Indian ports see Jan-July bunker, STS calls up 64% on year, monsoon hits July demand

Bunkering activity in India has experienced significant growth during the first seven months of 2024, with the total number of bunkering and ship-to-ship (STS) calls to Indian ports increasing by 64% year on year.

According to S&P Global Commodities at Sea data, the total number of bunkering and STS calls to Indian ports surpassed 6,765 compared with just 4,113 during the same period in 2023.

"This year the performance of all ports is better because mostly the demand has increased," a Gujrat-based trader told Commodity Insights.

"We anticipate that volumes could increase significantly, reaching up to 3,000-4,000 mt in the coming months for Hazira and Dahej," said a Hazira-based trader.

This time, the monsoon has had little effect in Mumbai, said market participants. Mumbai, which is one of the major bunkering hubs in the country, saw a 53% rise in total bunkering and STS calls, CAS data showed.

"One barge is operating at Mumbai OPL, specifically handling monsoon deliveries," a Mumbai-based trader said Aug. 8.

"For July, Mumbai's total volume is expected to exceed 60,000 mt. Product availability is strong, with significant HSFO and VLSFO orders at OPL deliveries," the trader added.

Attacks on shipping in the Red Sea have prompted shipowners to take longer voyages around Africa. This disruption caused a substantial increase in monsoon bunker demand at Indian ports, which is typically lower due to weather disruptions. The growth was further fueled by favorable pricing and consistent supply from domestic refineries since the second quarter of 2024.

Platts, part of Commodity Insights, assessed 0.5% marine fuel oil delivered to Mumbai at $641/mt CFR on Aug. 8, down $4/mt week on week, while in Kochi prices were at $647/mt, up $4/mt.

Weather disruptions hit bunker volumes at Gujarat-based ports

Demand for bunker fuels at West coast India ports took a hit in July as supplies have been impacted by the ongoing monsoon season, traders said.

During the Southwest monsoon period from June to September, certain port authorities impose restrictions on barge movement due to unfavorable weather conditions impacting anchorage supplies.

"Despite a steady flow of inquiries in July, weather conditions prevented us from fulfilling orders at locations like Vadinar and Sikka," said a Kandla-based supplier.

In June, the total volume of supplies was around 52,000 mt while in July it decreased to 35,000 mt, the supplier added.

"Our limitation lies in the lack of barge supply at anchorage, restricting us to tank truck deliveries at berth, which impacts our ability to handle larger volumes," said a Dahej-based supplier

Total Bunkering and STS calls fell to 26% month-over-month to 357 in July 2024 for Gujrat-based ports, CAS data showed.

Gujarat ports include Kandla, Sikka, Vadinar Terminal, Port Okha, Bedi Bunder, Navlakhi, and Mundra in the Gulf of Kutch, along with Dahej, Hazira, Jafrabad, Magdalla, and Pipavav in the Gulf of Khambhat.

East Coast ports see some product unavailability

Haldia market demand remained stable, with consistent supply maintaining market stability. Uncertainty about refinery maintenance has left market participants unsure about its impact on August demand, with some predicting a product shortage and others expecting market stability

"In July Haldia's bunker volumes ranged between 15,000 mt-17,000 mt," said a Visakhapatnam-based trader adding "Annually, we're seeing a 16% rise."

"We had a surplus of product in July and we attained volumes of around 16,000 mt. There is no firm date yet for the refinery shutdown, it was planned to take place in July but things got delayed. We're hearing it might start around mid-August", a Haldia-based IOCL official told Commodity Insights.

Market sources reported increased demand at Visakhapatnam and Kakinada from late Q2 due to Red Sea diversions, while other ports showed no significant change. Pipeline issues at Paradip disrupted VLSFO supplies and reduced inquiries.

"In July, we recorded volumes of 36,000 mt at Visakhapatnam, while Kakinada saw volumes of around 32,000 mt," said another trader.

Since January, Paradip has been facing issues with the refinery pipeline, leading to a shortage of VLSFO supply there, the trader added.

"New Mangalore and Tuticorin have experienced stable volumes, with no significant increase compared to last year."

Kochi demand stable, volumes shift

Market sentiment in Kochi has remained stable, but some suppliers experienced product shortages in July, leading to a decrease in their monthly volumes. However, suppliers who had the product saw increased volumes as customers shifted to them.

According to a Kochi-based supplier, the monsoon season has not been favorable, resulting in a decrease in monthly volumes. It could be due to limited options or a diversion of demand to Sri Lanka.

An IOCL official in Kochi mentioned a slight dip in VLSFO inquiries but highlighted better performance due to less competition last month.

"We have done more than 20,000 mt in July. There hasn't been much change in the industry volumes, it's basically a shift of volumes from one participant to another," the official added.

An increase in bunker demand at Colombo led to a decline in Kochi. Increased demand led to supply tightness in Sri Lanka, mainly impacting Colombo and Hambantota, while Trincomalee remained unaffected.

"But the situation is now easing," a Sri Lanka-based supplier said.

Platts assessed 0.5% marine fuel oil delivered to Kochi at $647/mt CFR on Aug. 7, a $23/mt discount to Marine Fuel 0.5% Bunker Delivered Colombo.