Amid the slump in global demand for petrochemical products triggered by the coronavirus outbreak, South Korean refiners are diversifying, according to industry sources Thursday.

SK Lubricants, an affiliate of domestic refiner SK Innovation, has introduced its new premium lubricant SK ZIC, as lubricant products are more profitable than general petrochemical products.

Last year, the company showed an operating profit rate of 9.8 percent, more than seven times higher than the 1.3 percent posted by SK Innovation’s oil-refining business.

Another domestic refiner, GS Caltex, witnessed operating margin of 8.3 percent for lubricants and 1.7 percent for oil. S-Oil recorded an operating margin of 14.5 percent for lubricants despite suffering an operating loss of 25.3 billion won ($19.1 million) in its refining division.

Domestic refiners’ lubricant business is expected to get extra traction as the price of high-sulfur fuel oil, the raw material for lubricants, has plummeted. Starting this year, the International Maritime Organization has lowered the sulfur cap for marine fuel to 0.5 percent from 3.5 percent.

Thanks to improved profitability buoyed by the greener regulation, Hyundai Oilbank said it would introduce its new lubricant brand, Hyundai XTeer Ultra, next month.

By Kim Byung-wook (kbw@heraldcorp.com)