Asia/Pacific News
Japanese Refiners Reducing Bunker Supply
Two Japanese refiners are reducing their bunker fuel supply to comply with new government regulations, Platts reports.
The regulations aim to raise the ratio of residue cracking to crude distillation to about 13 percent of total refining capacity, compared with the current 10 percent, starting at the end of March.
Idemitsu Kosan, which now sells 60,000 to 70,000 metric tonnes (mt) per month of bunker fuel from two refineries will reduce that volume to around 50,000 mt per month, traders estimated.
Idemitsu Kosan will stop operating one of the two refineries, Tokuyama in Western Japan, by the end of March.
Kyokuto Petroleum Industries will reduce its bunker fuel supply from the current level of 20,000 to 25,000 mt per month to between 15,000 and 20,000 mt per month in the next fiscal year.
The refiner plans to decide by the end of March whether it will reduce its crude distillation unit capacity by 23,000 barrels per day at its Chiba refinery in Tokyo Bay.
A third refiner, Cosmo Oil, previously announced a reduction of refining capacity but will keep its bunker supply volume steady at about 40,000 mt per month.
With the reduction in supply expected in April, bunker sales in Japan are expected to pick up this month, hitting between 360,000 and 370,000 mt for March, 9 percent more than in February.
Russia has also been working to increase the advanced processing of oil at its refineries, prompting warnings that it could "starve" Europe of heavy fuel oil.
