11.08.2010 • NewsNaphthaFormosa Petrochemicals

Japan Tosoh to Halt Naphtha Unit on Glitch

Japan's Tosoh said on Tuesday it would halt its sole naphtha cracker at its Yokkaichi plant later in the day for checks after identifying minor trouble with the unit, but this failed to dampen the mood as sellers eyed more demand from Taiwan.

A company spokesman did not give a timetable for the restart pending an investigation, but traders estimate the cracker will be shut for 7-10 days, although the exact nature of the glitch was not immediately known. The cracker has a nameplate capacity of 527,000 tons per year (tpy), or 493,000 tpy if it has a planned maintenance as production is lost during shutdown time.

The 7-10 day estimated shutdown time would mean a demand loss of around 30,000 tons of naphtha. But this has limited impact on the market so far, due to demand from South Korea and expectations of more buying interest from Taiwan's Formosa - Asia's top spot naphtha buyer.

"Formosa will likely need more spot now that they have postponed the maintenance at its No. 2 cracker. They will need to feed the cracker for another month," said a trader.

Formosa was to shut its 1.03 million tpy No. 2 cracker on Aug. 20, but has postponed that to end-September as it wanted to avoid shutting two crackers at the same time. Its 700,000 tpy No. 1 cracker was shut in early July following a blast and is not expected to resume operations until end-September or early October.

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