S Korea HSFO differential hits 4-month high on tight supply
9th December 2020 12:41 GMT

Tight supply of the 380 CST high sulfur bunker fuel grade in South Korea has led its differential to benchmark FOB Singapore high sulfur fuel oil cargo assessments to a 4-month high of $73.06/mt on Dec. 9, S&P Global Platts data showed.

The differential was last higher at $77.92/mt on July 23, Platts data showed.

The tightness is expected to ease from Dec. 20, when sole producer GS Caltex resumes supply, bringing it forward from the original resumption date of Dec. 25, a company source said.

GS Caltex typically produces 120,000 mt of high sulfur marine fuel monthly, of which 80,000 mt is reserved for the spot market.

Previously, refiner Hyundai Oilbank, which does not produce the grade but imports it quarterly, was able to supply in limited quantities, but they have since ran out, market sources said.

High sulfur bunker fuel demand has risen across North Asia as more vessels that have completed scrubber installations emerged.

Refiners had configured their refineries to produce more low sulfur fuel oil instead of high sulfur fuel oil since the International Maritime Organization's global sulfur cap kicked in earlier this year.

Bunkerworld .,
9th December 2020 12:41 GMT