Formosa Plastics Group’s (FPG, 台塑集團) four major subsidiaries yesterday said combined revenue last month increased 4 percent month-on-month thanks to higher shipments as some factories resumed production following regular maintenance.
However, weak prices and excessive inventory continued to take a toll on the companies. Overall revenue at the four subsidiaries tumbled 22 percent year-on-year from NT$151.53 billion to NT$117.25 billion (from US$4.99 billion to US$3.86 billion).
Global crude oil prices are likely to extend an uptrend until the end of this year, but the outlook for next year is gloomy, Chinese-language Unique Satellite TV quoted Formosa Petrochemical Co (FPCC, 台塑石化) president Tsao Minh (曹明) as saying.
Photo: CNA
“Overall market demand does not look good for the first quarter of next year. Crude oil prices are likely to fall [again],” Tsao said.
Goldman Sachs Group Inc has forecast that global crude oil prices would stand at US$60 a barrel next year due to low demand, he added.
FPCC plans to fully utilize its fabs after maintenance ended last month, Tsao said.
The company said revenue last month rose 4.3 percent to NT$51.6 billion.
The utilization rate at its ethylene factories last month soared to 90 percent, from 66 percent in September, boosting output by about 28 percent month-on-month after one of the factories completed two months of annual maintenance, the company said.
However, ample supply drove ethylene prices down by NT$127 per tonne from a month earlier, it said.
Revenue plummeted 24.4 percent annually as refinery revenue contracted 22 percent annually on lower global crude oil prices, the company said.
Formosa Chemicals & Fibre Corp (FCFC, 台灣化纖) also had a conservative view for this quarter.
“Price is the main issue. As prices continue to fall, fourth-quarter revenue would be slightly lower than the third quarter. This is different from what I saw two months ago,” Unique Satellite TV quoted FCFC vice chairman Hong Fu-yuan (洪福源) as saying.
FCFC, which manufactures integrated plastic and nylon products, said that revenue last month rose 1.8 percent month-on-month to NT$24.87 billion. That represented an annual decline of 31 percent, as prices have been sliding since October last year amid a US-China trade dispute and new supply from China.
Nan Ya Plastics Corp (南亞塑膠), which makes plastics, chemicals and electronics materials, said revenue grew 2.8 percent monthly to NT$24.2 billion.
Output of bisphenol A (BPA), a chemical used in some plastics and resins, rose as its Fab 3 in Yunlin County’s Mailiao Township (麥寮) resumed production following regular maintenance, leading to an increase in BPA revenue.
Revenue from its electronics materials, including glass yarn, copper-clad laminates and printed circuit boards, fell due to a slow season, the company said.
Last month’s revenue represented an annual contraction of 12 percent from NT$27.51 billion, Nan Ya said.
Formosa Plastics Corp (FPC, 台塑), which makes intermediate raw materials for plastics, such as polyvinyl chloride and vinyl chloride, said revenue grew 8.7 percent monthly to NT$16.58 billion.
FPC attributed the growth to only three plants entering regular maintenance last month, compared with 10 plants that were under maintenance in September.
However, prices for its major products declined at an annual rate of 15 to 40 percent, causing revenue to fall 15.8 percent on an annual basis from NT$19.69 billion.
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