya Plastics, which is a subsidiary of the Formosa group, will shut its No 3 and No 4 monoethylene glycol (MEG) plants at the same site on 20 June for safety checks, in compliance with an order from the Yunlin County government.

FPC's offers for end-June/early-July shipments were at $1,420/tonne (€1,008/tonne) CFR (cost & freight) China for LLDPE film and $1,450/tonne CFR China for HDPE film, the source added.

However, these offers were dismissed by most buyers as the prevailing price level was about $100/tonne lower.

“We are not in a hurry to sell and in order to keep some margins [as a naphtha-based maker], we can’t afford to lower our offers further,” he said.

Imported LLDPE film cargoes were discussed at $1,260-1,300/tonne CFR China, while HDPE film was discussed at $1,300-1,340/tonne CFR China on Thursday.

($1 = €0.71)

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By: Ong Sheau Ling
+65 6780 4359

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