UpdateTaiwan’s Formosa buys 150,000 tonnes naphtha for H2 January

15 December 2011 10:21  [Source: ICIS news]

(adds impact on naphtha prices)

SINGAPORE (ICIS)--Taiwan’s Formosa Petrochemical Corporation (FPCC) has bought 150,000 tonnes of spot naphtha for second-half January delivery, after having suspended spot purchases since August, traders said on Thursday.

FPCC has raised the run rates at its three crackers in Mailiao to 85-86% from 80-85% previously, hence the need for the spot barrels, they added.

The cargoes were transacted at a premium of $3.00-3.50/tonne (€2.31-2.70/tonne) to Japan quotes CFR (cost and freight), traders said.

The latest FPCC purchase helped trigger a stronger backwardation in the naphtha market on Thursday. The intermonth spread between the second-half January and second-half February contracts widened $1.00/tonne from Tuesday to $5.50/tonne in backwardation on Wednesday’s close, ICIS data showed.

The naphtha crack spread versus Dubai crude strengthened to $99.58/tonne, the highest since 4 October, according to ICIS.

FPCC ceased spot naphtha imports from August to mid-December because of cracker shutdown issues.

($1 = 0.77)

For more on naphtha/ethylene, visit ICIS chemical intelligence

By: Felicia Loo

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