India's bunker fuel demand rises in May amid improved supply, competitive prices

India's bunker fuel demand strengthened in May, supported by improved product availability and competitive pricing that stimulated buying interest, market participants told Platts, part of S&P Global Energy, on June 3.

Traders and suppliers said demand increased after May 15 at West Coast ports such as Kochi, Kandla, and Mumbai. Demand firmed in Kochi and shifted away from Colombo due to rough weather and high pricing premiums.

"Bunker nominations remained volatile, with demand fluctuating from week to week. Nevertheless, we reported a strong sales performance in May and estimated total bunker sales across its Indian ports at around 165,000 mt," a source close to a major Indian refinery said.

An India-based supplier said, "We noticed a significant increase in demand after the first half of the month, which was marked by underperformance. Following the 15th, demand rose considerably. However, the demand for high-sulfur fuel oil in Mumbai remained below average, with our supply reaching nearly 5,000 metric tons."

A Gujarat-based trader said he had seen strong demand in Kandla for containers and tankers in May, resulting in significant vessel line-ups for supplies. "It is essential to book the barge at least 10 days in advance. Despite these challenges, it has been a solid month for us, marked by good volumes and numerous inquiries. Currently, we are offering 7 to 15 days of credit on a cash-on-delivery basis due to ongoing issues," the trader added.

Platts assessed marine fuel oil 0.5% delivered to Mumbai at $920/mt on June 2, down $20/mt month over month. Marine fuel oil 0.5% delivered to Kandla was assessed at $948/mt, up $28/mt over the same period.

Kochi sees strong demand in May

Refining operations have increasingly been oriented towards meeting domestic demand for petrol and LPG, a source at a major Indian refinery said, adding that at present there are no significant shortages of fuel oil in the country.

A Kochi-based bunker fuel supplier said it observed strong demand in May, with good inquiries from traders throughout the month, adding that "most of the demand was driven by container vessels."

A source with knowledge of the matter said, "Overall, an Indian refining major supplied close to 12,500 mt of very low sulfur fuel oil in Kochi during the month."

Platts assessed marine fuel oil 0.5% delivered to Kochi at $948/mt on June 2, up $8/mt from month over month, while marine fuel oil 0.5% delivered to Colombo was assessed at $930/mt, down $50/mt over the same period.

East coast India sees barge tightness

Ports along India's east coast experienced stable demand in May, while Haldia and Paradip saw tight availability of barges. However, Visakhapatnam and New Mangalore saw strong demand for HSFO, traders, suppliers and barge operators told Platts on June 3.

A supplier on the east coast reported strong demand for HSFO in May. In May, approximately 3,000 mt were supplied in New Mangalore, the supplier said, adding that while demand in the region remains significant, some inconsistencies had been observed with the product.

"In New Mangalore, the demand for VLSFO remained stable month over month in May at about 6,000 mt. However, we observed a significant number of inquiries at anchorage that could not be fulfilled due to the unavailability of barges," an east coast-based trader said.

An India-based supplier said, "The [Indian] market was active whenever prices moved lower," adding that most transactions were concluded on a Mean of Platts Singapore-linked basis. "Typical stem sizes ranged from 300 mt to 1,000 mt."

A Paradip-based supplier said product availability in the region was good in May, while demand was lower than in April. "We also observed fewer vessel callings in May than in April. Additionally, we faced operational issues at the port because one of our two barges was unavailable, so we had to operate with only one. However, these issues have now been resolved, and we expect strong demand in June, projected at 7,000 to 8,000 mt."

A Visakhapatnam-based supplier said LSFO demand in Haldia was low in May. "We cannot say there were no inquiries and demand; operational issues were the main concern, barge tightness at the port left suppliers with only two barges, as the others were unavailable," the supplier said, adding that a major Indian refinery had supplied over 8,000 mt during the month.

Another Visakhapatnam-based supplier said that supply and demand at Chennai and Tuticorin ports had been stable in May compared to previous months. "In Chennai port, the volume was around 3,000 mt, while in Tuticorin, the volume was around 2,500 mt," the supplier added.

A local supplier said demand for HSFO in Visakhapatnam remained strong in May, supported by a "good number of inquiries that increased after the 15th of the month."