Formosa to increase capacity utilisation at its refinery in Taiwan to 74% in May

MOSCOW (MRC) -- Taiwan's Formosa Petrochemical Corp plans to ramp up operating rates at its refinery in May to 74% once it restarts a gasoline-making unit after maintenance and as refining margins have improved, reported Reuters with reference to the company's spokesman.

Formosa plans to process 400,000 barrels per day (bpd) of crude in May, or 74% of its total capacity, up from 340,000 bpd in March and April, spokesman KY Lin told Reuters.

The higher utilization rate comes as Asian gasoline refining margins have returned to pre-COVID-19 levels.

Formosa is among the largest oil products exporters in Asia and a ramp-up in its output is expected to lead to more exports.

Formosa's refinery has been operating at about 60% between February and April due to maintenance, while its No.2 residue desulphuriser unit is undergoing repairs following a fire in July. "Our RCC (residue catalytic cracker) will resume operations in May so we'll process some sweet crude," Lin said, adding that prices for gasoline and propylene, a petrochemical feedstock, produced from the RCC are favourable.

Formosa operates three crude distillation units with a capacity of 180,000 bpd each at its complex in Mailiao.

As MRC informed earlier, Formosa Plastics Company (FPC), part of Formosa Petrochemical, expects to resume 100% capacity utilisation at its No. 1 cracker in Mailiao, Taiwan in a couple of days after restart. This cracker was unexpectedly taken off-stream on 12 April 2021 due to an unspecified technical issue and resumed operations on 19 April 2021. The No. 1 cracker has an annual capacity of 700,000 tons of ethylene and 350,000 tons of propylene.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated polyethylene (PE) consumption totalled 356,370 tonnes in the first two month of 2021, down by 9% year on year. Shipments of exclusively low density polyethylene (LDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market was 246,870 tonnes in January-February 2021, up by 30% year on year. Supply of homopolymer PP and PP block copolymers increased.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company"s plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
MRC

COVID-19 - News digest as of 20.04.2021

1. Crude futures fall as COVID-19 pandemic concerns mar bullish economic outlook

MOSCOW (MRC) -- Crude oil futures slipped during mid-morning Asian trade April 19, as concerns on the COVID-19 pandemic front pulled the market back after it ended higher last week on bullish data releases and improved demand forecasts, reported S&P Global. At 10:55 am Singapore time (0255 GMT), the ICE Brent June contract was 20 cents/b (0.28%) lower than the April 16 settle at USD66.57/b, while the May NYMEX light sweet crude contract was 11 cents/b (0.17%) lower at USD63.02/b. COVID-19 cases in key European economies, such as Germany and France, remain elevated, while analysts expressed further concerns over the rise in case numbers in India and Japan. India reported a record high 261,394 cases on April 17, latest data from John Hopkins University showed. The data also showed that cases in Japan have crept up to 4,802 by April 17, the highest on record since late January.

2. Asia Distillates-Jet cracks continue going down on worries of renewed coronavirus lockdowns

MOSCOW (MRC) -- Asian refining margins for jet fuel decreased for a second straight session on Friday, weighed by worries that renewed coronavirus lockdowns in several markets would dampen aviation demand recovery, reported Reuters. Refining margins, or cracks, for jet fuel dropped to USD4.59 per barrel over Dubai crude during Asian trading hours, 15 cents lower from Thursday. Jet cracks have gained 10% this week, but still remain 63% lower than the ten-year seasonal average for this time of the year, Refinitiv Eikon data showed. While pockets of demand have emerged from some domestic routes, a majority of international flights remain grounded due to prolonged border restrictions amid fresh virus waves in many parts of Asia. Business travel is still being avoided as much as possible across sectors.

MRC

Formosa to reach full capacity utilisation at No.1 cracker in Mailiao after restart

MOSCOW (MRC) -- Formosa Plastics Company (FPC), part of Formosa Petrochemical, expects to resume 100% capacity utilisation at its No. 1 cracker in Mailiao, Taiwan in a couple of days, reported Reuters with reference to the company's spokesman.

This cracker was unexpectedly taken off-stream on 12 April 2021 due to an unspecified technical issue and resumed operations on 19 April 2021.

The No. 1 cracker has an annual capacity of 700,000 tons of ethylene and 350,000 tons of propylene.

