S. Korea's SK Energy to cut low sulfur bunker fuel output in March, April on VRDS maintenance
22nd February 2021 08:31 GMT

South Korea's refiner SK Energy will cut its production of bunker fuel with maximum 0.5% sulfur to 150,000-200,000 mt a month over March to April from 250,000 mt in February due to turnaround at its vacuum residue desulfurizaion unit, market sources said on Feb. 22.

The company plans to shut its 40,000 b/d vacuum residue desulfurization unit at 840,000 b/d Ulsan refinery from March 19-April 21 for maintenance, S&P Global Platts reported previously.

To make up the shortfall in production, SK Energy has bought one MR-sized low sulfur fuel oil cargo from Singapore from arrival in March, the sources added.

Meanwhile, the company has been running the Ulsan refinery at about 60%-70% since January, while it does not have any plan to raise the rates at this moment, a company source said.

SK Energy sold about 300,000mt/mt of bunker fuel in December, but the refiner has reduced supply since January because of run cuts and higher production of middle distillates.

South Korea's bunker supply tightened due to lower production from SK Energy and other refiners in January, which raised the South Korea's marine fuel 0.5%S delivered bunker premium to Singapore 10 ppm sulfur gasoil to $63.51/mt on Jan. 26, the highest since Jan. 28, last year, when it was $80.79/mt, Platts data showed.

The high premiums pushed away demand from the country, cutting the premium lower. South Korea's marine fuel 0.5%s delivered bunker got lower than Singapore 10 ppm gasoil on Feb. 17 for the first time since Dec. 18, 2020, and it was $9.52/mt lower than Singapore 10 ppm gasoil on Feb. 19, according to Platts data. The discount was the widest since July 30 last year, Platts data showed.

Bunkerworld .,
22nd February 2021 08:31 GMT