A power outage at the giant Mailiao refinery and petrochemical complex of Asia’s top naphtha buyer, Formosa Petrochemical, shut two naphtha cracking units on Wednesday, the company’s chair said.
Chen Bao-lang said the cause of the outage at the complex in central Taiwan was not immediately clear and he would visit the plant to investigate, but added that the immediate impact was on production of olefin, made mainly from naphtha.
Asia’s naphtha margins tumbled 20 percent to a four-session low of $18.15 a tonne premium on the shutdown by the region’s top naphtha buyer of its entire 2.93 million tonnes per year (tpy) cracking complex.
“The weaker sentiment today is due mainly to Formosa and not so much about the concerns on Europe,” said a Singapore-based trader.
Formosa Petrochemical operates three naphtha crackers, but its 700,000 tpy No 1 unit was already shut on June 19 for a planned maintenance which will last about 40 days.
The outage affected the 1.03 million tpy No 2 and 1.2 million tpy No 3 crackers.
Formosa also operates a refinery in Mailiao. Last year Taiwan’s government ordered Formosa to carry out comprehensive checks at the 540,000 barrels per day (bpd) Mailiao site after a series of fires.