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South Korean bunker players are targeting overseas business as many of their customers at home struggle in the current economic climate, IHS Fairplay reports.

The news comes during a period in which Korean shipping lines have been among the hardest hit in the downturn, and a number of the major South Korean players are struggling with cash flow or are already in receivership or under bankruptcy protection.

Hanjin Shipping, South Korea's largest and one of the world's top ten container carriers in terms of capacity, has significant ongoing debt issues. As of March 31 2016, Hanjin had a working capital deficit of 2.85 trillion won and long-term debt of 2.39 trillion won, and shareholders' equity of 733.3 billion won.

Hanjin has plans to raise $400 million by selling off a number of assets, including container terminals, its office in London and bulk carriers. The company has already sold off its remaining stakes in H-Line Shipping and has recently started negotiations with shipowners for lower charter rates.

Meanwhile, Chang Myung Shipping, the bulk carrier owner, is under court protection after five consecutive years of losses. The company has around one billion dollars of debt and recently had to cancel orders due to the shipowners financial difficulties.

Samsun Logix, the ship owner/operator moving bulk cargoes in and out of South Korea, is in protracted negotiations with its creditors whilst S W Shipping, the dry bulk shipping company declared bankruptcy in late 2015 and Daebo International Shipping has filed for Chapter 15 protection in the USA. All have been advised by the South Korean Government that they need to quickly settle their negotiations.

As a result, South Korean bunker players are actively targeting more stable overseas business and reduced risk. IHS Fairplay reports that a number of international bunker trading houses have been receiving an increased number of enquiries from South Korean bunker traders following the recent acquisition of KTB Oil Corp by Denmark's Bunker Holding AS - the owner of A/S Dan-Bunkering, KPI Bridge Oil - at the start of this month.

A source from Integr8, the bunker trading and brokerage services arm of Navig8 with offices in several locations around the world, told Fairplay that the company has received trading enquiries from South Korean bunker traders. "They are hoping that we can buy fuel from them if our clients need to refuel in South Korea. Likewise, they could also buy fuel from us if their clients need to be bunkered elsewhere in the world," the source said.

South Korea's marine fuels are produced by the country's four refining companies: Hyundai Oilbank, S-Oil, GS Caltex, and SK Innovation. Historically these companies have tended to deal direct with the major South Korean ship operators, but that may now be changing.

"The refining companies want to manage their risks so they'd rather deal with bunker traders if they were to sell to small ship operators," one South Korean bunker source told IHS Fairplay.

One South Korean bunker trading firm, Panoco Korea, is reported to have stopped dealing with struggling South Korean clients. "We've had customers who paid late and we don't want to take risks," a company source was quoted as saying.