Formosa to operate refinery in Mailiao at near 70% due to maintenance

MOSCOW (MRC) -- Taiwan’s Formosa Petrochemical Corp aims to lower its October average run rate at the 540,000-barrel-per-day (bpd) Mailiao refinery to about 70% from more than 87% last month due to maintenance, reported Reuters with reference to the company's spokesman.

Formosa, Asia’s sixth-largest standalone refinery by capacity, has taken an 80,000-bpd residue desulphurizer down for a planned maintenance since Tuesday.

Throughput at the crude units has to be adjusted down accordingly from this week, said the spokesman, adding that this would also affect its gasoline production as less fuel oil feedstock would be available for making petrol.

He estimated that the amount of petrol that would be lost during the maintenance could be equivalent to two medium-range tankers.

Formosa’s lower production run is coming at a time when demand for oil products is strong.

An attack on Saudi Arabia’s oil facilities on Sept. 14 had disrupted the Kingdom’s production and prompted Aramco to source fuel, including naphtha, gasoline and diesel, from various outlets to plug the gap.

This pushed the overall Asian average monthly refining margin in September to a two-year high of more than USD7.50 a barrel.

As MRC informed before, on 19 March, 2018, Formosa Petrochemical Corp (FPCC) undertook an emergency shutdown at its No. 1 cracker in Mailiao owing to technical issues. The plant remained off-line for around one day. Located at Mailiao in Taiwan, the No. 1 cracker has an ethylene production capacity of 700,000 mt/year, propylene production capacity of 350,000 mt/year and butadiene production capacity of 109,000 mt/year.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,255,800 tonnes in the first seven months of 2019, up by 9% year on year. Shipments of all PE grades increased. Meanwhile, the estimated PP consumption in the Russian market was 796,120 tonnes in January-July 2019, up by 11% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company"s plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
MRC

MOSCOW (MRC) -- Prices of Iranian polystyrene (PS) increased for October shipments of material to Ukrainian buyers by an average of USD30/tonne, according to ICIS-MRC Price report.

Thus, Iranian Tabriz's general purpose polystyrene (GPPS) for injection moulding was offered at USD1,065-1,075/tonne last week, and its extrusion grade material - at USD1,100-1,110/tonne CIF Odessa, excluding VAT.

As reported earlier, Nizhnekamskneftekhim (NKNH, part of the TAIF group) also raised its October PS prices for the Ukrainian market. The increase in the Russian producer's PS prices was USD30/tonne for Ukrainian buyers.
MRC

MOSCOW (MRC) -- Nizhnekamskneftekhim (part of TAIF group) has increased its polystyrene (PS) prices for October shipments to Ukraine, according to the ICIS-MRC Price report.

The rise in PS prices was USD30/tonnes for Ukrainian buyers.

Thus, Nizhnekamskneftekhim has shipped general purpose polystyrene (GPPS) to the region at USD1,160/tonne FCA Nizhnekamsk, including VAT, and high impact polystyrene (HIPS) - at USD1,220/tonne FCA Nizhnekamsk, including VAT, this month.

Customers' October orders either remained the same, or were reduced slightly by the plant.

PJSC "Nizhnekamskneftekhim" (NKNK) - one of the largest Russian manufacturers of petrochemical products. The industrial complex of the company includes ten major production plants and ten departments (Railway Transport, Ethylene trunk, etc..). NKNKh produces more than 120 types of chemical products, including synthetic rubber, polyethylene, polypropylene, polystyrene, surfactants. Nizhnekamskneftekhim is a member of TAIF Group of Companies.
MRC

MOSCOW (MRC) -- The October contract price of propylene was settled in Europe up by EUR10/tonne from the previous month. Therefore, all European producers announced an increase in export polypropylene (PP) prices for October shipments to the CIS countries, according to ICIS-MRC Price report.

Negotiations over October prices of European PP began at the end of last week. All market participants said European producers raised their export prices of propylene polymers for this month's shipments, but in some cases, the price increase was EUR30/tonnes, which is higher than the rise in prices of European propylene.

