Demand for bunker fuel in Sri Lanka’s ports is rising as India still faces supply bottlenecks

Bunker demand in Sri Lanka's ports is increasing, India continues to struggle with supply bottlenecks
Despite increased demand, price movements for marine fuel oil on March 28 showed mixed trends. Prices in Kochi increased by $20/mt to $700/mt CFR, while Mumbai prices fell to $698/mt. Demand has surged at Indian ports, with changes in shipping routes affecting fuel availability and prompting redirection of inquiries to Sri Lanka.
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Despite increased demand for marine fuel oil in ports like Mumbai, Kochi, and Gujarat, price movements on March 28th were mixed. Platts estimated prices in Kochi at $700/mt CFR, up $20/mt from the previous week, while prices in Mumbai fell to $698/mt, down $8/mt. In Sri Lanka’s Colombo port, prices were estimated at $700/mt, down $7/mt from the previous week.

Demand has surged at Indian ports due to long-haul ships docking more frequently, leading to a shift in volumes from other ports like King Abdullah Port and Djibouti. The unavailability of VLSFO in some Indian ports has boosted demand in Kandla and Mundra, prompting traders to redirect inquiries to Sri Lanka. Bunker sales in Colombo have increased by 33% to 40,000 tonnes/month due to disruptions in the Red Sea.

Supply shortages at Indian ports like Kochi and Mumbai have led to delivery bottlenecks, with refineries struggling to keep up with the required production volumes of VLSFO. The IOCL refinery in Gujarat partially closed in February amidst increased demand. Production volumes for VLSFO, HSFO, and LSMGO are being closely monitored to meet market demands. Despite challenges, state-run refineries like HPCL, BPCL, and IOCL remain key suppliers in the Indian market.

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