04 December 2012 09:20 [Source: ICIS news]
SINGAPORE (ICIS)--Taiwan’s Formosa Petrochemical Corp (FPCC) has postponed deliveries of some volumes of its term naphtha supply amid weak margins and lacklustre petrochemical demand, traders said on Tuesday.
FPCC may not even seek spot naphtha supply as the company is considering cutting operating rates at all its three naphtha crackers in Mailiao to 85% from 90% currently, they added.
“They (FPCC) made some postponement of term (naphtha) deliveries,” said one trader.
The volumes of the deferred term supply were not immediately available.
FPCC's 700,000 tonne/year No 1 cracker; 1.03m tonne/year No 2 cracker; and 1.2m tonne/year No 3 cracker in Mailiao operated in November at an average rate of 90% - up by 10 percentage points from October.
On 30 November, ethylene margins based on feedstock naphtha in northeast Asia were at minus $68/tonne, according to ICIS data. Margins were hit by a $25/tonne fall in ethylene spot prices, a 1.6% rise in naphtha costs and a 1.2% fall in co-product credits.
In its previous tender purchase, FPCC bought around 120,000 tonnes of spot naphtha for delivery to Mailiao in the second half of December. The deals for the cargoes were done at a $13-14/tonne (€10-11/tonne) premium to Japan quotes CFR (cost & freight).
($1 = €0.77)
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