Kpler’s Post

China's Aviation Industry Sees Slowed Recovery Post-Summer Recent data indicates a concerning trend in the Chinese aviation sector. Despite an increase in airline seat capacity, demand has fallen below pre-pandemic levels since September, particularly in long-haul international flights, which significantly impact jet fuel consumption. Key Points: ◾ Shift towards shorter domestic flights, now 93% of total traffic, contrasts with pre-pandemic trends. ◾ Chinese refiners, facing high #diesel inventories and narrow East-West arbitrage windows, are increasingly focusing on #jetfuel exports, now comprising 38% of all Chinese CPP exports, up from 31% last year, marking a significant trend shift. ◾ Chinese refiners have used 93% of their annual oil product export quotas, with approximately 2Mt remaining. They're expected to focus on jet fuel exports, as current market conditions don't favour exporting winterized ULSD to Northwest Europe. This shift poses challenges for refiners and alters global #fuel consumption patterns. With jet fuel exports now a strategic focus, Chinese refiners are adapting to these market dynamics. Professionals in the aviation and energy sectors should monitor these developments closely. #kpler #China #EnergyMarket #GlobalEconomy