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South Korean bunker supply tightens on run cuts, strong demand
Bunker supply in South Korea has tightened in the second half of November amid refinery run cuts and strong demand, industry sources said Tuesday.
Only S-Oil had supply left for spot customers Tuesday as the country's three other refiners, GS Caltex, Hyundai Oilbank and SK Energy, are facing supply tightness, the sources added.
"We don't have any barrels to sell," said a refining source in Seoul.
Even S-Oil could only offer spot fuel only December 5 as it has fully booked prompt deliveries, a company source said.
"South Korean refiners are cutting their run rates by around 10%; normally their run rates are 95-100%," said a refining source, attributing the fall to narrower margins.
South Korea bunker supply in November will decline to around 600,000 mt from the typical 700,000 mt/month level as a result, a trade source said.
On the other hand, demand has been strong in November, industry sources said, with one refining source describing it as "really good."
Shipping companies are trying to buy before the Christmas holiday, a source at a South Korean refinery said.
As a result of the tight supply, South Korea's 380 CST bunker premium to the Mean of Platts Singapore 380 CST high sulfur fuel oil assessment rose to $60.88/mt Monday, the highest since November 12 last year, Platts data showed.
South Korean 380 CST grade was assessed at $662/mt Monday, and MOPS was at $601.12/mt.
Source: Platts
Only S-Oil had supply left for spot customers Tuesday as the country's three other refiners, GS Caltex, Hyundai Oilbank and SK Energy, are facing supply tightness, the sources added.
"We don't have any barrels to sell," said a refining source in Seoul.
Even S-Oil could only offer spot fuel only December 5 as it has fully booked prompt deliveries, a company source said.
"South Korean refiners are cutting their run rates by around 10%; normally their run rates are 95-100%," said a refining source, attributing the fall to narrower margins.
South Korea bunker supply in November will decline to around 600,000 mt from the typical 700,000 mt/month level as a result, a trade source said.
On the other hand, demand has been strong in November, industry sources said, with one refining source describing it as "really good."
Shipping companies are trying to buy before the Christmas holiday, a source at a South Korean refinery said.
As a result of the tight supply, South Korea's 380 CST bunker premium to the Mean of Platts Singapore 380 CST high sulfur fuel oil assessment rose to $60.88/mt Monday, the highest since November 12 last year, Platts data showed.
South Korean 380 CST grade was assessed at $662/mt Monday, and MOPS was at $601.12/mt.
Source: Platts
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