S KOREA DATA: Jan crude imports fall, but condensate intake rises to support medical device manufacturing

Seoul — South Korea imported 76.874 million barrels, or 2.48 million b/d, of crude oil in January, down 17.1% from 92.712 million barrels a year earlier, as local refiners kept oil products output to a minimum amid tepid consumer transportation fuel demand, latest data from state-run Korea National Oil Corp. showed.

This marks the fourth consecutive decline since October last year and the smallest monthly shipment since June 2020, when the country received 74.659 million barrels.

However, a more in-depth breakdown of the import data showed that South Korea maintained strong demand for condensate, as imports from its major ultra-light crude suppliers Qatar, Australia and Norway were higher in January.

The country's refinery feedstock imports from the three condensate suppliers combined came in at 8.3 million barrels, up 26.9% from the same period a year earlier and up 23.9% from 6.7 million barrels received in December 2020, the KNOC data showed.

South Korean refiners with condensate splitters have received at least 3 million barrels of ultra-light crude grades including Ormen Lange and Snohvit from Norway in the third and fourth quarter of 2020 and the country is expected to import more than 4 million barrels from the North Sea producer in Q1 2021, according to South Korean petrochemical and refinery feedstock managers surveyed by S&P Global Platts.

Heightened health and infection concerns spurred by the coronavirus pandemic have seen demand for certain petrochemical products increase sharply due to the surge in the use of medical equipment, cleaning chemicals and hygiene products.

South Korea's demand for polypropylene and polyethylene, which are essential for making mask filters, hypodermic needles and protective medical suits and gears, jumped more than 30% in 2020, according to Korea Petrochemical Industry Association and downstream market analysts based in Seoul.

Accordingly, South Korean refiners and petrochemical makers have been making rigorous efforts to secure ample supply of base feedstock condensate and naphtha for downstream propylene output over recent trading cycles, and the companies are set to increase their reliance on Qatari, Australian and Norwegian ultra-light crude supply, refinery officials and industry analysts in Seoul said.

US, Middle Eastern crude

South Korean imports of US crude, mostly light sweet grades, dropped 59.5% year on year in January, while medium and heavy sour crude shipments from its traditional suppliers in the Middle East also registered a double-digit percentage decline.

Local refiners imported 5.427 million barrels of US crude in January, compared with 13.415 million barrels they received a year earlier.

The cutback in US crude imports marks the ninth consecutive monthly decline.

But January imports were up 17.9% from 4.603 million barrels in December last year, which marked the smallest monthly import volume since June 2018.

South Korea's crude imports from its top supplier Saudi Arabia also fell 16.4% year on year to 22.178 million barrels in January, while imports from Iraq dropped 39.7% to 5.821 million barrels last month. Shipments from the UAE, mostly light sour Murban and medium sour Upper Zakum crude, plunged 40.3% from a year earlier to 4.906 million barrels in January.

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South Korea's top crude suppliers (Unit: '000 barrels)

*Total includes other suppliers

Source: Korea National Oil Corp.