Sammy Six of global energy and commodity price reporting agency Argus Media on Friday (27 November) published a summary on the tightening supply of bunker fuel in South Korea as refineries are reducing output due to weaker refining margins:
Bunker supplies in South Korea are tightening with cargo and barge availability constraints.
Domestic refiners Hyundai Oilbank and S-Oil, which have a refining capacity of 650,000 b/d and 669,000 b/d respectively, are especially short of bunker supplies after cutting output or reducing their refinery throughput for much of this year because of weaker margins. This has led to lower output of most refined products, including very-low sulphur fuel oil (VLSFO).
Demand for middle distillates is also surging ahead of winter. This has led to limited supplies of fuel oil and gasoil bunkers in Busan, the country’s largest bunker port.
Only SK Energy, which operates an 840,000 b/d refinery in Ulsan, is still offering, according to various market participants in Singapore and South Korea.
GS Caltex, which has a refinery capacity of 790,000 b/d, produces less VLSFO compared with the other three South Korean refiners and mainly focuses on high-sulphur fuel oil.
“If you take out two out of only four producers of VLSFO, you will be stretched”, said one Singapore trader.
“Like elsewhere, refineries don’t want to hold too much inventory in their tanks now because of the upcoming end of the financial year”, according to a Singapore supplier.
There are a few independent bunker suppliers operating in South Korea, such as GS Global, Olive and Mabong, but they only have limited volumes available.
“The few barrels available are mainly going for contract bunkers, with limited availability of spot barrels as a result”, according to one Singapore buyer.
South Korea also struggles with a lack of barge availability. “South Korea, similar to Japan, is always tight with barges, as each time they need to be cleared by customs after loading from the system and before supplying vessels”, according to another Singapore buyer.
Argus assessed the premium of VLSFO in South Korea over Singapore at $29.90/t yesterday, the highest since 3 September 2020. The premium has averaged $13.40/t so far this year.
Photo credit and source: Argus Media
Published: 30 November, 2020
Emanuela Franchini, formerly from Asamar, joins the international bunkering firm effective 1 May, 2019.
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‘Therefore, representing the players of the Malaysian bunker industry, we sincerely hope that this matter can be refined and reconsidered immediately so that all parties benefit together,’ says communication.
‘We will accelerate low-sulphur bunker fuel projects and the revamping of storage and transportation facilities to rapidly expand market share,’ it says in FY 2019 report.
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‘We will operate in the Singapore bunkering market from the Tokyo, with support from local staff at Sumitomo Corporation Singapore,’ source tells Manifold Times.
Changes include abolishing advance declaration of bunkers as dangerous cargo, reducing pilotage fees on vessels receiving bunkers, and a ‘whitelist’ system for bunker tankers.
Claim relates to deliveries of MGO to the vessels Pacific Diligence, Pacific Valkyrie, Pacific Defiance, Crest Alpha 1, and Pacific Warlock between March 2020 to April 2020.
3,490 mt of LSFO from Itochu Enex was lifted at Universal Terminal; the same bunker stem was bought by Global Marine Logistics and delivered by bunker tanker Juma to receiving vessel Kirana Nawa.
Representatives of Veritas Petroleum Services, Maersk, INTERTANKO, ElbOil Singapore, and SDE International provide insight from their respective fields of expertise on what lies ahead.
