The price of jet kerosene is continuing to move sharply lower in line with weaker crude, amid mounting concerns about the impact of the coronavirus on global economic growth.

A tonne of jet kerosene for barge delivery to Rotterdam on 25 February was assessed at $501.75 per tonne, according to energy data provider ICIS – a reduction of $29.25 over one week. At the start of the year, the same delivery of jet kerosene would have been priced at around $660 per tonne.

“European jet kerosene spot market continues to bear the brunt of coronavirus outbreak as flight cancellations are not only seeing reduced consumption rates but also inducing length in the market,” notes ICIS, which is a corporate sibling of Cirium’s, within RELX.

“While prices have continued downwards trajectory, staying at two-year lows, amid limited buying interest seen, additional supplies from East are likely to hit the region providing further downside.”

Similar downward pressure is being seen in US markets. Kerosene prices for barge delivery to New York harbour have declined to 153-153.25 US cents per gallon from 171.50-171.75 four weeks ago.

ICIS says the spread of coronavirus is the largest factor influencing crude prices in the near term. Prices are continuing to decline as the outbreak’s impact is increasingly felt outside China.

Asia is currently well-supplied with product because of the shutdown of economic activity in China, from which it is likely that an additional 2 million tonnes of jet kerosene will be routed west, one major airline has told ICIS, as higher prices in Europe have opened a fuel arbitrage.

Jet-fuel buyers in Asia have stepped into the market in recent days, tempted by low prices, but this has not prevented prices from declining further. Barge deliveries of jet fuel to Singapore are assessed in the range of $62.72-63.12 per barrel, a reduction of $1.28 over a week, and down from $66.78-67.18 per barrel four weeks ago.

At the start of 2020, they were assessed at over $80 per barrel. “With winter drawing to a close, no further support is expected from the heating kerosene market. Refinery run cuts and Q2 shutdown maintenance are expected to limit oversupply,” says ICIS.