Formosa mulls restart of No.3 naphtha unit in January, YNCC shutters cracker

Formosa's 1.2 mln tpa, No. 3 naphtha unit that has been shuttered since September, may restart. Formosa Petrochemical Corp has deferred restart several times since the shutdown because of persistently failing naphtha demand. Spot discounts on next month loading cargoes from India have fallen to levels lower than the discount levels in November - hence, in recent weeks, a recovery has been sensed in naphtha prices in Asia. However, many market players opine that the price improvement could be related to a supply reduction than to an improvement in demand, due to refinery run cuts in Japan and South Korea. Yeochon Naphtha Cracking Centre (YNCC) has shuttered the smallest of its three crackers due to inventory pressures caused by deteriorating demand. The planned shutdown at the 400,000 tpa unit could be indefinite. The other two crackers with capacity of 850,000 tpa and 550,000 tpa will continue to operate at 20% reduced run rates, in a bid to maintain polyolefin and derivate prices.
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