Taiwan Petrochemicals 2019
The immediate concern is the effect of the US-China trade war on petrochemicals exports to mainland China, with Taiwan set to benefit from a cut in US petrochemicals exports to China. However, as an important supplier of intermediate products, Taiwan couldpotentially face the impact of US tariffs on Chinese manufactured goods. Taiwan's reliance on naphtha streams, derived fromrefining imported crude, has helped support margins to some extent as the cost of crude has declined, although refinery capacityremains relatively old and has been reduced in recent years. Falling naphtha costs after the oil price crash have offset the effects offalling export orders and declining competitiveness, but the uptick in crude prices from 2018 will continue into 2019 and putpressure on Taiwanese petrochemical margins.
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