South Korean refiner Hyundai Oilbank plans to supply 380 CST bunker fuel with a maximum sulfur content of 1% from its Busan terminal in the country's southeast in June, a company source said Tuesday.

The refiner started supplying the low sulfur bunker fuel from its 390,000 b/d Daesan refinery to the western coast ports on Monday, but has not started supplying the southern and eastern coast ports.

South Korea has been receiving steady demand since last year for the low sulfur bunker grade after the International Maritime Organization designated waters off North America as part of the Emission Control Area as of August 1, 2012. This requires vessels plying in the area to use bunker fuel with a maximum sulfur content of 1%.

Refiners SK Energy and GS Caltex were the first to supply low sulfur bunker fuel in June 2012. Their current combined sales volume of the low sulfur grade bunker fuel is about 30,000-40,000 mt/month, industry sources said Tuesday.

Hyundai Oilbank expects to sell about 5,000 mt/month of the grade from its Busan terminal, and about 1,500 mt/month from the Daesan refinery. The refiner typically sells about 150,000 mt/month of bunker fuel including high sulfur and low sulfur bunker fuel oil, marine gasoil and marine diesel oil.

Meanwhile, S-Oil also plans to start low sulfur bunker supply in Busan and Ulsan in April, Platts reported previously. The refiner will be able to start shipments in early April, a company source said Tuesday.

The total bunker fuel market in South Korea - both high sulfur and low sulfur product - is estimated at about 700,000-750,000 mt/month.

Source: Platts