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South Korea crude oil imports from USA rise in May for first time over past twelve months

June 21/2021

MOSCOW (MRC) -- South Korea's imports of US crude oil rose 21.3% from a year earlier in May, marking the first year-on-year increase in 12 months, as local refiners continued to raise middle distillate output amid improving transportation fuel demand and a widening Brent-Dubai price spread made North American barrels competitive, reported S&P Global with reference to latest data from Korea Customs Service.

The world's fifth-largest crude importer received 1.227 million mt, or 8.99 million barrels, of US oil in May, up from 7.41 million barrels a year earlier, the customs data showed. The country has been receiving more than 4 VLCCs/month from the US since February.

The majority of US crudes that South Korean refiners purchase are light sweet grades rich in middle distillate yield, including WTI and Eagle Ford.

South Korean refiners are expected to continue raising light sweet US crude purchases - and overall feedstock imports - as industrial and consumer fuel demand is set to strengthen on the back of robust economic recovery with the nationwide vaccination program gathering pace, refinery officials and analysts at Korea National Oil Corp. and Korea Petroleum Association told S&P Global.

The country is forecast to consume 240,000 b/d of gasoline in Q2, up from 224,000 b/d in Q1, according to latest data from Platts Analytics.

In total, South Korea imported 10.912 million mt, or 79.98 million barrels, of crude oil in May, up 1.5% year on year, the customs data showed.

South Korea's May crude imports from top supplier Saudi Arabia fell 18.7% year on year to 23.47 million barrels, while shipments from Kuwait fell 37.8% to 8.19 million barrels and from Iraq fell 5.1% to 5.07 million barrels, the customs data showed. However, local refiners are expected to see Middle Eastern crude intake increase gradually in coming months after OPEC and its allies on June 1 agreed to follow through on plans to hike crude production through July.

Saudi Aramco has allocated most Asia-Pacific refiners with their requested term crude volumes for loading in July, Platts reported earlier based on a survey of multiple feedstock procurement managers and refinery officials across Asia. The allocation of full volumes is largely in line with market expectations, with Saudi plans to raise supplies after the OPEC+ group's decision to ease production cuts amid firming demand cues aided by the global recovery.

In addition, South Korean refiners could trim some of their North Sea and West African crude purchases, while increasing Middle Eastern crude procurement, in the second half of the year as spot cargoes from the west of Suez appear expensive after the Brent-Dubai price spread flipped to a lofty premium in recent trading cycles, according to feedstock procurement managers at two South Korean refiners.

The refiners are also keen to pick up more US crude cargoes in the spot market as North American grades are often traded on a Dubai pricing basis in the Northeast Asian market.

South Korea's crude stockpiles fell 14.4% year on year to 41.75 million barrels in April, KNOC data showed. But the

As MRC informed earlier, GS Caltex, a major South Korean petrochemical producer, is planning to start up its new mixed-feed cracker in Yeosu in June 2021. This schedule is earlier than the initial plan of 2022. The new cracker can produce 790,000 tons/year of ethylene and 430,000 tons/year of propylene.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.
Author:Margaret Volkova
Tags:Asia, Europe, PP, PE, crude and gaz condensate, propylene, ethylene, petrochemistry, GS Caltex, Saudi Arabia, USA, South Korea.
Category:General News
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