SINGAPORE (Reuters) - China’s aviation fuel sales slumped by a quarter at the end of January as domestic and international air traffic shrank amid the ongoing coronavirus epidemic, a senior oil industry source said on Wednesday, adding first-quarter sales could be halved.
Between Jan. 24 and Jan. 31, aviation fuel sales in the world’s second-largest consumer fell nearly 25% from a year earlier to 555,000 tonnes, the Beijing-based source with direct knowledge of the matter said. The number of flights seeking refueling dropped by a similar margin to 84,000 during the same week.
Jet fuel sales - for domestic and international flights - were 3.07 million tonnes in January, 0.2% lower than the same month last year, said the source, who declined to be named because he’s not authorized to speak to the media.
A spokesman for China National Aviation Fuel Company, the country’s near monopoly jet fuel distributor, said he was not in a position to comment immediately.
The source said the drop in demand will be much bigger in February because of steeper cuts in flights, likely bringing first-quarter jet fuel consumption down by half compared to the same period a year earlier.
The suspension of flights to China by global airlines resulted in Asian refining margins for jet fuel in January showing their biggest monthly decline in a more than a decade.
Refining margins, or cracks, for jet fuel narrowed by 34% in January, their steepest monthly drop according to data going back to as far as April 2009, Refinitiv Eikon showed.
China’s civil aviation authority has urged Chinese carriers to continue flying international routes as they consider cuts in response to a drop in demand.
The oil industry source said China’s total jet fuel consumption had already grown at the slowest pace on record in 2019, at 6.2% to around 35 million tonnes.
Clipperdata, an energy data provider, said on Monday that the drop in global jet fuel in transit - a rough proxy for demand for the fuel - was accelerating, with the seven-day moving average falling to a new low through the end of January at 28 million barrels.
Reporting by Chen Aizhu; additional reporting by Roslan Khasawneh and Koustav Samanta; Editing by Tom Hogue and Kenneth Maxwell