Taiwan’s Formosa Petrochemical (FPCC) has announced the implementation of force majeure on select petrochemical shipments amid ongoing delays in feedstock supplies caused by disruptions in the Strait of Hormuz, reported Reuters.
The affected products include ethylene and propylene, according to FPCC spokesperson KY Lin.
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Lin was quoted by the publication as saying: “Our No.2 and No.3 crackers are still operating at around 70% for now.”
He also added that the company may consider shutting one cracker if naphtha feedstock supplies are completely halted.
FPCC continues to export refined fuels such as diesel, jet fuel and petrol for March and April contracts, but Lin noted there is expected to be no spot product availability for April.
The refinery is currently processing approximately 490,000 barrels per day (bpd) of crude. Lin also mentioned that some crude deliveries will be affected after 20 March as a result of ongoing shipping challenges.
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By GlobalDataThe company plans to shut its No.2 crude unit for scheduled maintenance in the coming days. FPCC operates with a total crude processing capacity of 540,000bpd.
At present, the No.1 cracker at the Mailiao complex, with an annual capacity of 700,000t, continues to be offline and will remain shut indefinitely. The facility has not been operational since last September.
This prolonged closure marks the first time FPCC has kept a cracker offline for more than a year, based on data from Reuters over the past three years. The indefinite shutdown reduces the company’s ethylene output by nearly 25% and is expected to decrease its demand for imported feedstocks such as naphtha and liquefied petroleum gas.
FPCC has imported around 37.5 million barrels of naphtha annually during the last three years, according to Kpler ship-tracking data.
The refiner’s move comes as other petrochemical producers globally also scale back output or close facilities due to oversupply and slim profit margins.
