Taiwan CPC relies on naphtha for cracking

The higher price of LPG vs naphtha has prompted Taiwan's CPC Corp. to sell the refrigerated LPG that it imports on term contract from Saudi Aramco in the domestic retail market, as per Platts. Petrochemical makers typically switch from naphtha to LPG as cracker feedstock when LPG prices fall to around 90% or lower compared to the price of naphtha, or when LPG becomes at least US$50/MT cheaper than naphtha. Other petrochemical producers who have already tied in their LPG purchase through term contracts on a MOPJ naphtha pricing basis have also been selling LPG in the spot market to capitalize on the spread between LPG and naphtha prices. Formosa Petrochemical has sold 22,000 tons of evenly split LPG loading in H2-June to an unconfirmed buyer at a price equivalent to Platts MOPJ naphtha assessments for June plus a premium of US$30/ton. In mid March, the Taiwanese major entered into a term contract with BP and South Korean trader E1 to buy 44,000 tons/month of evenly split refrigerated LPG in two cargoes of 22,000 tons each from both the companies. The current retail price of LPG used for domestic use in Taiwan is US$16.60 for the most commonly used 20-kg cylinder. Prices were rolled back by NT$26.71 Wednesday, following Saudi Aramco's announcement of June Contract Price on May 31.
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