26 March 2013 02:16 [Source: ICIS news]
SINGAPORE (ICIS)--Taiwan’s Formosa Petrochemical Corp (FPCC) will shun spot naphtha buying because it will reduce the operating rates at its three naphtha crackers at Mailiao to around 90% capacity in April, traders said on Tuesday.
Eroded margin is the factor for the upcoming run cuts, a company source had said.
“There will be no spot requirements because of the run cuts,” one trader said.
Meanwhile, the three crackers with a combined ethylene nameplate capacity of 2.93m tonnes/year, are running at full tilt.
Ethylene margins based on naphtha feedstock have come under pressure in northeast Asia because of sharp falls in ethylene and co-product prices.
Ethylene margins fell by $90/tonne (€70/tonne) to just $21/tonne during the week ended 15 March, but rebounded to $62/tonne in the week ended 22 March on the back of declining naphtha values, according to data from ICIS.
FPCC previously bought by tender around 100,000 tonnes of spot naphtha supply for delivery to Mailiao in the first half of April. The deals for the cargoes were done at a premium in the low-$20s/tonne to Japan quotes CFR (cost & freight).
($1 = €0.78)
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