The Asian jet fuel/kerosene complex soared as the front-month market structure jumped 165.31% on the week to a nine-month high at the Asian close Oct. 28, driven by increased buying activity and a slash in exports from China.
Platts assessed the front-month November-December time spread for FOB Singapore jet fuel/kerosene swaps -- an indicator of market sentiment -- at $1.30/b at the Asian close Oct. 28, rising more than twofold week on week from plus 49 cents/b Oct. 21.
The spread was last stronger at $1.32/b on Jan. 31, S&P Global Commodity Insights data showed.
Tracking the strength, Platts assessed the cash differential for jet fuel/kerosene cargoes loading from Singapore against the Mean of Platts Singapore jet fuel/kerosene assessment at plus $1.32/b on Oct. 28, marking a nine-month high.
The cash differential was last seen higher at $1.35/b on Jan. 23, the data showed.
China -- Asia's largest exporter of jet fuel/kerosene -- is expected to not only slash outflows of the product in November, but also increase its imports during the month, leaving market participants wary about tightness in the regional market.
Industry sources based in Singapore and China expected Chinese oil companies to cut their jet fuel exports to around 1 million mt in November from about 1.7 million mt in October on tight export quota availability.
“One million mt is seen as very small volume,” a regional middle distillate trader said, adding that market participants projected November export volumes to be around 1.5 million-1.7 million mt.
Trade sources also observed an uptick in buying of jet fuel cargoes for delivery to China, noting that the volume may hit a high in November.
Recently, China Aviation Oil sought 30,000 mt of jet fuel for delivery over Nov. 7-11 CFR Shanghai, and 25,000 mt delivery over Nov. 28-Dec. 4 CFR Huangpu, Guangzhou, market sources said.
The tender was heard to have already closed, according to market participants. However, award details were not immediately available.
The company’s spot tender reflects short supply of jet fuel, as import tenders from the company are “very rare," according to a Singapore-based middle distillate trader.
Fueling the strength, South Korea’s jet fuel/kerosene exports were down on the month in November amid lower run rates among some domestic refiners, according to a North Asian trader, though high global stocks and expected arrivals could exert downward pressure on prices in the near term.
“Global stock is still high, including Europe, but Europe might be short starting November because most barrels are now heading east,” the source said. “I think [jet fuel prices] will still remain at a premium if the Korean refinery run cuts continue, but not as strong as now.”
Japanese domestic kerosene demand was dampened by warm weather, sources said. Temperatures are expected to remain higher than usual over Oct. 26-Nov. 25 with a probability of 50%-70%, the most recent Japan Meteorological Agency forecast showed.
North Asian sources have said that the Japanese spot market was not performing well, with refiners and traders currently adopting a wait-and-see approach.
“Japanese refiners are still buying, though uncertain if such buying appetite will be sustained,” a Singapore-based market participant said.
Still, demand for kerosene may continue to climb as the winter season in Japan is expected to last from December until February, North Asian sources said.
The Platts-assessed front quarter 2025 first quarter regrade swap – the spread that measures the value of jet fuel over 10 ppm sulfur gasoil – surged 108% on the day to plus 50 cents/b Oct. 28 to touch a multiyear high.
The front-quarter regrade was last assessed at higher at plus 55 cents/b on Jan. 10, 2019, Commodity Insights data showed.
Platts is part of Commodity Insights.
