June 7, 2012 / 8:06 AM / 5 years ago

Taiwan's Formosa Plastics says tough to assess Q3 demand amid global woes

TAIPEI, June 7 (Reuters) - Formosa Plastics, one of the world’s largest makers of raw materials used in making plastics, said on Thursday it is having a tough time gauging customer demand for the third quarter because of volatile crude prices and global economy uncertainty.

Formosa Plastics has cut its production and slashed inventories given the adverse conditions, Chairman C. T. Lee told Reuters in a telephone interview.

“Our customers have a hundred reasons for not asking for delivery right now,” Lee said.

The company is pessimistic about the outlook as weak U.S. and Chinese economic data and Europe’s debt crisis dragged Brent crude oil to as low as $95 a barrel this week, the lowest since January 2011. It was around $125 early this year.

Formosa Plastics, Formosa Petrochemical and two other major listed units of the group recently posted May sales totalling T$119.7 billion ($4.01 billion), down 16 percent from a month earlier. (Reporting by Lin Miao-jung; Writing by Faith Hung; Editing by Kim Coghill)

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