Tech News, Magazine & Review WordPress Theme 2017
  • Home
  • Supply Chain Updates
  • Global News
  • Contact Us
  • Home
  • Supply Chain Updates
  • Global News
  • Contact Us
No Result
View All Result
No Result
View All Result
Home Supply Chain Updates

Commodities 2021: US jet demand, supply chain challenges lay ahead in 2021

usscmc by usscmc
December 31, 2020
FEATURE: US jet demand, supply chain challenges lay ahead in 2021
Share on FacebookShare on Twitter

Highlights

Atlantic Coast’s new supply chain in the balance

Global industry recovery expected in 2024: IATA

CORSIA pilot phase to launch in 2021


New York —
The US jet fuel market will be forced to evaluate their 2020 pandemic-induced supply chains in the new year as airlines and refiners grapple with bruised passenger confidence and sustainability commitments.

Not registered?


Receive daily email alerts, subscriber notes & personalize your experience.


Register Now

While S&P Global Analytics expects global jet fuel demand to “rebound sharply” in 2021 by 1.5 million b/d, this growth would only represent half of the losses experienced in 2020 as the coronavirus ravaged air travel demand, and by extension, jet fuel consumption and altered pricing dynamics.

In the US, demand destruction was most pronounced at the end of the first quarter, with passenger throughput at airports down by a staggering 94.89% between March and April, according to data from the Transportation Security Administration. Passenger volumes fell by as much as 300,000 individuals per day during this period—sinking to just 87,534 passengers— following the implementation of sweeping travel restrictions to and from the US.

Additional coverage


Commodities 2021:
Market trends to watch in oil, natural gas, petrochemicals and other commodities


Video:
Five commodity themes for 2021


Commodity markets in 2020:
A year in nine infographics


With consumer confidence decimated and routes slashed, airlines’ monthly consumption of jet fuel plummeted, falling 62% on the month in April to 11 million barrels, according to data from the Bureau of Transportation Statistics. This marked a 70% decline from the same period in 2019 and the weakest consumption since the BTS began collecting data in 2000.

Even as they scrambled to minimize jet production, refiners’ reduction of output to all-time lows failed to outpace the nosedive seen for jet fuel demand and arbitrage economics discouraged refiners on the Gulf Coast from sending jet up Colonial Pipeline to end users along the East Coast.


Foreign imports to New York Harbor double

The industry’s reaction to these unfavorable arbitrage economics will present the jet community with fresh challenges in 2021, with the retraction of these cobbled supply chains dependent on the degree to which fuel demand recovers.

While the fallout from the coronavirus upended dynamics for the jet fuel market in all regions of the US, the Atlantic Coast’s inability to supply itself with sufficient volumes of fuel rendered it particularly susceptible to supply chain alterations and price volatility.

One of the clearest indicators of volatility for the region has been the dislocated relationship between prices for jet fuel barrels taken off Colonial Pipeline and New York jet fuel for Buckeye Pipeline.

Of the 250 assessments Platts published for offlines and Buckeye differentials in 2019, the former never held a premium to the latter, instead maintaining a discount of 25 points for 201 sessions—or 80.4%–of the year.

In 2020, however, the market has seen exceptional volatility in the spread, with offlines barrels carrying a premium to Buckeye for much of the year, driven by unfavorable arbitrage economics and strong demand for unrestricted barrels.


With New York at one point the epicenter of the global coronavirus pandemic, demand in New York Harbor plummeted, rendering Line 3 barrels destined for Buckeye less attractive than unrestricted barrels that could have been directed to stronger demand centers along the mid-Atlantic.

With this shift, supply chains for the Northeast were re-imagined as imports to New York Harbor nearly doubled on the year. As of mid-December, 25 vessels had discharged a total of 6.65 million barrels of jet, according to US customs data. India was the top country of origin, accounting for one million barrels, followed by Qatar and South Korea.

Customs data indicates 16 vessels discharged a total of 3.42 million barrels of jet in the region in 2019, with Canada, South Korea and Japan the top countries of origin.

