TAIPEI (Taiwan News) — Formosa Chemicals and Fiber has joined other Taiwanese petrochemical companies in declaring force majeure, noting that supplies of certain products could be reduced starting in April due to upstream raw material shortages.
The announcement follows ongoing conflict in the Middle East and continued shipping disruptions through the Strait of Hormuz, which have affected the global petrochemical supply chain, according to CNA.
The company said force majeure will apply to products including styrene monomer, widely used in plastics and rubber production, phenol, and purified terephthalic acid. Domestic and contractual customers will be given priority.
Formosa Chemicals noted that key raw material supplies have become uncertain, particularly naphtha and light oil from Formosa Petrochemical, which have been significantly reduced. Inconsistent purchases of light oil from other sources are also affecting aromatics production, according to CTEE.
Analysts said the supply constraints originate upstream. Operating rates at Formosa Petrochemical’s facilities have dropped to around 50% and could fall to 40% if light oil transport remains disrupted.
Other petrochemical producers in Asia have also declared force majeure and temporarily suspended new orders. Force majeure refers to events beyond a company’s control, such as wars, natural disasters, or strikes, that prevent fulfillment of contractual obligations and legally exempt companies from breach-of-contract liability.
Following the outbreak of tensions in the Middle East, Formosa Petrochemical and Formosa Plastics declared force majeure earlier this month. Formosa Chemicals initially delayed its decision due to uncertainty over raw material availability and oil prices, but ultimately issued the declaration after the situation persisted.
Founded in 1987, Formosa Chemicals has gradually expanded its product range from textiles to chemicals and plastics. It is now one of the world’s largest producers of styrene monomer and synthetic phenol, according to MoneyDJ.
