The South Korean bunker fuel oil market has been facing tight 380 CST bunker fuel this week, with refiner S-Oil unable to deliver on-specification fuel and a second refiner, SK Innovation tight on stocks.
Due to problems at S-Oil's refinery with blending high sulfur fuel oil to bunker fuel, S-Oil was unable to supply spot bunker fuel in the market for the last two weeks, a company source said.
S-Oil has also exported an MR-sized cargo of 380 CST HSFO this month, a source with the refiner confirmed. Market sources added that the cargo was off-specification bunker fuel, as reported by S&P Global Platts earlier.
A second refiner SK Innovation was also facing tight supplies.
"It will be tight [for us] until this week. From last week, I have had to manage my sales volume as demand was higher than our refinery's production," a company source said.
GS Caltex was heard to be the only refiner with sufficient availabilities. "Only GS Caltex is kind of healthy and their earliest delivery date is after January 28. Hyundai OilBank has stocks too but not at [every port]," a trader said.
Bunker premiums were understood to be holding steady amid strong winter demand, but will be under pressure as supply resumed to normal. "When S-Oil resumes offer, it will affect [the] premium level," a trader said.
