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Chinese jet fuel exports to rise significantly in September amid domestic COVID-19 travel restrictions

September 22/2021

MOSCOW (MRC) -- Chinese jet fuel exports are expected to exceed 1 million mt in September, a level not seen since April 2020 and well above the average monthly 663,000 mt exports over January-August, as the country's latest COVID-19 travel restrictions has severely impacted air travel to and from the southern province of Fujian, multiple industry sources told S&P Global Sept. 21.

This is the latest setback to the sustained recovery in the Asian jet fuel market amid rising COVID-19 infections in many countries in the region.

Given the surge in the number of COVID-19 cases in Fujian, Chinese authorities have imposed tighter travel restrictions out of Putian, Quanzhou, and Xiamen as of Sept. 14 to contain the virus spread.

The delta variant infections, which initially started at Nanjing and Guangzhou, has dragged the country's air passenger traffic lower since H2 July. Since then, local authorities have tightened preventive measures at two of the country's busiest air hubs, heavily reducing passenger flow. Air travel was expected to pick up in July and August during the school holidays, however, the spread of the delta variant since H2 July has delayed this recovery.

Commercial flights, on the other hand, have declined 50% in mid-August from mid-July, according to data from global flight tracker, Radar Box.

Prior to the latest set back in Fujian, flight flow had shown a robust comeback with the virus spread under control. During the first week of September, commercial flights had risen nearly 60% from the mid-August low, while Nanjing airport restarted operations Aug. 26.

The latest travel restrictions in Fujian may impact the 240,000 b/d Quanzhou refinery operated by state-owned Sinochem, sources told S&P Global.

"With domestic jet fuel demand in the province likely to be weighed (down) by the latest travel restrictions, the refinery may have to look to the export market to relieve some inventory pressure, especially with elevated run rates this month in response to the anticipated surge in jet fuel demand over the seven-day long (National Day) holidays in early October," a Singapore-based trader said Sept. 20.

A Sinochem source said the situation would force the company to concentrate on jet fuel exports from its Quanzhou refinery for the rest of 2021.

As MRC informed before, in December 2020, KBR announced that Sinochem Quanzhou Petrochemical Co. had successfully commissioned a new ethylene facility in Quanzhou, Fujian Province, China, utilizing KBR's SCORE (Selective Cracking Optimum Recovery) technology. The 1-million-t/y ethylene plant is part of Sinochem's grassroots integrated refining and petrochemical complex, which also includes a 400,000-t/y high-density polyethylene (HDPE) facility, which recently achieved on-spec production, as well as an 800,000-t/y paraxylene (PX) plant, a 350,000-t/y polypropylene (PP) unit and an aromatics extraction unit with 300,000 t/y of capacity.

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 1,396,960 tonnes in the first seven months of 2021, up by 7% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of statistical copolymers of propylene (PP random copolymers) subsided.
Author:Margaret Volkova
Tags:PP, PE, crude and gaz condensate, paraxylene (PX), propylene, HDPE, ethylene, medicine, petrochemistry, Sinochem, China.
Category:General News
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