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Asia distillates-jet fuel cash differentials flip to premiums for the first time in 2021

May 24/2021

MOSCOW (MRC) -- Asia's cash differentials for jet fuel flipped into premiums for the first time this year in early May, partly supported by firmer deals in the physical market, while prompt-month spread for the aviation fuel stood at its narrowest contango in more than two months, reported Reuters.

The jet fuel market in Asia is getting support from recovering aviation demand in key markets including China and Australia, but any further upside would be capped in the near term due to COVID-19 lockdowns in India, trade sources said.

Indian opposition leader Rahul Gandhi called for a nationwide lockdown as the country's tally of coronavirus infections surged past 20 million. India's scheduled flight seat capacity dropped 6.5% in early May, according to aviation data firm OAG.

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 the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.


mrcplast.com
Author:Margaret Volkova
Tags:Asia, North America, PP, PE, crude and gaz condensate, PP block copolymer, homopolymer PP, propylene, LDPE, HDPE, ethylene, petrochemistry, PetroChina, Australia, India, China, Russia.
Category:General News
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