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South Korean refining margins boosted by exports

January 15/2013

MOSCOW (MRC) -- South Korean refining margins are expected to recover in January-March on increase in global oil prices amid expanding demand for heating oil and an "upswing in the chemical business," reported hydrocarbonprocessing with the reference to Hyundai Securities"s research note.

Refining margins will likely stay firm for South Korean refineries in 2013, traders and analysts said, while European refineries will continue to operate at low capacities this year, as they are aging and economically unviable facilities will continue to close due to financing difficulties, analyst Yeon-ju Park of Daewoo Securities said in its 2013 outlook.
He expects global supply of oil products to increase by 700,000 bpd in 2013 but demand to expand more, by 800,000 bpd.

Despite a slump in the global refining sector due to the economic downturn, supply has been tight due to both permanent and maintenance-related shutdowns in the US, Europe and Japan.

"As such, the export market for Korean refiners should grow," Korea Investment & Securities said in a note.

South Korean refineries saw their margins contract in the October-December period due to a supply glut as India boosted refining capacity. Thus, as MRC wrote earlier, Reliance Industries plans to expand capacity at its refineries in the western state of Gujarat. Earlier last year, Reliance unveiled an USD18 billion investment plan for India over the next five years.

South Korean refiners maintained high output. SK Energy, Hyundai Oilbank Corp, GS Caltex and S-Oil Corp. continue to operate at almost full refining capacity and may not cut refinery throughput until the spring maintenance season. The four South Korean refiners will process around 2.67 million bpd of crude in January, according to a Dow Jones Newswires survey. They processed around 2.58 million bpd of oil in November, roughly flat compared with 2.61 million bbl a year earlier, data from Korea National Oil Corp. showed.


mrcplast.com
Author:Margaret Volkova
Tags:oil, GS Caltex, Reliance Industries, SK Energy, South Korea.
Category:General News
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