Feedstocks for Formosa Taiwan's Cracker Switched from Naphtha to 10-15% LPG

According to market source, due to healthy margins for ethylene production as well as cheaper LPG costs, since beginning of January 2016, instead of using 100% naphtha, Taiwan’s Formosa Petrochemical Company has been using about 10-15% of LPG as feedstock. The current ethylene-naphtha price spread is much above the typical breakeven spread of $300-350/t level.

In general, LPG yields more ethylene than naphtha (0.40 using LPG and 0.23 using naphtha). When LPG price is at the level of about 95% of the value of naphtha or $50/t lower than naphtha, crackers in Asia tend to switch their feedstocks, while butane will be generally preferred as an alternative feedstock to naphtha.

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