Navigating Indian Bunker Market Dynamics: From Shortages To Stability

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After four months of shortages, the Indian bunker market is now adequately supplied with very low sulfur fuel oil (VLSFO), leading to a decline in prices. Traders report ample availability of VLSFO across Indian ports, signalling a shift in the market dynamics.

Ample Supply and Price Decline

Traders note a significant increase in VLSFO availability in Indian ports, resulting in price reductions. Prices for VLSFO in Mumbai, Kochi, and Colombo have notably decreased, reflecting the improved supply situation.

Increase in HSFO Demand

While VLSFO supply has stabilized, demand for high sulfur fuel oil (HSFO) is on the rise across India due to its prompt availability and cost advantage. Factors such as longer voyage routes and increased demand from scrubber-fitted vessels contribute to this trend.

Challenges and Market Observations

Despite improved supply conditions, challenges persist, particularly with balancing the demand for VLSFO and low sulfur heavy stock (LSHS) driven by industrial fuel requirements. Refineries navigate this delicate balance amidst increasing state regulations and thin margins in the bunker market. Additionally, market participants monitor developments in Sri Lanka, where bunker demand remains stable amidst ongoing fluctuations in Indian supply.

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Source: S&P Global