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S Korean bunker premiums drop to 2-month low, but demand to improve in Q4

South Korea’s delivered 380 CST bunker fuel premium to the Mean of Platts Singapore 380 CST high sulfur fuel oil assessment fell to a two-month low at $20.92/mt Tuesday on weak demand amid the holidays, according to S&P Global Platts data.

It was last lower at $19.58/mt on July 26, the data showed.
Market sources, however, expect demand to improve in the fourth quarter.

“Usually demand increases and supply tightens in Q4 [as there will be] more shipping before the December holidays,” a trader said.

Premiums averaged $43.52/mt in August, compared to $33.58/mt from the start of September to September 25, according to Platts data.

Bunker premiums had soared end-August due to a lack of fuel oil supplies, market sources said. The supply tightness eased in early September with the arrival of replenishment cargoes, while demand fell, sources added.

This week demand thinned further due to the Chuseok public holidays in South Korea from Sunday to Wednesday.

“Demand has decreased a lot due to the holidays,” a trader said.

Barge operations were also scaled down during the holidays, a supplier said.

Source: Platts

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