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Taiwan's Formosa Petrochemical Corp has sold two fuel oil cargoes totalling 50,000 tonnes for delivery in January, Reuters reports.

The local oil and petrochemicals firm, operator of the 400,000 barrels-per-day Mailiao Refinery, is said to have transacted one 40,000-tonne parcel of high sulphur fuel oil at a discount of approximately $15.00 per tonne to Singapore spot quotes on free-on-board basis (FOB) to oil major Chevron.

Another 10,000-tonne lot of pyrolysis fuel oil (PFO), a low-viscosity cutter, was sold at a premium of around $80.00 per tonne to Singapore spot quotes FOB, also to Chevron, industry sources said.

Both cargoes are reported to be scheduled for loading from the Mailiao plant on January 25-27.

The high premium paid for pyrolysis fuel oil would appear to be a clear indication of the increasing lack of cutter stock in the market at present.

In contrast, around 3.7 million tonnes of Western inflows of fuel oil are reported to have been purchased so far for February - the highest in five months. This is expected to create an imbalance between the availability of high-viscosity materials and low-viscosity cutters needed to blend high-viscosity, high-density cargoes before they can be sold into the marine fuels market.

As a result, the viscosity spread - the premium of 180-centistoke (cst) fuel oil to 380-cst grade - has widened quite significantly over the past week with the front-month February contract trading at $10.50 per tonne in early Monday trade.

Formosa Petrochemical is the only privately owned oil refinery in Taiwan and the country's second largest gasoil and gasoline producer. It is also Taiwan's largest olefins producer.

The company's principal refined petroleum products are fuel oil (including pyrolysis fuel oil), gasoline, gasoil, naphtha, jet fuel / kerosene and liquefied petroleum gas.