Formosa Petrochemical Corp (台塑石化) yesterday posted the largest annual growth in monthly revenue among Formosa Plastics Group’s (台塑集團) four major units, thanks to higher crude oil prices.
Sales last month jumped 40 percent year-on-year to NT$59.18 billion from NT$42.27 billion (US$1.99 billion from US$1.42 billion), mainly due to rising product prices supported by an uptrend in global crude oil prices, Formosa Petrochemical said.
The average selling price of the company’s oil products increased by US$15.4 per barrel from April last year, the company said in a statement.
The nation’s only listed refinery sold 16.39 million barrels of oil products over the period, up from 4.61 million barrels last year, company filings showed.
Asked about oil price trends, Formosa Petrochemical president Tsao Minh (曹明) said any new US sanctions against Iran should be closely watched.
US President Donald Trump has threatened to abandon the 2015 Iran nuclear deal, under which OPEC’s third-largest member agreed to curb nuclear activities and was allowed to export more crude oil. The US must decide by Saturday whether to withdraw from the agreement.
The loss of crude oil exports from Iran is expected to reduce output by about 500,000 barrels per day if the US pulls out of the deal, Tsao told a news conference in Taipei yesterday.
Other nations could easily make up the shortfall, but a curb on Iranian oil might have an effect on expectations, Tsao said.
Oil prices are less likely to rise above US$80 per barrel in the near term, despite worldwide concerns about sanctions on Iran, as global oil supplies remain relatively stable, Tsao added.
In light of higher crude prices, the group’s three other core units also reported sales growth for last month on an annual basis.
Formosa Plastics Corp (台塑), the nation’s largest producer of polyvinyl chloride, said its sales rose 18.2 percent year-on-year to NT$19.56 billion, up from NT$16.55 billion during the same period last year.
The company expects a continued increase this quarter in prices of its benchmark products, such as polyethylene and acrylonitrile, on rising oil prices, Formosa Plastics chairman Jason Lin (林健男) told reporters.
Nan Ya Plastics Corp (南亞塑膠), the nation’s largest plastics manufacturer, posted monthly revenue of NT$27.9 billion, a 15 percent annual increase from NT$24.26 billion during the same period last year.
Formosa Chemicals and Fibre Corp (台灣化學纖維), which produces aromatics and styrenics, reported that revenue rose 19.9 percent year-on-year to NT$33.12 billion from NT$27.62 billion.
Overall, the four units posted revenue of NT$139.76 billion, a 26.2 percent annual increase from NT$110.7 billion.
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