In March, demand for bunker fuels at ports in India and Sri Lanka showed signs of weakness, even though supply levels remained stable, as reported by traders. An India-based bunker supplier noted that while the availability of fuel improved, inquiries for bunker fuels were very slow. Charterers struggled to secure favorable rates, resulting in fewer fixture opportunities. This decline in demand was evident not only in India but also in Sri Lanka, where players reported similar challenges.
The slow bunker demand in March particularly hindered effective utilization of available funds within the market. Traders mentioned that past inconsistencies in product availability have played a role in the decreased number of inquiries. The Koyali refinery, a primary domestic supplier of very low sulfur fuel oil (VLSFO) in India, returned online in early March after maintenance. According to S&P Global Commodities at Sea, the total number of bunkering and ship-to-ship calls to Indian ports increased by 15% from February, reaching 1,228 in March.
However, pricing trends revealed a decline, with the price of VLSFO delivered to Kochi assessed at $550/mt, down $27/mt from the previous week. In contrast, the port of Visakhapatnam managed to maintain sufficient availability of VLSFO amid weak demand, contrasting with East Coast ports like Paradip and New Mangalore, which were still experiencing supply shortages. In Sri Lanka, monthly bunker fuel volumes at major ports like Colombo and Hambantota fell significantly in March, attributed to sluggish regional demand and competing ports’ inventory availability. A source from Lanka IOC reported a 35-40% drop in volumes for March compared to February.
Despite these challenges, there remains optimism for a rebound in April, with traders noting tight barge schedules and a stronger delivery capability. Overall, while March was tough for bunker fuel demand, the market anticipates improvements in the coming month.