Deals for Octber shipments of propylene homopolymers (homopolymer PP) were discussed in the range of EUR1,015-1,065/tonne FCA, up by EUR10/tonne from September. Deals for block copolymers of propylene (PP block copolymers) were negotiated in the range of EUR1,120-1,160/tonne FCA, up by EUR10-30/tonne from the previous month.

Some European producers still had restrictions for export shipments, but they were not critical for most buyers. Consumers partially met their needs in PP due to cheaper shipments from the Middle East.
MRC

MOSCOW (MRC) -- Zhejiang Petroleum Trading Co. is set to become the first company with a foreign investment to win a crude oil import license in China, signaling the country further opening up its oil industry, reported S&P Global.

The Ministry of Commerce, or MOFCOM, said in a statement late Tuesday that Zhejiang Petroleum Trading in eastern China's Zhejiang Free Trade Zone meets the requirements to apply a license for importing crude oil.
The final approval will come after a public review, which could last until October 17.

With the license, Zhejiang Petroleum Trading will become the first company with a foreign investment to be allowed to import crude oil into China directly for refineries having permission to process imported barrels, Chinese policy observers said.

Zhejiang Petroleum Trading is a joint venture set up in April last year between Zhejiang Petroleum Co. Ltd., with a 71% stake, and the Singapore-based commodities trading house Glencore Asian Holding Pte. Ltd., owning the remaining 29%.

The company would also be the second non-state-owned trading firm to win the license in the Zhejiang Free Trade Zone, following China granting it to Zhejiang Material Industrial Zhongda Petroleum Ltd. in March.

Separately, MOFCOM is set to award a crude oil import license to the new greenfield independent refinery Zhejiang Petrochemical & Chemical Co. Ltd. in the same region after a public review ending on October 14, the ministry said in a second statement late Tuesday.

The license will enable the 400,00 b/d refinery to import crude directly, rather than asking a license holder -- either a trading company or a refinery -- to import on its behalf.

Without the license, the refinery is more likely to import through its indirect subsidiary Zhejiang Petroleum Trading. ZPC is a stakeholder of Zhejiang Petroleum, Zhejiang Petroleum Trading's parent company.

Taking into account a pending approval for ZPC, the ministry has granted a total of 33 refineries the crude import license since August 2015, when China began allowing independent refineries to directly import crude.

ZPC has been approved with a crude quota of 20 million mt/year by the country's top economic planner, the National Development and Reform Commission.

The refinery is expected to start full operations in Q4.

As MRC wrote previously, China's greenfield Zhejiang Petrochemical will use a range of process technology from Honeywell UOP for the second phase of its integrated refining and petrochemical complex in Zhoushan, Zhejiang province. The second phase of the complex by itself will process 20 million tons per year of crude oil and produce another six million tons per year of aromatics when completed. With an overall project cost of Yuan 160 billion (USD25.8 billion), Zhejiang Petrochemical plans to ultimately build up 40 million mt/year of crude processing capacity on Yushan Island of Zhoushan city in eastern China's Zhejiang province.

Phase I, revolving around 20 million mt/year of primarily crude processing capacity, will be able to produce 4 million mt/year of paraxylene, along with 8.5 million mt/year of gasoline, gasoil and jet fuel. Zhejiang Petrochemical has plans to start trial operations in February on its crude distillation unit and vacuum distillation unit at the phase I project, a source close to the company said this week. Construction of the second phase will begin after the full start-up of phase I.

Paraxylene is a raw material for the synthesis of terephthalic acid (PTA) - an intermediate for the production of polyethylene terephthalate (PET).

According to MRC's ScanPlast report, Russia's overall estimated PET consumption reached 62,540 tonnes in August, up by 9% year on year. The estimated PET consumption increased to 493,240 tonnes in Russia in January - August 2019, up by 12% year on year.
MRC