Huan Qiu Wang·2026-01-09 07:41Core Viewpoint - The restructuring of China Petroleum & Chemical Corporation (Sinopec) and China Aviation Oil Group (CAOG) marks a significant event in the central enterprise's professional integration, potentially reshaping the 200 billion yuan aviation fuel market and impacting the trillion-level energy and chemical market [1] Group 1: Market Context - China's refined oil consumption is facing a historic turning point, with a projected decline due to the rapid growth of the electric vehicle industry and energy electrification [3] - Sinopec's net profit for 2024 is expected to decline by over 16% year-on-year, with further declines anticipated in the first three quarters of 2025 [3] - In contrast, aviation kerosene is one of the few refined oil categories with a certain growth outlook, with an estimated consumption of around 40 million tons in 2024, leading to a market size exceeding 200 billion yuan [3] Group 2: Strategic Integration - The merger aims to create an integrated supply chain from refinery to wing, leveraging Sinopec's refining capacity and CAOG's distribution network as Asia's largest aviation fuel service provider [3][4] - The vertical integration allows Sinopec to access CAOG's channels for aviation fuel sales, enhancing resource supply stability and bargaining power in international markets [4] Group 3: Industry Dynamics - The merger raises concerns about the bargaining power of downstream airlines, as aviation fuel typically accounts for about 30% of their total operating costs [5] - The consolidation may lead to a shift in market dynamics, potentially disadvantaging smaller domestic airlines against the newly formed "giant" in the upstream market [5] - Analysts suggest that to balance the power dynamics in the aviation fuel supply chain, the civil aviation industry may initiate a new round of consolidation, potentially forming large airline groups based on existing major carriers [5]