South Korea’s SK Energy, owned by SK Innovation, has kicked off August-loading spot diesel sales, being the first refiner in northeast Asia to offer cargoes, four sources close to the matter said on Tuesday.

SK Energy is seeking to sell at least three cargoes of 300,000-barrel low-sulphur diesel spot lots for loading in first-half August, the sources added. The tender closes on July 11 with same-day validity.

The loading timings for these cargoes are Aug. 7-9, Aug. 10-12 and Aug. 15-17, the sources said.

At least three more refiners in South Korea and Taiwan are likely to start August sales in the next few days, as the market enters the mid-July timeline, one of the sources said.

SK Energy, which is typically not the first in the market to start spot sales for the following month, is likely to sell more cargoes in the next two weeks as the refiner can typically sell up to five or six 10 parts per million (ppm) sulphur diesel cargoes per month, one of the sources said.

The refiner’s Ulsan crude units should also be back online after scheduled overhauls earlier, contributing to higher overall crude runs, the source added.

Furthermore, cash netbacks remain better for cargoes loading earlier in August – given the backwardated market structure now where front-month prices are trading higher than forward-month prices, another of the sources said.

Earlier July-loading spot cargoes by the refiner were sold at discounts of between 20 cents and 70 cents a barrel to Singapore quotes, Reuters records showed.

SK Energy typically does not give official comments on the status of their tenders.
Source: Reuters (Reporting by Trixie Yap; Editing by Rashmi Aich)