Formosa Petrochem buys 2H Aug naphtha on lower run

SEOUL, July 17 (Reuters) - Taiwan's Formosa Petrochemical Corp (6505.TW) has bought 50,000 tonnes of open-spec naphtha for second-half August delivery to Mailiao at a discount of $5.00-$5.50 a tonne to Japan spot quotes, two trading sources close to the deal said on Thursday.

The Taiwanese refiner has lowered operating rates at its 180,000 barrels per day (bpd) crude unit, in line with a 10-day shutdown at its gasoline-making residual fluid catalytic cracker (RFCC) from July 14. [nSEO178216]

"The market was instantly supported by the demand from Taiwan, but the overall sentiment is still pressured by 400,000 to 500,000 tonnes of arbitrage naphtha expected to arrive in Asia," said a trader.

Despite the shutdown, Formosa had said exports for July loading will not be affected as stocks are sufficient, but losses of gasoline output are unavoidable.

Around 55 percent of the RFCC's production is gasoline, and the rest is propylene feedstocks. (Reporting by Angela Moon; Editing by Keiron Henderson)