South Korean refinery margins likely to remain strong through March

South Korea’s high refining margins are likely to remain robust through March, when seasonal plant closures for maintenance occur. Refining companies will presumably keep run rates high to take
advantage of better margins until the maintenance season in March, which would raise export volumes.
 
Strong demand for middle distillates, especially kerosene, due to winter in North Asia, will support South Korea’s refining margins. Exports to Japan of more than two million barrels of kerosene for February have already been put in place. However, Japanese buyers are careful not to pay high premiums to import kerosene from South Korea because if the weather gets warmer, demand could fall.
 
Preliminary government data showed that oil products were South Korea’s largest export item last year, with shipments totaling US$56.2 billion. The country is the world’s sixth-largest refiner. South Korea’s refiners, SK Energy, Hyundai Oilbank Corp., GS Caltex and S-Oil Corp., are expected to maintain full utilization levels until the maintenance period comes. The four South Korean refiners are expected to process around 2.7 million barrels of crude oil a day in February, according to a Dow Jones Newswires survey. (January 30, 2013)