<p style="text-align: center;"><img title="1611903262324416.jpg" alt="9.jpg" src="/ueditor/php/upload/image/20210129/1611903262324416.jpg"/></p><p>&nbsp;SK Innovation&nbsp;Co Ltd, the owner of South Korea&#39;s top refiner SK Energy, said on Friday refining margins are expected to gradually recover this year on a pick-up in fuel demand as the impact of COVID-19 eases.</p><p><br/></p><p>The company, which has been battered by weak margins during the global pandemic, posted an operating loss of 243 billion won ($218 million) in the October-December quarter.<br/><br/>It was the fourth straight quarterly operating loss, and compared with an operating profit of 88 billion won for the year-ago period.<br/><br/>SK Innovation, which has a total refining capacity of 1.115 million barrels per day (bpd) at plants in Ulsan and Incheon, said it operated it facilities at 61% of capacity on average in the quarter, down from 79% a year earlier.<br/><br/>It flagged in October that the CDU utilisation rate would fall in the fourth quarter from the third quarter&#39;s 72%.<br/><br/>The rate will be held at about 60-70% during the current quarter, a company official told Reuters.<br/><br/>Capital spending for 2021 was expected at about 4-4.5 trillion won this year, similar to last year&#39;s level, the company said.<br/><br/>About 70% of the funds have been earmarked for its small but growing battery and material related businesses. The battery business accounted for only about 6.5% of SK Innovation&#39;s total revenue during the quarter. The company said the business aims to turn a profit in 2022.<br/><br/>SK Innovation supplies electric car batteries to&nbsp;Volkswagen&nbsp;and&nbsp;Ford Motor Co&nbsp;among others, and said on Friday it plans to invest 1.3 trillion won at its battery unit in Hungary to build a third battery plant.<br/><br/>Construction will start in third quarter, with first production targetted for early 2024, it said in a regulatory filing.<br/><br/>Shares of SK Innovation were up 5.2% as of 0248 GMT, against the broader market KOSPI&#39;s 0.8% fall.</p>