SINGAPORE, April 25 (Reuters) - China Aviation Oil (Singapore) Corp. Ltd. (CAO) has bought by tender the full volume of 385,000 tonnes of jet fuel for May-June, but the amount lagged the peak import levels seen last year, traders said on Wednesday.
The tender intake was on top of earlier purchases of 295,000 tonnes for May. But the combined volume of 680,000 tonnes, or 89,000 barrels per day (bpd) for the May-June period, would be 23 percent lower than the 874,000 tonnes or 115,000 bpd bought last year.
The volumes are also less than the 94,000 bpd bought for February, the highest so far this year.
"Consumption is still robust in China. It is the higher domestic supply that has curbed import levels," another trader said.
The latest cargoes fetched slightly above $2 a barrel premium to Singapore quotes on a cost-and-freight basis, as opposed to premiums of close to $2 done in the past tender.
The prices were just 10-20 cents a barrel higher than the last tender despite tighter regional supplies caused by heavy refinery maintenance.
"It's quite disappointing to sellers considering the peak maintenance period. There are not much supplies around, yet the premiums are not reflective of fundamentals," said a trader.
Pricing interests in the Singapore oil hub could have limited the increase in premiums. "Asian prices are being depressed in the cash window, probably for pricing reasons with players desiring to keep the product in deep contangoed levels," a trader said.
Jet fuel imports make up a third of total aviation fuel demand in China, the world's second-biggest energy user.
CAO <CNAO.SI> supplies 95 percent of the jet fuel imports while the remaining 5 percent is sourced by South China directly via the import agent role of trading firm Zhuhai Zhenrong, traders say.
Last year, CAO bought on average 385,000 tonnes of jet fuel a month, up from 260,000 tonnes a month in 2005. But imports slowed in 2007 because of new refining capacity onstream such as the start-up of the 160,000-bpd Hainan refinery last September. ((Reporting by Felicia Loo, editing by Ramthan Hussain; felicia.loo.reuters.com@reuters.net felicia.loo@reuters.com, +65 6870 3497))
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