Sri Lanka Ports saw a high demand for bunker fuel in April, with volumes surpassing 74,000 MT due to the narrowing price spread with India, ongoing cargo imports, and a steady demand from container vessels, S&P Global Commodity Insights said.
According to Platts Bunkerworld survey, in April, major Sri Lankan ports saw a slight increase in volumes as total bunker fuel volumes reached 74,250 MT.
"During the first two weeks of April, the price differential between India and Colombo was low, leading to increased inquiries in the market," a Colombo-based trader told Platts.
"However, by the later weeks, the price differential climbed to $25/MT. Overall inquiry volume for April remained steady at 85,000-90,000 MT, with a higher conversion rate for Very Low Sulfur Fuel Oil (VLSFO) at 60-65%, up from 50% in March.
Platts, part of S&P Global Commodity Insights, assessed VLSFO delivered to Kochi at $ 540/MT on May 9, up $ 2/MT week on week.
In Singapore, Platts Marine Fuel 0.5% FOB Cargo rose $ 15.54/MT to close at $ 487.64/MT over the same period. Marine fuel oil 0.5% delivered to Colombo was assessed at $ 558/MT, down $ 7/MT week on week.
S&P Global Commodity Insights said that total industry volumes, including Colombo, Trincomalee, and Hambantota ports, ranged between 70,000-75,000 MT, while the average price spread between India and Colombo remained rangebound, fluctuating between $ 15-20/MT.
A source close to Lanka IOC PLC has told Platts, strong demand last month and expects good inquiries in May as well. The company is at an advantage when India lacks any product.
According to traders, there is a strong demand for High Sulfur Fuel Oil (HSFO) at Colombo, as most of the vessels requiring bunkers arrive from the southern region. However, due to limited product and barge availability, HSFO deliveries took a hit in April.
"There are two major suppliers for HSFO in Sri Lanka. Last month, Sinopec did not offer any product, and Ceylon Petroleum Corp. prices were not competitive. Thus, we were unable to offer it at our ports," a Sri Lanka-based trader told Platts.
"Secondly, we had a limited barge availability for high-sulfur deliveries as some barges had gone for dry docking and repairs. However, for this month, both suppliers have offered the product at competitive rates, and barges are back in operation now,” the source said.