China Aviation Oil (Singapore) is seeking an additional jet fuel cargo for delivery into South China as demand is set to increase in April and May on refinery maintenance and ahead of a trade show,traders said on Tuesday.
CAO late last month bought up to 1.4 million barrels of jet fuel for loading April to May from North Asia. It is now seeking an additional 26,000 to 27,000 tonnes (208,000 to 216,000barrels) for delivery into Huangpu over May 15-20, they said.
The tender closes on Tuesday and is valid until Wednesday.CAO is Asia's top jet fuel buyer and any additional spot
purchases by the company usually keeps the Asian jet fuel market well supported.
The company could be anticipating a surge in travel demand ahead of Asia's largest trade event - China Import and Export Fair - taking place in Guangzhou, south China from mid April to early May, a trader familiar with the Chinese market said.
Lower jet fuel output from Chinese refineries due to run cuts could also be creating tight supply in the domestic market,a second trader said.
"With the turnaround in various refineries, maybe Sinopec has a bit less from its system to supply Hong Kong, which means CAO has to buy a bit more," he said.
Refineries in China, the world's second-largest oil consumer, processed 9.04 million barrels per day (bpd) of crude
oil in March, down nearly 3 percent from a month ago to hit a five-month low, official data showed last week.
The decline comes as a string of refiners kicked off seasonal maintenance, after having run their plants hard since November to satisfy peak winter demand. A Reuters poll showed that top refineries had cut output to a 31-month low in March.