CHINA Aviation Oil (CAO), a unit of state-owned china National Aviation Fuel Group, is seeking to buy two cargoes of jet fuel for November delivery into Shanghai and Huangpu via tenders, reports Reuters.
CAO is seeking one 30,000-tonne cargo for delivery on November 7-11 to Shanghai and one 25,000 ton cargo for delivery on November 28-December 4 to Huangpu.
The tender closed at 3pm local time on October 28, with validity up to 8pm.
It has been years since CAO last imported jet fuel for China, one of the sources said.
CAO is the key supplier of imported jet fuel to China's civil aviation industry, according to the company's website.
This buying interest probably stemmed from tighter fuel export quota allowance for the fourth quarter, a second source said, adding that these cargoes could end up being used for the refuelling of international flights.
Beijing allocated around eight million tonnes of export quotas for refined fuels in its third batch of issuance late last month, lower compared with last year's third batch of 12 million tonnes.
Out of the eight million tonnes, around 1.53 million tonnes are allocated for the trade processing route, under which aviation fuel for the refuelling of international flights falls.
The purchase could also involve some 'arbitrage price play' as well, given that jet fuel export margins for China refiners remain better than gasoline or diesel, a third source said.
The spread between Asia and the US west coast prices remains economically feasible for sellers to trade on this route, Reuters calculations showed.
This slight spurt in demand will likely be supportive of Asian jet fuel prices and its cash market discussion levels, while attracting swing suppliers to direct their sale cargoes east instead of west in the near term, several trade sources said.
Spot premiums for the aviation fuel have shot up in recent weeks because of healthy demand and overall tighter supplies regionally given lower refinery output, with deals for cargoes loading in the first half of November done at premiums of 50 cents to $2 a barrel to Singapore quotes.
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CAO is seeking one 30,000-tonne cargo for delivery on November 7-11 to Shanghai and one 25,000 ton cargo for delivery on November 28-December 4 to Huangpu.
The tender closed at 3pm local time on October 28, with validity up to 8pm.
It has been years since CAO last imported jet fuel for China, one of the sources said.
CAO is the key supplier of imported jet fuel to China's civil aviation industry, according to the company's website.
This buying interest probably stemmed from tighter fuel export quota allowance for the fourth quarter, a second source said, adding that these cargoes could end up being used for the refuelling of international flights.
Beijing allocated around eight million tonnes of export quotas for refined fuels in its third batch of issuance late last month, lower compared with last year's third batch of 12 million tonnes.
Out of the eight million tonnes, around 1.53 million tonnes are allocated for the trade processing route, under which aviation fuel for the refuelling of international flights falls.
The purchase could also involve some 'arbitrage price play' as well, given that jet fuel export margins for China refiners remain better than gasoline or diesel, a third source said.
The spread between Asia and the US west coast prices remains economically feasible for sellers to trade on this route, Reuters calculations showed.
This slight spurt in demand will likely be supportive of Asian jet fuel prices and its cash market discussion levels, while attracting swing suppliers to direct their sale cargoes east instead of west in the near term, several trade sources said.
Spot premiums for the aviation fuel have shot up in recent weeks because of healthy demand and overall tighter supplies regionally given lower refinery output, with deals for cargoes loading in the first half of November done at premiums of 50 cents to $2 a barrel to Singapore quotes.
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