S Korea Refinery to Reduce Runs in July

South Korea’s biggest refiner SK is looking to reduce the run rate at the Ulsan plant in July according to Bloomberg sources.

• Refinery runs for July may be approximately 10% lower than April and May following planned works in June. Asian refiners are considering lower run rates due to declining margins.
• The Singapore Gasoil-Dubai crack has fallen from 41$/bbl in January to 12.2$/bbl while the gasoline-Dubai crack is down from over 20$/bbl in late March to 9.5$/bbl.
• A declining trend in Asian refining margins has been driven by ample supplies of diesel on the back of weak global demand and higher China exports and by slower gasoline demand in major consuming nations such as Indonesia. The support for crude prices following the OPEC production cut announcement has also negatively impacted the profits of refiners.