Easing Covid Restrictions to Brace Jet Kerosene Prices in China
Easing Covid Restrictions to Brace Jet Kerosene Prices in China

Easing Covid Restrictions to Brace Jet Kerosene Prices in China

  • 04-Jan-2023 3:28 PM
  • Journalist: Yage Kwon

Beijing (China): Jet Kerosene prices in China kept on falling throughout December 2022 owing to the rising travel restriction imposed by multiple countries caused by the new hike of Covid-19 cases in China. According to the data from the National Bureau of Statistics on 26th December, China's jet fuel output reached a 13-month high in November at 3 million mt (790,000 b/d), up 33% year-over-year and 23 percent from October. This High output level along with the limited performance of the downstream aviation sector has been driving the Chinese Jet Kerosene price downwards. Commodities like LPG, Naphtha, and Jet Kerosene in China witnessed a high output rate during December while the poor performance from the downstream petrochemical industry led to a consistent fall in its prices in the domestic market.

According to the sources, China's production of Jet Kerosene is anticipated to increase to meet potential demand growth from both domestic and international flights as Beijing decided to eliminate quarantine measures for foreign arrival, effective January 8, 2023, in response to the goals set for a domestic aviation recovery. However, given it takes time to restart the aviation sector with mounting new infections, analysts warned, the increase in demand for Jet Kerosene is likely to be limited until late January, as other countries are considering imposing restriction on travel from China. In an announcement on 26th December, the National Health Commission downgraded COVID-19 from the top tier of infectious diseases to the second tier, with 12 measures to gradually relax pandemic safeguards beginning January 8, 2023.

One of the sources stated that "All of these will contribute to the increased trend in Jet Kerosene demand, which calls for an increase in Jet Kerosene supply. However, because of the spike in COVID cases, which are capping the number of travelers and pilots, and captain crews who are healthy and qualified to serve. We do not anticipate a notable comeback until late January, around the Lunar New Year. Domestic flights will drive the recovery of Jet Kerosene demand in the first half of 2023 as international travelers initially may be cautious of China's border policy and concerned about the country's high infection rate.”

According to ChemAnalyst, the prices of Jet Kerosene in China are expected to rebound during the first weeks of January and witness higher price hikes after the festive season during late January as a reflection of the performance of the downstream aviation industry.

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