Arbitrage Asia Cargoes Lift Europe Jet Fuel Imports to Nine-Month High

Volumes of jet fuel imported into Europe in July are set to hit their highest levels in nearly nine months, swelled by cargoes from Asia and India, and amid a fall in outright prices from seven-month highs.

Some 2.4 million metric tons on 39 tankers is so far tracked arriving this month, according to the OPIS Tanker Tracker. If confirmed, that's the most seen since September last year when nearly 2.6 million tons was shipped to the 28 member countries, data from Eurostat, the European statistics agency, shows.

Imports of jet fuel typically rise in the summer holiday season, with some 2.3 million tons imported in July last year, according to Eurostat.

This year, arbitrage shipments from South Korea and India appear to be swelling this month's tally. There are four cargoes totaling 355,000 tons scheduled to arrive this month from South Korea, information from brokers, traders and satellite tracking data shows. Another 245,000 tons on four tankers is also coming from India.

The arbitrage to buy jet fuel in South Korea for shipment and sale in Europe at a profit appeared to open briefly towards the end of June, OPIS calculations show. Traders could make as much as $6.00 per ton based on forward prices in Europe and the South Korea spot price plus freight cost around June 24.

Volumes from Saudi Arabia, the second-largest supplier after the UAE, are at 625,000 tons this month. UAE volumes arriving in July are so far identified at 300,000 tons.

Some 2.2 million tons was tracked arriving in Europe over June, which compares to average monthly imports of 1.8 million tons in 2015, according to Eurostat data.

Northwest Europe jet fuel cargo prices have slumped 9% from a seven-month high reached on June 8, according to OPIS calculations. Yesterday's price of $445 per ton is the lowest since May 12.

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