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China: FPCC cancels base oil exports to Mainland China in Jul-Aug on unit blast

https://www.chemnet.com   Jul 30,2010
Formosa Petrochemical Corporation (FPCC) canceled its base oil exports to Mainland China during end July to early August after a fire hit its refinery in Mailiao of Taiwan, a source with the refinery told C1.


A hydrodesulfurizer of the refinery caught fire Sunday night, which forced the refinery to shut down all its refining units, including its base oil production facilities, the source said.


The refinery was originally planned for close-down maintenance on Aug 1. They had to advance the schedule due to the accident, according to the source.
As the base oil facilities were closed down one week earlier, its base oil reserves would be 10,000mt lower than scheduled, the source said. "In August-September, we could only supply to factories that have inked long-term contracts with us. We have few leftovers for agents," revealed the source.
The refinery would resume commercial base oil supplies in mid-late-September at the earliest after a 45-day maintenance, the refinery source added.
Taiwan Yuanzhen, a primary base oil agent for FPCC, was to cancel the import of one 3,000-mt cargo for end July delivery, a source with the company said. The two sides have also suspended negotiation on a few other cargoes, which were scheduled to destine to East China, according to him.


The market expected that the supply blackout from FPCC would bolster up Asia Group II base oil market. "We may hold our offers steady to slightly higher in August as supply of Group II resources would tighten up on a whole," a source with a South Korean refinery told C1.


The FPPC's base oil plant in Mailiao has an annual production capacity of 520,000mt, mainly for Group II base oils production. It normally produces 150N and 500N products.

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