The latest economic data augurs well for a rebound.
Some 170 million Chinese holidayed abroad in 2019, before the pandemic struck. That figure sank to less than 9 million last year at the height of China’s lockdowns.
"Mainland China’s domestic jet fuel demand has almost fully recovered, while international jet fuel demand has recovered to close to 70% of pre-Covid levels,” said Fenglei Shi, a director covering Chinese oil markets at S&P Global Commodity Insights. As such, it’s possible that Golden Week could mark a near-complete recovery in China’s total consumption of the fuel, she said.
If Golden Week delivers a big boost to air travel, it will signal that demand is back on track and support some of the more bullish views on prices. But too few passengers will be further evidence of a relatively muted Chinese reopening that has disappointed commodities markets craving a return to normality in their biggest buyer.
Jet fuel will be the biggest component of China’s demand recovery this year because"it was a laggard and it was the one that has not caught up,” said Macquarie Group strategist Vikas Dwivedi, although he cautioned that Chinese consumption could end up being"good enough but not great.”
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