Malaysia's Titan Chemicals has bought all the spot naphtha it needs for December with its purchase of 50,000 mt of full range naphtha for delivery into Pasir Gudang, a trade source close to the company said Tuesday.
The cargoes were bought via private negotiations. Details on the seller could not be confirmed but the parcels were bought at a premium of around $5/mt to Mean of Platts Japan naphtha assessments, on a CFR basis.
The petrochemical producer is running its two steam crackers at Pasir Gudang at 90-95% of capacity, but said that run rates remained uncertain for December.
"It really depends on Formosa and how long its No. 2 cracker will remain shut," the source said, adding that a prolonged closure might have an effect on the production and consequently, supply levels, of downstream petrochemical products, which could present an opportunity for other regional petrochemical producers to step in and fill the gap.
Taiwan's Formosa Petrochemical was to have restarted its No. 2 Mailiao-based naphtha-fed steam cracker in mid-November after a 40-day maintenance that began on October 5. But the Taiwanese end-user has had to delay the restart for untold reasons. A company spokesman said late Monday the company was undecided on the restart date, saying it could be "late this week or end-November".
The No. 2 steam cracker, one of three at Mailiao that Formosa operates, can produce 1.03 million mt/year of ethylene and 515,000 mt/year of propylene.
The delay in the restart has already resulted in a build-up of naphtha inventory levels for the company, which has decided it will push forward 120,000 mt of term, as well as spot, naphtha from December to January, a source close to the company said Monday.
Asian naphtha cracks closed lower Monday following the news from Formosa, which indicates softer spot demand for at least three months from one of Asia's biggest naphtha buyers. The second-half January crack eased back $5.15/mt to close at $151.15/mt on Monday. On Tuesday at 0300 GMT, the crack was notionally valued at a softer $145/mt.
The cargoes were bought via private negotiations. Details on the seller could not be confirmed but the parcels were bought at a premium of around $5/mt to Mean of Platts Japan naphtha assessments, on a CFR basis.
The petrochemical producer is running its two steam crackers at Pasir Gudang at 90-95% of capacity, but said that run rates remained uncertain for December.
"It really depends on Formosa and how long its No. 2 cracker will remain shut," the source said, adding that a prolonged closure might have an effect on the production and consequently, supply levels, of downstream petrochemical products, which could present an opportunity for other regional petrochemical producers to step in and fill the gap.
Taiwan's Formosa Petrochemical was to have restarted its No. 2 Mailiao-based naphtha-fed steam cracker in mid-November after a 40-day maintenance that began on October 5. But the Taiwanese end-user has had to delay the restart for untold reasons. A company spokesman said late Monday the company was undecided on the restart date, saying it could be "late this week or end-November".
The No. 2 steam cracker, one of three at Mailiao that Formosa operates, can produce 1.03 million mt/year of ethylene and 515,000 mt/year of propylene.
The delay in the restart has already resulted in a build-up of naphtha inventory levels for the company, which has decided it will push forward 120,000 mt of term, as well as spot, naphtha from December to January, a source close to the company said Monday.
Asian naphtha cracks closed lower Monday following the news from Formosa, which indicates softer spot demand for at least three months from one of Asia's biggest naphtha buyers. The second-half January crack eased back $5.15/mt to close at $151.15/mt on Monday. On Tuesday at 0300 GMT, the crack was notionally valued at a softer $145/mt.
