MOSCOW (MRC) -- Asia's cash differentials for jet fuel inched higher, while refining margins for the aviation fuel climbed for a second consecutive session, buoyed by a steady increase in the number of scheduled flights in the region, said Reuters.
Cash discounts for jet fuel narrowed by 2 cents to 11 cents per barrel to Singapore quotes, the smallest discounts since Dec. 8. Refining margins, or cracks, for jet fuel rose 17 cents to $4.71 per barrel over Dubai crude during Asian trading hours on Thursday.
The cracks have gained 48% in the last month. The jet fuel market has been gradually improving in recent weeks after the COVID-19 pandemic brought air travel to a virtual halt this year, and market watchers believe passenger traffic would be steadily on the rise as vaccine roll-outs spur more international flights in 2021.
The Jan/Feb time spread for the aviation fuel in Singapore slimmed its contango structure by 2 cents on Thursday to trade at a discount of 22 cents per barrel, Refinitiv Eikon data showed.
As MRC informed earlier, Asia's refining margins for jet fuel dipped on Tuesday but remained within close sight of multi-month highs touched last week, supported by seasonal heating demand for kerosene and a slow but gradual recovery in regional aviation demand.
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