SEOUL: The threat of a possible strike to be led by bunker fuel barge operators on October 5 at South Korea’s southeastern port of Busan has raised concerns about bunker fuel disruption and shored up prices, South Korean traders said Friday morning.
During the Platts Market On Close assessment process Thursday, the South Korean 380 CST delivered bunker fuel grade was assessed at a one-month high of $276.50/mt, up $11/mt from Wednesday.
South Korean 380 CST delivered bunker fuel prices were last higher on September 1, 2015, at $280/mt.
It is understood that the dispute between barge operators and South Korean refiners arose over barge operating fees paid to barge companies that they deemed too low.
Traders said that barge operators and refiners, among other parties, met Thursday in a bid to reach a settlement over the issue, but talks were inconclusive.
“There were no agreements between parties yesterday [Thursday] and while there have been more talks scheduled for today and tomorrow, it’s not going well, so it looks like the strike is going ahead on October 5,” a South Korean trader said Friday morning.
“Refiners are offering bunker fuel cargoes but it’s all subject to barge strikes … they don’t want to offer low prices because they know there’s a high chance of the strike happening, so they are just offering at high prices,” he said.
The duration of the strike at Busan, should it proceed, could not be confirmed Thursday.
While the strike action is concentrated at Busan, sources said it was heard that the barge operators were urging counterparts at other ports to join in as well.
“If Busan [barge operators] go on strike, Ulsan and Yosu may be impacted as well, as they [the barge operators] are pushing them there to go on strike too,” another South Korea-based source said late Thursday, adding that this was possible due to geographical proximity, with Ulsan “only around five hours sailing time away from Busan.”
Sources said continuing uncertainty over the simmering issue was keeping sentiment for bunker fuel bullish and providing a floor to the market.
“One refiner said they will not supply bunker fuel at Busan for October 5, and another said they will not supply [at Busan] over October 5-10,” a trader said late Thursday.
“If Ulsan goes on strike as well, then vessels that need to take delivery of bunker fuel may all go to the Yosu port area, so bunkering inquiries will be concentrated there,” he said, adding that this could lead to berth congestion and supply shortages.
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