Singapore — South Korean refiner SK Energy has started supplying marine gasoil with maximum 0.5% sulfur at South Korean ports from November, less than eight weeks before the new IMO 2020 low sulfur mandate for marine fuels kick starts in January 2020, a company source said this week.
With this latest development, the company halted the supply of MGO with maximum 1% sulfur.
Demand for 0.5% LSMGO is expected to rise as the International Maritime Organization's global low sulfur marine fuel mandate nears.
The new 0.5% sulfur marine gasoil is offered at Busan, Ulsan, Yeosu, Onsan, Kwangyang and Pohang, and is priced against either S&P Global Platts South Korean delivered LSMGO prices or the Mean of Platts Singapore 10 ppm gasoil prices, the source added.
On Thursday, Platts had assessed delivered South Korea 0.1% LSMGO at $649.50/mt, while 10 ppm gasoil was assessed at $569.78/mt.
SK Energy has also been supplying another low sulfur marine gasoil grade, the 10 ppm (0.001%) marine gasoil, since October 2018.
Demand for this grade has been steady, with volumes at around 40,000 mt/month, the company source said.
Shipowners have been buying the VLSMGO to wash out the high sulfur bunker fuel in their tanks.
"VLSMGO is more efficient [than LSMGO] in washing out the sulfur content in HSFO," the source said.
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