01 August 2011 05:54 [Source: ICIS news]
(Adds details throughout)
By Helen Lee and Judith Wang
The shutdown of the base oil unit has forced the company to cancel all its term and spot base oil shipments scheduled to load after the first week of August.
The company originally planned to export around 45,000 tonnes of the product in August.
However, the group is running its No 2 and No 3 naphtha crackers “normally”, a company source added.
“The crackers are not affected by the blast,” a trader said.
The refinery and naphtha crackers belong to the group’s Formosa Petrochemical Corp (FPCC).
FPCC shut the No 1 cracker for inspections following a previous pipeline fire at the firm’s Mailiao petrochemical complex on 12 May.
FPCC is maintaining operations at its other petrochemical units, company sources said.
The fire has caused uncertainty in the market as
“With the refinery off line, the market will certainly be tightened. Refinery margins in the region will gain,” said Victor Shum from independent energy consulting firm, Purvin & Gertz, in
Given a series of fires that has plagued the Mailiao complex since last year, the
“Local residents must [use] this accident to pressure the government so if the petrochemical plants are ordered to shut down, it will definitely affect the [region’s] petrochemical supply,” said Lu Zhen, an analyst from Shanghai-based fund managing firm, Galaxy Asset Management.
“Discussions with government officials are ongoing and will require some time to navigate,” a source from the group’s Formosa Plastics Corp (FPC) said.
“Even if a decision [to shut down] is reached, there will be more discussions on the course of action because the plants will have to be shut in order,” the FPC source added.
“Given a close distance between
“Imported raw materials may already have been loaded and also outgoing orders have to be dealt with,” according to the FPC source, who added that offers for olefins and derivatives products in China have been suspended pending a clearer outcome of the situation.
Addtional reporting by Felicia Loo, Yeow Pei Lin, Lester Teo and Mahua Charkravarty
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