Wed, Mar 07, 2018 - Page 12 News List

FPG upbeat about near-term demand

ROSY OUTLOOK:From ethylene glycol to copper foil, PTA and PVC, the Formosa Plastics Group’s three main units look set to benefit from continued price increases

By Kuo Chia-erh  /  Staff reporter

Formosa Plastics Group (台塑集團), the nation’s largest industrial conglomerate, yesterday gave a positive outlook for next quarter, as its main product prices are likely to remain relatively high due to healthy demand.

“The price of ethylene glycol is expected to hover at high levels [in the coming months], despite short-term fluctuations,” Nan Ya Plastics Corp (南亞塑膠) chairman Wu Chia-chau (吳嘉昭) said at a news conference in Taipei, citing low inventories in major markets.

Nan Ya’s second-quarter sales would expand at a faster pace than the first quarter, he said, adding that copper foil prices should continue to advance on the back of growing Chinese demand for new energy vehicles.

Echoing Wu’s remarks, Formosa Chemicals & Fibre Corp (台灣化學纖維) said that an uptrend in purified terephthalic acid (PTA) prices would continue to lend support to the company’s revenue growth.

“We are upbeat about customer demand [next quarter], as China’s PTA inventory remains at a relatively low level of 1 million tonnes,” Formosa Chemicals vice chairman Hong Fu-yuan (洪福源) said.

Formosa Plastics Corp (台塑), the nation’s largest producer of polyvinyl chloride (PVC), in a statement also predicted that its major product prices would increase next quarter, mainly due to lingering tight supply in global markets.

Asian PVC prices are expected to rise further in the second quarter, as several Japanese and South Korean suppliers reduce production for regular maintenance, the statement said.

The three companies, plus Formosa Petrochemical Corp (台塑石化), the nation’s only listed oil refiner, posted mixed financial results for last month, partly due to lower sales volume because of the Lunar New Year holiday.

Nan Ya reported revenue of NT$24 billion (US$819.48 million) for last month, up 4.8 percent from NT$22.9 billion the previous year, while Formosa Chemicals saw its sales edge up 1.1 percent to NT$29.99 billion from NT$29.68 billion.

Formosa Petrochemical posted the highest growth rate among the four core units, with revenue rising 10.3 percent to NT$58.62 billion.

Bucking the trend, Formosa Plastics reported an annual decrease in sales for last month, with revenue falling 5.7 percent to NT$14.11 billion from NT$14.97 billion a year earlier.

Group sales increased 5 percent to NT$126.72 billion last month from NT$120.68 billion a year earlier.

Cumulative revenue in the first two months of the year advanced 11.3 percent to NT$278.27 billion from NT$250.11 billion the previous year.

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