US-Iran Conflict Volatile, Formosa Plastics Expects Q2 Petrochemical Prices to Remain High
Despite reports of attempts to de-escalate tensions between the US and Iran, Formosa Plastics Group anticipates that petrochemical product prices will remain high in the second quarter, as Middle Eastern refining and petrochemical plants are unlikely to resume normal production quickly. Taiwan's four major petrochemical companies expect improved performance in Q2, with Nan Ya specifically noting increased demand for electronic materials driven by AI.
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- 📰 Published: May 7, 2026 at 18:02
- 🔍 Collected: May 7, 2026 at 18:31 (29 min after Published)
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(Central News Agency reporter Tseng Jen-kai, Taipei, May 7th) – The US-Iran conflict remains volatile; news emerged on the 6th that the United States and Iran are attempting to finalize a memorandum to end hostilities, boosting global stock markets. However, Formosa Plastics believes that even if a ceasefire is reached, Middle Eastern refining and petrochemical plants will be difficult to restore to normal production in the short term, and the market supply-demand imbalance will continue, estimating that petrochemical product prices will remain high in the second quarter.
Formosa Plastics' four major subsidiaries today released their Q2 operational outlook. Formosa Petrochemical analyzed that the US-Iran conflict is repetitive, and given the fundamental contradictions between the two sides, negotiation progress is expected to be slow, with oil prices remaining range-bound.
Formosa Plastics also pointed out that although progress in US-Iran negotiations was reported on the 6th, Brent crude oil prices, even after a decline, remain around US$100 per barrel, supporting energy and petrochemical raw material prices.
Formosa Plastics reviewed that nine naphtha crackers in Asia are scheduled for maintenance in Q2, with a combined annual capacity of 5.9 million tons, affecting ethylene supply by a reduction of 1.02 million tons. Coupled with the US-Iran war affecting the interruption of Middle Eastern crude oil and naphtha supply, it is estimated that petrochemical product prices are expected to remain high in Q2.
Formosa Plastics stated that due to low-cost raw materials and finished product inventory, product margins have increased, and it is estimated that the core business is expected to turn profitable in Q2. In addition, NT$230 million in cash dividends will be recorded, and investment income will increase, so Q2 revenue and profit are expected to be better than Q1.
Nan Ya also expects May revenue to increase from April, and Q2 revenue to increase from Q1. Nan Ya stated that AI is driving growth in demand for electronic materials, and coupled with limited supply and rising prices of petrochemical raw materials, prices of products including chemicals, polyester, and plastic processing have adjusted with raw material prices, jointly boosting revenue growth.
However, Nan Ya also warned that the prolonged war pushing up oil prices, shipping disruptions, soaring raw material prices, and various uncertainties such as tariffs, may gradually affect global economic development.
Formosa Chemicals & Fibre pointed out that the US-Iran war has been ongoing for more than two months since February 28th, and so far there is no consensus between the two sides, making it impossible to predict when the war will end. During this period, the price of naphtha, Formosa Chemicals & Fibre's main upstream raw material, rose from US$637 per ton to US$1121 per ton, an increase of up to 76%, putting considerable pressure on operations.
Formosa Chemicals & Fibre stated that due to reduced raw material supply from upstream Formosa Petrochemical, April revenue slightly decreased, but profits continued the good results achieved in Q1. In May, crude oil, naphtha, and other raw material prices still fluctuated significantly, and downstream customers reduced operating rates. Formosa Chemicals & Fibre also took the opportunity to schedule maintenance for its Aromatics No. 3 plant, Styrene Monomer (SM) No. 2 plant, and Mailiao Purified Terephthalic Acid (PTA) plant. Although this will affect the revenue reduction of its Taiwan plants, it can avoid the risk of stockpiling high-priced raw materials.
As for June, Formosa Chemicals & Fibre stated that with the completion of the regular inspection and restart of the Aromatics No. 3 plant, coupled with the increased naphtha supply from Formosa Petrochemical, the operating rate is expected to gradually recover. Overall, Formosa Chemicals & Fibre remains conservative, awaiting further developments in the Middle East conflict to secure the most favorable operating space. (Editor: Lin Chia-hsin) 1150507
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Formosa Plastics' four major subsidiaries today released their Q2 operational outlook. Formosa Petrochemical analyzed that the US-Iran conflict is repetitive, and given the fundamental contradictions between the two sides, negotiation progress is expected to be slow, with oil prices remaining range-bound.
Formosa Plastics also pointed out that although progress in US-Iran negotiations was reported on the 6th, Brent crude oil prices, even after a decline, remain around US$100 per barrel, supporting energy and petrochemical raw material prices.
Formosa Plastics reviewed that nine naphtha crackers in Asia are scheduled for maintenance in Q2, with a combined annual capacity of 5.9 million tons, affecting ethylene supply by a reduction of 1.02 million tons. Coupled with the US-Iran war affecting the interruption of Middle Eastern crude oil and naphtha supply, it is estimated that petrochemical product prices are expected to remain high in Q2.
Formosa Plastics stated that due to low-cost raw materials and finished product inventory, product margins have increased, and it is estimated that the core business is expected to turn profitable in Q2. In addition, NT$230 million in cash dividends will be recorded, and investment income will increase, so Q2 revenue and profit are expected to be better than Q1.
Nan Ya also expects May revenue to increase from April, and Q2 revenue to increase from Q1. Nan Ya stated that AI is driving growth in demand for electronic materials, and coupled with limited supply and rising prices of petrochemical raw materials, prices of products including chemicals, polyester, and plastic processing have adjusted with raw material prices, jointly boosting revenue growth.
However, Nan Ya also warned that the prolonged war pushing up oil prices, shipping disruptions, soaring raw material prices, and various uncertainties such as tariffs, may gradually affect global economic development.
Formosa Chemicals & Fibre pointed out that the US-Iran war has been ongoing for more than two months since February 28th, and so far there is no consensus between the two sides, making it impossible to predict when the war will end. During this period, the price of naphtha, Formosa Chemicals & Fibre's main upstream raw material, rose from US$637 per ton to US$1121 per ton, an increase of up to 76%, putting considerable pressure on operations.
Formosa Chemicals & Fibre stated that due to reduced raw material supply from upstream Formosa Petrochemical, April revenue slightly decreased, but profits continued the good results achieved in Q1. In May, crude oil, naphtha, and other raw material prices still fluctuated significantly, and downstream customers reduced operating rates. Formosa Chemicals & Fibre also took the opportunity to schedule maintenance for its Aromatics No. 3 plant, Styrene Monomer (SM) No. 2 plant, and Mailiao Purified Terephthalic Acid (PTA) plant. Although this will affect the revenue reduction of its Taiwan plants, it can avoid the risk of stockpiling high-priced raw materials.
As for June, Formosa Chemicals & Fibre stated that with the completion of the regular inspection and restart of the Aromatics No. 3 plant, coupled with the increased naphtha supply from Formosa Petrochemical, the operating rate is expected to gradually recover. Overall, Formosa Chemicals & Fibre remains conservative, awaiting further developments in the Middle East conflict to secure the most favorable operating space. (Editor: Lin Chia-hsin) 1150507
Choose to stand with facts. Your every sponsorship is a force to protect press freedom.
Download the CNA 'First-hand News' APP to stay updated with the latest news.
The text, images, and videos on this website may not be reproduced, publicly broadcast, or publicly transmitted and used without authorization.