Formosa to continue running its three naphtha-fed steam crackers at Mailiao at around 80% of capacity through December, January due to weak downstream demand, thin margins

Alison Gallant

LOS ANGELES , November 23, 2011 (Industry Intelligence) – Taiwan-based Formosa Petrochemical expects to continue running its three naphtha-fed steam crackers at Mailiao at around 80% through December and January, Platts reported Nov. 23, citing a source close to the company.

At the end of last month, the company scaled back operating rates from 100% to 80% at the site on weak downstream demand and thin margins.

Platts noted that Formosa’s No. 1 cracker at the site has an annual production capacity of 700,000 tonnes per year of ethylene, 350,000 tonnes/year of propylene and 109,000 tonnes/year of butadiene.

The Mailiao site’s No. 2 cracker can produce 1.03 million tonnes/year of ethylene, 515,000 tonnes/year of propylene and 162,000 tonnes/year of butadiene.

Cracker No. 3 has a production capacity of 1.2 million tonnes/year of ethylene, 600,000 tonnes/year of propylene and 176,000 tonnes/year of butadiene.

Platts also noted that for naphtha-fed steam crackers to break into profitable territory they usually require ethylene prices to be 1.4 times the price of naphtha.

On Nov. 22, naphtha prices settled at US$862/tonne cost and freight Japan, while ethylene prices settled at $1,025/tonne CFR Northeast Asia. The break-even price would have been $1,207/tonne.

The primary source of this article is Platts, New York, New York, Nov. 23, 2011.

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