Taiwan's Formosa Petrochemical Corporation (FPCC) had not got approval from the local government to restart its refining units, revealed a company source.
Holding low level of base oil inventories since the shutdown on Jul 26, the refiner had to suspend exports, reserving all resources for local consumption, he said. Meanwhile, supplies to long-term contracted buyers, like Shell and Total, had been halted now, he revealed.
With the resumption date remained uncertain, the refiner also cut supplies to local buyers by 60-70% to ensure the inventories could last till the end of November, he added.
Without resources from FPCC, Group II supplies would still be tight in Asia in November, when inventories of other Asian refineries had stepped to low level due to active sales lately, reckoned an industry source. On the other hand, demand from traders and some large lubricant plants in China were healthy due to thin stocks, he furthered. Underpinned by this supply-demand fundamental, prices of Group II from foreign refineries would further hike in November, he opined.
FPCC, with a base oil production capacity of 500,000-600,000mt/yr, mainly produces Group II base oils. It shut down for maintenance on Jul 26 after a fire accident.
Holding low level of base oil inventories since the shutdown on Jul 26, the refiner had to suspend exports, reserving all resources for local consumption, he said. Meanwhile, supplies to long-term contracted buyers, like Shell and Total, had been halted now, he revealed.
With the resumption date remained uncertain, the refiner also cut supplies to local buyers by 60-70% to ensure the inventories could last till the end of November, he added.
Without resources from FPCC, Group II supplies would still be tight in Asia in November, when inventories of other Asian refineries had stepped to low level due to active sales lately, reckoned an industry source. On the other hand, demand from traders and some large lubricant plants in China were healthy due to thin stocks, he furthered. Underpinned by this supply-demand fundamental, prices of Group II from foreign refineries would further hike in November, he opined.
FPCC, with a base oil production capacity of 500,000-600,000mt/yr, mainly produces Group II base oils. It shut down for maintenance on Jul 26 after a fire accident.
