MOSCOW (MRC) -- SK Innovation, owner of South Korea’s top refiner SK Energy, said it sees a rebound in refining margins in 2019 supported by firm diesel demand in the second half of the year, reported Reuters.
SK Innovation posted an operating loss of 279 billion won (USD250.81 million) in the October-December period, dented by low refining margins, compared with an operating profit of 841 billion won a year earlier, the company said in a statement.
Weak gasoline margins have weighed on overall refining margins, profits of refining a barrel of crude into refined products, dragged down by increased global gasoline volumes. Asian gasoline cracks in Singapore are close to the lowest since 2011.
“Despite concerns about global refinery capacity addition and a global economic slowdown, favorable market conditions are expected in the second half of the year, supported by diesel (demand) ahead of sulfur regulations by the International Marine Organization from 2020,” Lee Myung-young, head of finance division, SK Innovation, said on a call with analysts.
S-Oil, South Korea’s third-biggest refiner, said on Monday refining margins were expected to improve, helped by rising diesel demand growth in the second half of the year ahead of the implementation of tougher sulfur cap for marine fuel from 2020.
Kim Ji-yong, head of corporate planning office at SK Energy, said gasoline margins are seen to recover in 2019 as Chinese export volumes are expected to be reduced on lower import quotas than last year.
For 2019, China issued its first batch of crude oil import quotas at 89.84 million tonnes, lower than for the same batch last year, reflecting slowing crude demand growth for the first half of 2019 in China, according to the documents and Reuters data.
As MRC reported earlier, South Korea’s leading LPG supplier SK Gas Ltd. (part of SK Corporation) will spend KRW 2.02 trillion (~ USD 1.8 billion) to build a combined-cycle power plant and polypropylene (PP) plant in the southeastern industrial city of Ulsan, South Korea.
SK Global Chemical is a pioneering petrochemical company in Korea, being the first in the country to build a naphtha cracking facility in 1972. Through continuous facility investment, R&D and technological improvement, the company has maintained its position as the leader of the petrochemical industry in Korea.
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