The price of 380 CST bunker fuel in South Korea hit a three-year high Tuesday amid tight supply.

At the Asian close Tuesday, 380 CST bunker fuel for delivery in South Korea was up $5/mt day on day to be assessed at $411.50/mt, the highest since December 10, 2014, when it was assessed at $414/mt.

Multiple suppliers were heard to be running low on bunker fuel inventory as peak winter season demand this year has exceeded expectations.

“The market is definitely tighter than before and supply will be tight throughout December,” a bunker supplier in South Korea said Wednesday.

Traders said the country’s refineries were heard to have no plans to increase production.

“It is very difficult to meet demand levels every winter… we know demand has increased so much, but cannot [make preparations] since our storage tanks are limited [in capacity],” a South Korean trader said late Tuesday.

“We do not have much stock until the 25th at Ulsan and Pusan… earliest deliveries are on the 26th,” he added.

A few suppliers were heard have imposed daily sales limits until replenishment cargoes arrive at the end of the month.

Given the high prices in South Korea, market participants had expected some displacement of bunker fuel demand from South Korean ports to Hong Kong.

“This large price spread between South Korea [and other regions] has never been seen before,” a trader said Wednesday.

However, suppliers in neighboring ports said they had yet to see a noticable increase in demand, S&P Global Platts reported earlier.

“It depends on the routing of the vessels… if the vessels are going to Taiwan or Australia, they probably will not divert to Hong Kong for bunkering,” one source in Hong Kong said.

Source: Hellenic Shipping News.