FPCC invokes force majeure on shipments amid Hormuz disruptions

Core Viewpoint - Formosa Petrochemical Corporation (FPCC) has declared force majeure on certain petrochemical shipments due to supply disruptions in the Strait of Hormuz, impacting its operations and output levels [1][5]. Group 1: Operational Impact - FPCC's No.2 and No.3 crackers are currently operating at approximately 70% capacity, with the possibility of shutting down one cracker if naphtha feedstock supplies are completely halted [1]. - The company is processing around 490,000 barrels per day (bpd) of crude, but some crude deliveries will be affected after March 20 due to ongoing shipping challenges [2]. - The No.1 cracker at the Mailiao complex remains offline indefinitely, marking the first time FPCC has kept a cracker offline for over a year, which reduces ethylene output by nearly 25% [3][4]. Group 2: Maintenance and Production Capacity - FPCC plans to shut its No.2 crude unit for scheduled maintenance in the coming days, with a total crude processing capacity of 540,000 bpd [3]. - The indefinite shutdown of the No.1 cracker has led to a decreased demand for imported feedstocks such as naphtha and liquefied petroleum gas [4]. Group 3: Market Context - The decision to invoke force majeure aligns with a broader trend among petrochemical producers globally, who are scaling back output or closing facilities due to oversupply and slim profit margins [5].