January 12, 2018 / 4:17 AM / 2 months ago

Taiwan's Formosa buys 100,000 T naphtha at lower premium

SINGAPORE, Jan 12 (Reuters) - Taiwan’s Formosa Petrochemical Corp has bought lower naphtha volumes for February than January due to fewer days next month and also because it is returning to using alternative feedstock, traders familiar with the matter said on Friday.

Formosa has bought around 100,000 tonnes of open-specification naphtha for second-half February delivery.

This has brought its total purchase for February to around 350,000 tonnes, down from up to 450,000 tonnes it had bought for January arrival.

Asia’s top naphtha importer has in this week secured 22,000 tonnes of propane to replace naphtha next month for the first time in more than three months as it stopped doing a partial switch due to high prices of liquefied petroleum gas (LPG).

High naphtha supplies were also working in favour of Formosa, enabling it to buy the fresh naphtha cargoes at a premium of about $6 a tonne to its own price formula on a cost-and-freight (C&F) basis.

Not only was this down by at least 37 percent compared to the premiums paid on Dec. 22 but it was also the lowest Asia’s top naphtha importer had paid since Oct. 31. (Reporting by Seng Li Peng; Editing by Gopakumar Warrier)

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