Cracks in Asia at 5 week highs, Formosa to restart 540,000 bpd refinery

16-Aug-11

Gasoline cracks in Asia rose to a five-week high on Thursday on the back of tight prompt supplies and firm demand from two of its largest importers-Indonesia and Vietnam, as per Reuters. But the firm sentiment may soften as Formosa readies to restart its 540,000 bpd refinery, shut since end-July following a fire at a secondary unit, which tightened supplies. The restart will be subject to Government approval. However, it is not immediately clear when the refinery will be able fully to restore its diesel and gasoline exports, estimated at 800,000 tons a month and 10,000-240,000 tons a month, respectively. If start up of the utilities and units in train one is smooth, restart of all three trains is expected by early September. Naphtha prices in Asia and cracks rose to a four-session high, with sentiment holding firm on steady demand, with the exception of Taiwan, where Formosa's No 1 cracker remains shut after a pipeline fire on May 12. The price for front-month H2-September open spec naphtha recovered by twenty dollars to US$917.50/ton.