Global air cargo demand rose 8.3% on the year in November, the fastest year-on-year pace since December 2021, the International Air Transport Association said on January 9, indicating strengthening jet fuel demand post the pandemic, Ednews informs citing S&P Global Commodity Insights.
The growth was driven by routes covering the Middle East and Asia, the IATA said. While the year-on-year increase was calculated off a low base in November 2022, the growth in demand, measured in cargo tonne-kilometers, showed a fourth straight month of improvement.
November's air cargo tonne-kilometers were currently hovering at just 2.5% below pre-pandemic levels.
Although cargo freight generally contributes a smaller amount to total jet fuel demand than passenger flights, industry analysts closely monitor the segment as it remains an important forward indicator of the health of the global economy, with the data showing a deceleration in economic slowdown.
Jet fuel demand is expected to remain on a recovery path in 2024, however, the pace of growth is expected to slow from the highs seen over the past two years. S&P Global Commodity Insights analysts said in a Global Oil Products Scorecard report on January 5 that Asia's jet fuel/kerosene demand growth for 2024 will ease to 264,000 b/d, and to 212,000 b/d in 2025, as travel recovery post the pandemic normalizes.
"Demand in 2025 is set to return to 96% of 2019 levels in the region," the analysts said.
At the Asian close January 10, the cash differential for jet fuel/kerosene cargoes for loading from Singapore snapped four straight sessions of gains, falling 40 cents/b on the day to plus $1.57/b to Mean of Platts jet fuel/kerosene assessment, S&P Global data showed.
"Japan buying [has] been slowing down a bit. Indonesia has turnarounds so [they have been] buying a bit," a regional trader said, referring to buy tenders issued by Pertamina since early January. "Overall [the jet fuel/kerosene market] is okay, but loaders are end-January focused." International air cargo demand gained 8.1% on the year and expanded across all major trade lanes, the IATA said. The international cargo segment comprises nearly 87% of the air cargo market. The Middle East-Europe trade lane led the growth among all major trade lanes with a 23.5% year-on-year rise in November, the fourth consecutive increase in international cargo tonne-kilometers.
Asia-related trade lanes were also robust in November, with the Africa-Asia market seeing the highest annual growth of 13%. This was followed by the Middle East-Asia and Europe-Asia markets, respectively growing by 12% and 8.7% during the month.
