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Two Japanese refiners to cut bunker fuel supply from April on regulatory change
Japanese refiners Idemitsu Kosan and Kyokuto Petroleum Industries will cut bunker fuel supply from April as they reduce refining capacity to comply with a government regulation, industry sources said Thursday.
Idemitsu Kosan currently sells a combined 60,000-70,000 mt/month of bunker fuel from its Tokuyama refinery in western Japan and Chiba refinery in Tokyo Bay, which will fall to below 60,000 mt/month after April, a company source said.
Traders said Idemitsu's supply was likely to fall to around 50,000 mt/month.
The refiner will cease operations at the 120,000 b/d Tokuyama refinery by end March due to the change in regulations.
Meanwhile, Kyokuto Petroleum Industries will cut its bunker fuel supply from 20,000-25,000 mt/month in the current fiscal year (April 2013-March 2014) to 15,000-20,000 mt/month in the next fiscal year as it cuts refining capacity, trade sources said this week.
Kyokuto Petroleum Industries intends to decide by end March whether to cut crude distillation unit capacity by 23,000 b/d at its 175,000 b/d Chiba refinery in Tokyo Bay to comply with the government regulations, Platts reported earlier.
Meanwhile, Cosmo Oil, which earlier announced a reduction of refining capacity at its 155,000 b/d Yokkaichi refinery in central Japan, will keep its bunker fuel supply volume unchanged at around 40,000 mt/month after April, a company source said Thursday. Cosmo will reduce refining capacity at Yokkaichi by 43,000 b/d to 112,000 b/d by end March, Platts reported earlier.
Japan's bunker demand has risen in March on expectations of tightening supply after April. March sales are expected to reach 360,000-370,000 mt as a result of strong demand, especially from term customers, traders said. That would be about 9% higher than estimated February sales of 330,000-340,000 mt.
Traders Thursday said they had almost sold out of March delivery fuel as a result of the jump in demand.
Japan's national target for its residue cracking to crude distillation ratio will be raised to around 13% of total refining capacity from end March, from 10% currently.
Refiners have been set individual ratio targets, which are based on their residue cracking capacities when the regulations were introduced in 2010.
Source: Platts
Idemitsu Kosan currently sells a combined 60,000-70,000 mt/month of bunker fuel from its Tokuyama refinery in western Japan and Chiba refinery in Tokyo Bay, which will fall to below 60,000 mt/month after April, a company source said.
Traders said Idemitsu's supply was likely to fall to around 50,000 mt/month.
The refiner will cease operations at the 120,000 b/d Tokuyama refinery by end March due to the change in regulations.
Meanwhile, Kyokuto Petroleum Industries will cut its bunker fuel supply from 20,000-25,000 mt/month in the current fiscal year (April 2013-March 2014) to 15,000-20,000 mt/month in the next fiscal year as it cuts refining capacity, trade sources said this week.
Kyokuto Petroleum Industries intends to decide by end March whether to cut crude distillation unit capacity by 23,000 b/d at its 175,000 b/d Chiba refinery in Tokyo Bay to comply with the government regulations, Platts reported earlier.
Meanwhile, Cosmo Oil, which earlier announced a reduction of refining capacity at its 155,000 b/d Yokkaichi refinery in central Japan, will keep its bunker fuel supply volume unchanged at around 40,000 mt/month after April, a company source said Thursday. Cosmo will reduce refining capacity at Yokkaichi by 43,000 b/d to 112,000 b/d by end March, Platts reported earlier.
Japan's bunker demand has risen in March on expectations of tightening supply after April. March sales are expected to reach 360,000-370,000 mt as a result of strong demand, especially from term customers, traders said. That would be about 9% higher than estimated February sales of 330,000-340,000 mt.
Traders Thursday said they had almost sold out of March delivery fuel as a result of the jump in demand.
Japan's national target for its residue cracking to crude distillation ratio will be raised to around 13% of total refining capacity from end March, from 10% currently.
Refiners have been set individual ratio targets, which are based on their residue cracking capacities when the regulations were introduced in 2010.
Source: Platts
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