UpdateTaiwan’s FPCC mulls further cracker rate cuts from current 90%

11 May 2012 05:08  [Source: ICIS news]

(adds current current prices of ethylene, propylene)

SINGAPORE (ICIS)--Taiwan’s Formosa Petrochemical Corp (FPCC) is mulling a further reduction in operating rates across its three naphtha crackers in Mailiao because of sharp declines in olefins prices, a company source said on Friday.

The company trimmed cracker production to 90% of capacity earlier this month, the source said.

“We are considering to lower the cracker operating rates further to 85%,” the source said in Mandarin.

FPCC has a 700,000 tonne/year No 1 cracker, a 1.03m tonne/year No 2 cracker and a 1.2m tonne/year No 3 cracker in Mailiao that operated at 95-100% in April, the source said.

At midday on Friday, ethylene spot discussions hovered at $1,250-1,270/tonne (€963-978/tonne) CFR (cost and freight) NE (northeast) Asia, while propylene is being quoted at around $1,310-1,340/tonne CFR NE Asia.

The current price levels represent a decline of around $40-50/tonne for ethylene, and a drop of nearly $100/tonne for propylene on a weekly basis, according to ICIS.

Naphtha cracker operators in Asia had earlier enjoyed higher margins because of the recent slump in feedstock naphtha prices. But they are now facing the heat from the sharp declines in olefins prices this week.

Ethylene margins based on naphtha feedstock in northeast Asia rose by almost $60/tonne to $203/tonne during the week ended 4 May, while margins in southeast Asia were up $26/tonne at $210/tonne, according to data from ICIS.

($1 = €0.77)

By: Peh Soo Hwee
+65 6780 4359

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