Taiwan Oil Refineries Benefit From Quake Fallout in Japan

Taipei, March 16, 2011 (CENS)--Taiwan's two leading oil refiners—the state-run CPC Corp. Taiwan and Formosa Plastics Group (FPG)—will benefit from diverting orders in the aftermath of the 8.9 quake and tsunami to ravage Sendai and large swaths in northeastern Japan, a disaster that has shut down at least six naphtha-cracking plants.

The apocalyptic quake and tsunami has crippled many oil-refineries, naphtha-cracking plants and downstream petrochemical firms in Chiba Prefecture near the quake epicenter.

Overall the earthquake has impacted output of 2.7 million tons of ethylene, or 33% of Japan's output of 7.73 million tons.

An industry insider says the shutdown of the six naphtha-cracking plants has virtually derailed downstream production of petrochemicals as PE, SM, EG, VCM and PVC, which will definitely impact the Asian petrochemical market, a trend closely watched by Taiwan's suppliers.

The continuing surge in crude oil prices are pushing up prices of PE, PP, PVC and PS by between US$5 and US$30 per metric ton in Asia; while the quake in Japan is triggering strong demand for petrochemicals that is expected to benefit leading makers in Taiwan, including CPC, Formosa Plastics Corp., Formosa Petrochemical Corp. and USI Far East Corp.