Singapore jet fuel imports for September arrival are slated to hit a multi-year high, shiptracking data from LSEG and Kpler showed, as China exports rise and lower output in Southeast Asia’s aviation hub forces refiners to buy more.
Kpler data shows imports are set to rise to 2.13 million barrels for September, the highest level since April 2020, and up from 345,000 barrels in August.
LSEG data shows imports climbing to 2.1 million barrels, a three-year high by its tally.
China jet fuel/kerosene exports to Singapore are set to hit a four-year high this month, according to Kpler, with the margins attractive relative to other refined fuels.
Key charterers shipping the cargoes include Petrochina International, Gunvor subsidiary Clearlake Shipping, Union International Trading and Sinopec, according to the data and a shipbroking source.
Gunvor declined to comment, while the other companies did not immediately respond to requests for comment.
The strong demand is being driven by a shortage of locally-produced jet fuel as several refineries have been on scheduled overhauls since mid-August, trade sources said.
The shortage may buoy regrade price spreads – the difference between jet fuel and gasoil paper swaps – trade sources said, though the availability of China-origin barrels may cap gains.
Regrade in September averaged a discount of 19 cents a barrel, narrowing from 46 cents in August, LSEG pricing data showed.
“Tank storage is ample in Singapore and Chinese jet/kero barrels need to clear,” said principal middle distillates analyst Kpler Zameer Yusof, adding that export margins for aviation fuel are the strongest among fuel products.
Part of Shell’s Bukom refinery site will remain shut until the second half of October, while a Singapore Refining Co (SRC) crude unit is due to restart soon, Reuters records show. REF/OUT
Some supply shortages from a local distributor also exacerbated market tightness, a Singapore-based trade source said.
Traders had mixed views on whether the demand trend would persist, however several analysts said they expected China to continue capitalising on export sales.
“Depending on economics/margins, it is likely that Chinese refiners will continue to push out jet-kero exports to Singapore, given ongoing refinery turnarounds in Singapore,” said LSEG Oil Research senior analyst Charles Ong.
The availability of Chinese export quotas was also driving sales, he said.
With output down, aviation fuel exports from Singapore are slated to slip for the fourth straight month, LSEG and Kpler data showed.
Source: Reuters (Reporting by Trixie Yap; Editing by Tony Munroe and Sonali Paul)