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A Rise in Chinese Air Traffic Has Little Impact on Asian Jet Kerosene Prices
A Rise in Chinese Air Traffic Has Little Impact on Asian Jet Kerosene Prices

A Rise in Chinese Air Traffic Has Little Impact on Asian Jet Kerosene Prices

  • 24-Mar-2023 7:21 PM
  • Journalist: Jung Hoon

The Asian Jet Kerosene market continued to be plagued by large inventories and sluggish demand in the face of rising inflationary and macroeconomic worries during this month. The Asian Jet Kerosene market has not been significantly helped by China's expanded borders and restrictions-free international movement.

The decline is mostly attributable to an oversupplied Asian Jet Kerosene market brought on by unfavorable arbitrage economics because local refiners increased production levels. Although the Aviation industry has had a difficult time recovering, the Asian Jet Kerosene market made a spectacular return since the pandemic's peak, when planes were largely grounded. Oil prices have increased sharply, which has raised concerns about inflation and issues with airport staffing and logistical supply chains.

The Jet Kerosene market has a strong bearish sentiment due to the recent sharp drop in international crude oil, and the market mixing cost has fallen, aided by poor terminal demand in the Asian market. The current scenario of the Jet Kerosene market is still in a downward trend since the market transactions are light in Asia.

The Chinese market has approved to increase in the number of international flights; however, the weak ticket sales are way lower than anticipated owing to the salary deduction and rising unemployment rates in China. It takes time to recruit and qualify pilots to fly, making it difficult to raise the demand for Jet Kerosene in a short period of time. As a result, all these factors are driving down the pace of the downstream Aviation sector in China.

According to ChemAnalyst, travelers struggle with rising inflation and a faltering economy, so Asia's Jet Kerosene demand in 2023 will stay about 20% below pre-COVID levels, as opposed to a global average of 15% below 2019 levels. The price is expected to improve on a monthly basis in Asia, but the price hike would be suppressed by the demand level, which is lower than the usual peak summer demand.

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