Taiwan's Formosa Petrochemical has cut supplies of butadiene (BD) to domestic synthetic rubber producers following an unexpected shutdown at its largest 180,000 t/yr No.3 extraction unit at its Mailiao complex.
The plant was shut yesterday morning following a mechanical issue and repairs are expected to take up to 30 days. The production disruption is limited to the BD unit with operations at the company's 1.2mn t/yr ethylene cracker continuing normally.
The unexpected shutdown of the No.3 BD unit is in addition to continuing maintenance ending in early October of the company's 1.03mn t/yr No.2 cracker, which includes a 160,000 t/yr BD extraction unit. This leaves the company with a sole operating 110,000 t/yr BD extraction unit at Mailiao.
Formosa has yet to decide if it will sell crude C4 or return the stream to be co-cracked in the No.3 Mailiao cracker as a result of the shutdown of the downstream BD unit.
The shutdown is expected to tighten BD supplies even further. Cargoes for second-half September cfr northeast Asia deliveries traded prior to the disruption at sharp premiums to October cargoes at $1,300-1,350/t. October cfr northeast Asia shipments were discussed around $1,230/t cfr around the same time.
Synthetic rubber production rates in Taiwan were already cut in August and for September because of squeezed production margins. BD buyers said operating plans have yet to be decided for October.
