MOSCOW (MRC) -- Asian refining margins for jet fuel climbed for a third consecutive session on Tuesday, hitting a more than nine-month high, as aviation demand begins to find some support from increasing number of scheduled operating flights, said Hydrocarbonprocessing.
Refining margins, or cracks, for jet fuel gained 26 cents to USD5.09 per barrel over Dubai crude during Asian trade on Tuesday, a level not seen since March 13. After the COVID-19 pandemic brought air travel to a virtual halt this year, refining profits for the aviation fuel have surged to multi-month highs in all key trading hubs in December on hopes of higher demand in 2021.
Global jet fuel markets are coming back to life, resuscitated by a rebound in air cargo demand, gradually recovering passenger traffic and hopes that COVID-19 vaccines will spur more international flights next year. Scheduled flights operating globally were 43.5% lower in the week to Monday, an improvement from 46.1% a week earlier, according to aviation data firm OAG.
Flights in India were down 36.4% year-on-year in the week to Dec. 14, compared with a 38.3% drop in the preceding week, while flights in Australia were 45.5% lesser from the corresponding period last year, as against a 51% drop in the previous week. Cash discounts for jet fuel narrowed to 13 cents a barrel to Singapore quotes on Tuesday, compared with a discount of 27 cents per barrel on Monday.
As MRC informed earlier, Asian refining margins for 10 ppm gasoil rose on Friday, posting their seventh consecutive weekly gain, but the pace of demand recovery is expected to take a hit as several regional economies continue to battle COVID-19 infections.
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 PE and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,760,950 tonnes in the first ten months of 2020, up by 3% year on year. Only high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased. At the same time, PP shipments to the Russian market reached 978,870 tonnes in January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.
MRC