20 December 2012 02:11 [Source: ICIS news]
SINGAPORE (ICIS)--Taiwan’s Formosa Petrochemical Corp (FPCC) has bought by tender 120,000-150,000 tonnes of spot naphtha for delivery to Mailiao from second half of January to early February, traders said on Thursday.
The deals for the cargoes were done at a premium of $11-12/tonne (€8-9/tonne) to Japan quotes CFR (cost & freight), traders said.
FPCC previously bought by tender around 120,000 tonnes of spot naphtha for delivery to Mailiao in the second half of December, at premiums of $13-14/tonne to Japan quotes CFR.
Supply was extremely tight then, hence the premium was higher in the previous tender, traders said.
The tight supply situation has now eased, however, there is not much supply from the Middle East because of refinery maintenance, they added.
FPCC plans to increase the operating rate at all its three naphtha crackers in Mailiao to above 90% in January, because of improved margins, a company source said on 18 December.
The crackers are running at 85% of capacity this month.
FPCC operates 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.
Ethylene margins in northeast Asia based on naphtha feedstock rose by $58/tonne to $100/tonne during the week ended 14 December, led by an increase in ethylene prices and a slight decline in raw material costs, according to ICIS data.
Ethylene spot prices rose $50/tonne to $1,250-1,300/tonne CFR NE Asia in the same period on the back of reduced supply in the region due to cracker operating rate cuts this month and an increase in the prices of key derivatives such as high density polyethylene.
($1 = €0.75)
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