Taiwan's Formosa may not export spot diesel until Q4
SINGAPORE (Reuters) — Taiwan's Formosa Petrochemical Corp may not export any diesel in the spot market until the fourth quarter of this year, potentially boosting margins for the fuel, industry sources said on Thursday.
The refiner has not exported any diesel in the spot market since January, while overall diesel exports from Taiwan have fallen by about 10%, according to the sources and trade data.
Formosa has had more refining unit shutdowns this year than last year, including planned maintenance at several units from mid-March to late April.
It also had an unexpected technical issue at a crude distillation unit in May, which forced the refiner to lower its operating rates and eventually shut the unit for maintenance in July.
Overall diesel exports from Taiwan, Asia's fifth largest diesel exporter, fell to about 19.7 MMbbl in the four months to end-April, down 10.1% from the same period last year, latest available government data shows.
This came despite a 4.8% decline in domestic demand for the fuel used in the marine, transportation and power generation sectors for the period.
Taiwan's monthly diesel exports in April were the lowest since at least January 2016, which is as far back as government data goes.
Taiwan’s only other exporter, CPC Corp, has kept its diesel export volumes steady, an industry source familiar with the matter said.
Formosa last sold two diesel cargoes totaling 600,000 bbl for loading in mid-January, a second industry source said.
"(Formosa) just committed to term liftings and sometimes had to allocate between months," the source said, referring to term volumes allocated to regular buyers every year.
Spot cargoes for overseas sales were only likely to resume after Formosa completed maintenance at its 80,000-bpd residue desulfurizer unit in October, he added. The unit removes sulfur from crude oil to make oil products like low sulfur diesel.
Formosa may have also allocated more term cargoes to one of its regular buyers due to demand, a third industry source said.
A Formosa spokesman could not be reached for comment.
Reporting by Jessica Jaganathan; Editing by Richard Pullin
Comments