Kaohoon Morning Brief – 20 May 2022

1) Explosion at S.Korea 3rd Largest Refinery

Explosion occurred at S-Oil Corp’s Onsan refinery in Ulsan, South Korea, late Thursday night, according to the local media Yonhap news.

S-Oil is the third-largest refiner in South Korea and sixth in the world, according to the data in 2021 from Statista. The major shareholder of the firm is Saudi Aramco, Saudi Arabian public petroleum and natural gas company.

According to Refinitiv, Aramco Overseas Company B.V. holds the majority stake in S-Oil Corp at 63.4%.

There are no announcement for an operating halt at the facility as of now, but if there is, it could make gross refining margin higher.


2) BofA expects four consecutive 25bp rate hikes by BoE

Bank of America expected inflation in the UK to keep on hiking even if the economy plays with recession. The bank saw four more consecutive 25bp rate hikes by the Bank of England with high risk rate setters choosing to hike 50bp in August.

Average home and imported food output prices are expected to rise 19.0% YoY by August. Meanwhile, food inflation is expected to reach 10.2% in July.


3) China’s PBOC cuts 5-year benchmark lending rate

China’s central bank cuts the banks’ 5-year Loan Prime Rate LPR by 15 bps for the first time since January. 5-year LPR was cut from 4.60% to 4.45% in a move that could help lower financing costs for struggling businesses. Meanwhile, 1-year LPR was unchanged at 3.7%.