<article><p class="lead">South Korean utilities are seeking to import low-sulphur fuel oil (LSFO) as a power generation fuel after the government shut some coal-fired power plants to reduce winter air pollution. </p><p>South Korea is <a href="https://direct.argusmedia.com/newsandanalysis/article/2163715">idling 9-16 coal-fired units</a> and putting an 80pc restriction on output from the remaining capacity as part of its winter fine-dust management policy. This is up from daily suspensions at 8-15 units in the December 2019 to February 2020 winter season. </p><p>The shutdowns have prompted utility East-West Power (EWP) to seek 45,000t (290,000 bl) of 0.3pc sulphur LSFO for 12-16 December delivery to Ulsan on a cfr basis. Fellow utility Korea District Heating Company (KDHC) last week secured two imported 30,000t cargoes of 0.3pc sulphur LSFO through a tender for December-January delivery. </p><p>South Korea typically relies on imported LSFO as an emergency fuel to meet base-load power generation demand at times when other fuels are unavailable. EWP sought 155,000t of spot fuel oil for prompt delivery in March 2018, when the government announced plans to <a href="https://direct.argusmedia.com/newsandanalysis/article/1643632">idle coal-fired power plants</a>. And the utility returned to the spot market in September this year <a href="https://direct.argusmedia.com/newsandanalysis/article/2142950">to buy prompt-loading LSFO</a> after two typhoons forced several domestic nuclear power plants to close. </p><p>The latest demand is already almost equal to imports over the whole of last winter. EWP imported 50,000t of 0.3pc LSFO through a spot tender for delivery during January 2020, while KDHC imported two 30,000t cargoes of 0.3pc LSFO over the winter. The two utilities are the only current buyers of imported LSFO.</p><p>But traders said South Korean utilities might limit LSFO imports because of rising nuclear power supply. The country's nuclear availability is scheduled to average 19.2GW in December-February, up from actual generation of 16.4GW in the same period a year earlier. And the government says it has made advance purchases of around 3.6mn t of LNG for emergency use this winter. </p><p>The coal plant shutdowns will include the decommissioning of 2-4 of the country's oldest units, maintenance at up to 13 units and suspensions of a further nine units, depending on the overall supply-demand balance in the power sector. </p><p class="bylines">By Jaslyn Ying</p></article>
