South Korea’s third-largest refiner S-Oil on Monday reported an operating loss of KRW1 trillion ($815.16 million) for the first quarter of 2020, plunging from a KRW270 billion operating profit in the first quarter of 2019. The company attributed the loss to inventory-related losses due to the crash in oil prices and diminished fuel demand amid coronavirus-related travel restrictions.
The refiner, however, expected margins to gradually “bottom out” in the second quarter when countries reopen factories and resume businesses. Asia’s benchmark refining margins have averaged at negative $0.82/barrel so far this month, falling from an average of $1.18/barrel in the first quarter.
S-Oil, which has a 669,000-bpd refinery, said it planned to run its crude distillate units (CDUs) at 100% in this quarter despite falling demand. It also intends to shut its 90,000-bpd No.1 CDU and 76,200-bpd no.2 residue fluid catalytic cracker (RFCC) for turnarounds in the third quarter. The company operated its CDUs at 93.4% on average in the January-March quarter, compared to 97.8% in the previous quarter.
