MOSCOW (MRC) -- Asian refining margins for jet fuel rose on 5 February, posting their biggest weekly gain in two months, while cash discounts for the aviation fuel narrowed amid limited supplies, reported Reuters.
The regional jet fuel market is expected to pick up further strength gradually as countries ease travel restrictions in coming months, although the usual seasonal boost during the Lunar New Year holidays would mostly remain dampened this year, trade sources said.
Refining margins, or cracks, for jet fuel rose to USD4.43 per barrel over Dubai crude during Asian trading hours, the strongest since Jan. 18. The cracks have gained 25.5% this week, the steepest weekly rise since Dec. 4. "Our forecast is for traffic to return to half of 2019 levels in 2021," Alexandre de Juniac, director general and chief executive of the International Air Transport Association (IATA) said in a statement this week. "But the proliferation of restrictions on travel that we have seen since the beginning of the year could make even that modest outlook very challenging," he added.
Global air passenger demand in 2020 was 65.9% lower than 2019 levels, while global air cargo demand last year was about 11% below 2019, IATA data showed on Wednesday. Some market watchers believe aviation passenger demand might see a surge soon after the majority of travel restrictions are lifted as a lot of people are bored of not travelling. Cash differentials for jet fuel were at a discount of 15 cents per barrel to Singapore quotes on Friday, compared with a 21-cent discount a day earlier.
ARA STOCKS - Gasoil stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub rose 3.4% to 2.7 million tonnes in the week to Feb. 2, data from Dutch consultancy Insights Global showed.
The data showed ARA jet fuel inventories climbed 3.8% to 937,000 tonnes.
Sri Lanka's Ceylon Petroleum Corp (Ceypetco) is seeking gasoil for delivery into Colombo over the eight months between May and December this year.
As MRC informed before, slumping fuel consumption during the pandemic is accelerating the long-term shift of refining capacity from North America and Europe to Asia, and from older, smaller refineries to modern, higher-capacity mega-refineries. The result is a wave of closures, often centering on refineries that only narrowly survived the previous closure wave in the years after the recession in 2008/09.
We remind that PetroChina has nearly doubled the amount of Russian crude being processed at its refinery in Dalian, the company's biggest, since January 2018, as a new supply agreement had come into effect. The Dalian Petrochemical Corp, located in the northeast port city of Dalian, was expected to process 13 million tonnes, or 260,000 bpd of Russian pipeline crude in 2018, up by about 85 to 90 percent from the previous year's level. Dalian has the capacity to process about 410,000 bpd of crude. The increase follows an agreement worked out between the Russian and Chinese governments under which Russia's top oil producer Rosneft was to supply 30 million tonnes of ESPO Blend crude to PetroChina in 2018, or about 600,000 bpd. That would have represented an increase of 50 percent over 2017 volumes.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020).
MRC