Taiwan’s CPC reopens Kaohsiung cracking plant to stabilize supply

CPC Corp. reopened its light oil cracking plant in Kaohsiung’s Linyuan District to try to boost supplies of petrochemical feedstocks for downstream plastic, rubber, and synthetic fiber manufacturers.

Most plastics are made from petrochemical feedstocks. Light oil is processed through steam cracking to produce basic materials, which are then turned into plastic pellets. Manufacturers use these pellets to produce a wide range of plastic products.

The plant, which has been in operation for more than 40 years, was shut down in February for annual maintenance. The company said the restart will lift monthly ethylene supply to 79,000 tonnes from 60,000 tonnes, significantly boosting raw material availability for production, per Economic Daily News.

CPC plans to further increase the plant’s ethylene capacity to 90,000 tonnes in May. The company said it will strengthen cooperation with its 18 downstream plastic pellet manufacturers, including USI and Asia Polymer, to prioritize supplying feedstocks to domestic plastics producers.

CPC said it has cut crude imports from the Middle East to reduce risks and will increase shipments from the US, Australia, and West Africa. The company added that it will continue monitoring market trends to meet petrochemical feedstock demand.

Formosa Plastics Group said it will also prioritize domestic supply and reduce exports. Amid a surge in global oil prices caused by the closure of the Strait of Hormuz, the group added that its subsidiaries will raise prices on most products.

During a Thursday tour of the plant, Premier Cho Jung-tai (卓榮泰) said the surge in international oil prices has disrupted petrochemical feedstock supplies, affecting domestic plastics and medical equipment production. He praised CPC’s efforts to stabilize domestic supply and pledged the government would intensify inspections to prevent hoarding or price gouging.

The company added that it will not raise household bottled gas prices in April and will cover higher import costs caused by the Iran war. Formosa Petrochemical will also keep its gas cylinder prices unchanged in April.

The government said it will cut the commodity tax on liquefied petroleum gas by 50% starting Thursday to further ease price pressure.