Petrochemical and Lubricant Industry Remains Strong
Refining Margin Expected to Rebound in Q3
S-Oil announced on the 26th that it recorded sales of 9.5708 trillion KRW and an operating profit of 160.6 billion KRW in the second quarter of this year. Compared to the previous year, sales increased by 22.4% and operating profit rose by 341.2%.
Regarding the second quarter performance, S-Oil explained, "Sales were affected by the increase in the KRW-denominated selling price due to the rise in exchange rates," and "Despite losses in the refining sector caused by a decline in refining margins, profits in the petrochemical and lubricants sectors were strong." Operating profits for the petrochemical and lubricants sectors were 109.9 billion KRW and 145.8 billion KRW, respectively.
The refining sector posted a loss of 95 billion KRW in the second quarter this year. S-Oil stated, "Refining margins in the Asia region weakened due to sluggish gasoline demand centered in the U.S. and restrictions on diesel exports to Europe caused by rising maritime freight costs," and "Dubai crude oil prices peaked in April but declined due to poor economic indicators in major countries, although geopolitical instability persisted."
S-Oil expects the refining sector's performance to rebound in the third quarter, driven by demand for transportation fuels during the summer peak season. The company said, "Gasoline spreads are expected to rise with the arrival of the Northern Hemisphere driving season," and "Jet fuel and diesel spreads are likely to be supported by summer travel demand coinciding with air travel demand exceeding pre-pandemic levels."
Regarding the Shahin project underway in Ulsan with a budget of 9 trillion KRW, S-Oil stated, "The project is progressing smoothly with the goal of mechanical completion in the first half of 2026," adding, "Site preparation work has reached 94.9% completion, and EPC (Engineering, Procurement, and Construction) is 30.9% complete."
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