As MRC wrote before, FPC shut down its No.2 cracker in Taiwan on 1 June, 2020. No reason for unplanned closure was given then. The cracker was dle during one week. Located at Mailiao in Taiwan, the No.2 cracker has an ethylene production capacity of 1.03 million mt/year, propylene production capacity of 515,000 mt/year and butadiene production capacity of 162,000 mt/year.

Besides, FPCC undertook a planned shutdown at its No.3 cracker in Mailiao on August 11, 2020. The cracker remained off-line till end-September, 2020. Located at Mailiao in Taiwan, the No. 3 cracker has an ethylene production capacity of 1.2 million mt/year and propylene production capacity of 600,000 mt/year.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated polyethylene (PE) consumption totalled 356,370 tonnes in the first two month of 2021, down by 9% year on year. Shipments of exclusively low density polyethylene (LDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market was 246,870 tonnes in January-February 2021, up by 30% year on year. Supply of homopolymer PP and PP block copolymers increased.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company"s plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
MRC

Nan Ya Plastics to restart its new MEG plant in Texas

MOSCOW (MRC) -- The restart of Formosa's ethylene cracker in Point Comfort, Texas, USA, completed the week of April 5, is expected to allow Nan Ya Plastics, Formosa's sister company, to restart its new monoethylene glycol (MEG) unit at the same site, reported S&P Global with reference to sources, familiar with the plant's operations.

This plant with the capacity of 800,000 mt/year of MEG was shut im mid-February because of deep freeze in the region.

Meanwhile, Nan Ya Plastic's smaller 370,000 mt/year MEG plant is expected to remain shut until mid-summer, said sources familiar with its operations.

As MRC reported earlier, the mew MEG plant's start-up was pushe back to early 2021 from H1 2020 on coronavirus pandemic-related concerns to ensure worker safety and social distancing.

MEG is one of the main feedstocks for the production of polyethylene terephthalate (PET).

According to MRC's ScanPlast report, Russia's estimated PET consumption increased in February 2021 to about 57,760 tonnes, up by 7% year on year. Overall PET consumption in Russia totalled 115,210 tonnes in the two months of 2021.

Nan Ya's 800,000 mt/year monoethylene glycol (MEG) plant in Texas is expected to come online by late 2020 or early 2021 rather than the third quarter of 2020, reported S&P Global with reference to a source familiar with company operations.
MRC

Azerbaijan increases profit from PP exports by more than a quarter in Q1 2021

MOSCOW (MRC) -- Azerbaijan exported 23,988 tonnes of polypropylene (PP) in primary forms in January-March 2021, said the Azeri news agency REPORT with reference to the data of customs declarations.

According to the State Customs Committee, the cost of PP exports totally USD26.791 million, up by USD5.672 million (26.8%) and down by 935 tons (3.8%) year on year.

In the last quarter of 2020, the share of PP in the total exports of the non-oil sector was 5.34%, and in the total export volume - 0.65%.

As reported previously, PP is produced in Azerbaijan at SOCAR Polymer's plant, which was commissioned on July 18, 2018. The design capacity of the plant is 184,000 mt/year of PP. A plant for the production of high density polyethylene (HDPE) with a capacity of 120,000 mt/year started up on February 18, 2019.

In general, the plants of SOCAR Polymer, a subsidiariy of the state oil company of Azerbaijan - SOCAR, are designed to produce 10 grades of PP and 4 grades of HDPE. SOCAR Polymer's revenues from these plants for the period of operation are expected at USD6.6 billion, net profit will amount to USD1.98 billion. For the entire period of operation of the plants, tax payments to the state budget of Azerbaijan will amount to USD600 million.

It was also reported that most of the PE and PP quantities produced at SOCAR Polymer are exported. Thus, Azerbaijan exports these products mainly to Turkey, Russia, Ukraine, Belarus, Poland and Lithuania.

Azerbaijan also produces low density polyethylene (LDPE) at the Ethylene-Polyethylene plant of the Azerkhimia production association of SOCAR in the amount of over 60,000 mt/year.

SOCAR Polymer was founded by the State Oil Company of Azerbaijan. Currently, SOCAR's share in the company's capital is 57%. LLC "Vitol Black Sea V. L. L", LLC "Ecoland" and a number of other companies are also among the shareholders.
MRC