SINGAPORE, July 14 (Reuters) - Taiwan’s Formosa Petrochemical Corp this week bought about 60,000 tonnes of naphtha using a pricing formula uncommon in the region, two people familiar with the matter said on Friday.
Formosa, Asia’s top naphtha importer, paid a discount of about $5 a tonne to a formula based 50-50 on prices from S&P Global Platts and Oil Price Information Service (OPIS), a unit of consulting firm IHS Markit, the sources said.
The discount paid for the cargoes, to be delivered in the second-half August to the port of Mailiao, marked the lowest price paid by Formosa since December, as the market struggles with surplus supplies.
“The difference in naphtha prices between those assessed by Platts and OPIS is very marginal,” said one of the sources. They both declined to be identified as they were not authorised to speak with media.
They added that Formosa plans to use the new formula in other transactions, saying it was in talks with sellers for some time before the change.
The company operates three naphtha crackers that produce more than 2.9 million tonnes of ethylene a year.
Before this, Formosa, like other end users in eastern Asia, bought naphtha on a formula that was fully priced off Platts assessments.
On the other hand, refiners such as Abu Dhabi National Oil Corp (ADNOC), Indian Oil Corp (IOC) and Bharat Petroleum Corp Ltd (BPCL) use prices from Platts and Argus Media. (Reporting by Seng Li Peng; Editing by Joseph Radford)