Stronger jet imports to New York Harbor could be challenged in 2021 if arbitrage economics incentivize the shipment of fuel up the Colonial Pipeline. Such a change, however, would be heavily dependent on air travel demand and passenger confidence.

The International Air Transport Association estimates that the global industry will not see a full recovery until 2024.

Industrywide sustainability commitments to materialize in 2021

Despite the fact that the coronavirus has dealt an unprecedented blow to the aviation industry, airlines have reiterated their commitments to sustainability throughout the fallout, suggesting green shoots—and green fuels—are on the horizon in 2021.

A key component of airlines’ sustainability toolboxes is sustainable aviation fuel, carbon-based jet fuel’s green counterpart that can be “dropped in” to existing infrastructure to reduce aircraft emissions.

According to cost-based calculations launched by Platts on Sept. 21, US West Coast SAF is approximately 3.1 times more expensive than Los Angeles jet fuel, highlighting limited production as one of the key hurdles in widespread adoption of the fuel.

SAF will play a key role in the Carbon Offsetting and Reduction Scheme for International Aviation, whose voluntary pilot phase commences in 2021. Under this program, monitored by the United Nations International Civil Aviation Organization, the global aviation industry aims to half its 2005 emissions by 2050.

Under CORSIA, the airline industry was the world’s first industry to agree to a market-based measure to tackle its carbon footprint.

While the US jet fuel market faces demand and supply chain challenges in 2021, progress on decarbonization is likely to showcase how adaptable and innovative this industry is.

usscmc

usscmc

No Result
View All Result

Recent Posts

  • US Ports: Gateways to Global Trade
  • Ports of Prosperity: How US Ports Rule the Global Trade Game
  • Sustainable Supply Chain Practices in the US
  • Challenges Facing the American Trucking Industry
  • The American Warehouse Revolution: The Role of Automation in US Warehouses

Recent Comments

  • Top 5 Supply Chain Certifications that are in high demand | Top 5 Certifications on Top 5 Globally Recognized Supply Chain Certifications
  • 3 Best Procurement Certifications that are most valuable | Procurement Newz on Top 5 Globally Recognized Supply Chain Certifications

Archives

  • September 2023
  • August 2023
  • July 2023
  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • September 2019

Categories

  • Global News
  • Supply Chain Updates

Meta

  • Log in
  • Entries feed
  • Comments feed
  • WordPress.org

slot gacor slot slot gacor 2023 slot 2023 slot gacor terbaru slot gacor terpercaya slot gacor slot gacor slot slot gacor 2023 slot 2023 slot gacor terbaru slot gacor terpercaya slot gacor slot gacor slot slot gacor 2023 slot 2023 slot gacor terbaru slot gacor terpercaya slot gacor

Pages

  • Home
  • Terms of Use
  • Privacy Policy
  • Disclaimer
  • Antispam
  • Contact Us

Categories

  • Global News
  • Supply Chain Updates
slot gacor slot slot gacor 2023 slot 2023 slot gacor terbaru slot gacor terpercaya slot gacor slot gacor slot slot gacor 2023 slot 2023 slot gacor terbaru slot gacor terpercaya slot gacor slot gacor slot slot gacor 2023 slot 2023 slot gacor terbaru slot gacor terpercaya slot gacor

Tags

APICS E-commerce Boom and Its Disruptive Impact on US Logistics ecommerce Globally Recognized Supply Chain Certifications IIPMR Certifications International Institute for Procurement and Market Research (IIPMR) ISM logistics Next Level Purchasing procurement Supply Chain Supply Chain Industry supply chain industry in usa The changing landscape of Supply Chain Industry and how companies need to ride the tide Top 5 Supply Chain Certifications top supply chain certifications USA US Ports and Their Role in Global Trade US Supply Chain Industry warehousing

Trending

US Ports: Gateways to Global Trade

  • Antispam
  • Contact Us
  • Disclaimer
  • Home
  • Privacy Policy
  • Terms of Use

© 2023 www.usscmc.com

No Result
View All Result
  • Home
  • Supply Chain Updates
  • Global News
  • Contact Us

© 2023 www.usscmc.com

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Cookie settingsACCEPT
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled

Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.

Non-necessary

Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.

SAVE & ACCEPT