S Korea refiners to cut Mar bunker sales, volumes diverted to exports
Tokyo (Platts)--4Mar2011/543 am EST/1043 GMT
South Korean refiners plan to reduce bonded bunker fuel sales at domestic
ports to 680,000-700,000 mt in March, from 740,000 mt in February, with two
companies -- S-Oil and Hyundai Oilbank -- preferring to divert more volumes
for exports amid rising regional prices, industry sources said Friday.
S-Oil plans to sell 130,000-140,000 mt of bonded bunker fuel in March,
down from 160,000 mt in February, industry sources said. But the company plans
to export 132,000 mt of high sulfur fuel oil in March, compared to more
typical volumes of 80,000 mt/month.
The refiner has sold the March-loading HSFO cargoes at a premium of
$8-10/mt to the Mean of Platts 380 CST HSFO assessments on FOB South Korea
By comparison, South Korea's 380 CST bunker premium was $24.53/mt to MOPS
380 CST HSFO assessments Thursday. But this includes barging costs of about
$10/mt as well as other expenses, which are borne by the supplier of the
bonded bunker fuel.
"If we compare FOB values, bunker prices and export prices are similar.
Considering the time and effort for bunker shipments, exporting high sulfur
fuel oil is more profitable," a source close to the matter said.
In addition to similar premium levels, refiners also prefer to export
cargoes as they are usually larger sizes of 30,000-55,000 mt, compared with
bonded bunker fuel shipments of about 300-2,500 mt.
Fellow refiner Hyundai Oilbank also plans to reduce its bonded bunker
fuel sales to 150,000-160,000 mt in March, compared with 180,000 mt in
February, a company source said. The refiner plans to increase HSFO exports to
220,000 mt in March, from 165,000 mt in February, the source added.
A separate Hyundai Oilbank source said that the company is getting
premiums of more than $10/mt to MOPS 380 CST HSFO assessments for March
But GS Caltex and SK Energy plan to maintain their March bonded bunker
fuel sales at 220,000 mt and 180,000 mt, respectively -- similar to February
Bunker demand in South Korea has been weak since late February because of
volatile crude prices, while supplies are ample, say industry sources.
"Shipping companies are waiting and not buying," said a refining source.
--Atsuko Kawasaki, email@example.com
Similar stories appear in Bunkerwire.
See more information at http://bit.ly/Bunkerwire