A rise in bunker fuel supply in South Korea narrowed the 380 CST bunker fuel premium over Mean of Platts Singapore 380 CST high sulfur fuel oil assessment to a seven-month low of $20.79/mt.

The premium was the lowest since August 29 last year, Platts data showed.

Bunker traders and refiners said supply currently exceeded demand in South Korea, forcing prices down.

Three of South Korea's four refiners, SK Energy, S-Oil and GS Caltex, were actively selling bunker fuel in the spot market, while Hyundai Oilbank was less active, a supplier in the country said Monday.

SK Energy has sufficient bunker fuel supply because it is increasing output of high sulfur fuel oil and reducing output of asphalt in response to weakening sales of the latter, a trader said.

Turnarounds at secondary units were increasing bunker fuel output at GS Caltex and S-Oil, bunker traders said.

GS Caltex is due to shut the 94,000 b/d residue fluid catalytic cracker at its 775,000 b/d Yeosu refinery for a month from Tuesday, which will increase its supply of bunker fuel to 200,000 mt in April from the usual 150,000 mt/month, one bunker trader said.

S-Oil shut the 52,000 b/d No.1 residue hydro-desulfurizing unit at its 669,000 b/d Onsan refinery April 1 and plans to restart it April 25, which is pushing up bunker fuel oil output to over 200,000 mt in April from its usual sales of 160,000-200,000 mt/month, a bunker trader in Seoul said.

Meanwhile, Hyundai Oilbank will cut its bunker supply by 10,000 mt to 150,000 mt in April due to a turnaround at the 110,000 b/d crude distillation unit at its 390,000 b/d Daesan refinery over April 3-May 17.

Despite that decrease, oversupply in South Korea's bunker fuel market will likely continue until mid-May, when GS Caltex restarts its RFCC, South Korean bunker refiners and traders said.