South Korean bunker fuel premiums highest this year on tight supply
A lack of fuel oil cargo supplies in South Korea has seen bunker premiums soar to new heights this week.
The spread between South Korean delivered 380 CST bunker fuel and Mean of Platts Singapore 380 CST high sulfur fuel oil assessments was $53/mt to $55/mt this week. The last time the spread was this high was February 2 last year at $55.14/mt.
Trade sources said there were fewer fuel oil cargo imports from Singapore in August, partly due to high Singapore bunker prices this month and concerns over Singapore marine fuel quality issues, which persisted since July.
The Singapore delivered 380 CST bunker fuel in August has so far averaged $456.60/mt, while in July, it averaged $462.92/mt and in June, $447.80/mt, S&P Global Platts data showed.
Trade sources said SK Energy and Hyundai Oilbank refineries imported a small volume from Singapore for the summer as it is the low season.
“When GS Caltex planned August production, they minimized fuel oil and increased bitumen instead,” a trader said.
The tight supply was compounded by typhoons Soulik and Cimaron, which have battered South Korea’s southwestern coastline, making bunkering operations inoperable, trade sources added.