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

LOS ANGELES , November 23, 2011 () – 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.

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.