UPDATE 1-Taiwan Formosa expected to restart naphtha units
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SINGAPORE, June 22 (Reuters) - Asia's top naphtha buyer, Taiwan's Formosa Petrochemical Corp, is expected to restart two of its three naphtha crackers in about 10 to 14 days following an outage that forced the shutdown of the units this week, traders said on Friday.
Formosa had asked to defer some of its naphtha feedstock shipments but it was not clear if sellers had agreed, they added. The volumes to be deferred were also unclear.
Traders estimated that the shutdown of the No 2 and No 3 crackers for about two weeks would result in a demand loss of around 200,000 tonnes of naphtha.
In the first half of May, Formosa had already asked for at least 150,000 tonnes of naphtha shipments to be deferred after it cut its operating rates at its cracking complex because of weak petrochemical margins.
Its No 3 cracker resumed operations in mid-June after shutting unexpectedly around May 30.
"Formosa has stopped buying spot because of the series of events that affected its production," said a trader. "Now, if they defer more cargoes, the naphtha market will crash further, for sure."
Asia's naphtha margins, which stood at a premium of $20.10 a tonne on Thursday, have lost almost 89 percent of their value from this year's high of $182.63 a tonne on Feb. 29, felled by higher supplies and lower demand.
Formosa operates a 2.93-million tonnes per year (tpy) cracking complex in Mailiao. Its 700,000 tpy No 1 cracker was shut on June 19 for a planned maintenance before the outage happened.
The other two crackers, namely the 1.03-million tpy No 2 unit and the 1.2 million-tpy No 3 cracker, were shut the following day because of the outage.
It also operates a 540,000 barrel per day (bpd) refinery at Mailiao. Operations at the refinery were not affected by the outage, traders said. (Reporting by Seng Li Peng; Editing by Clarence Fernandez)
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