India’s bunker fuel market experienced notable disruptions in July, primarily due to severe weather and barge availability constraints. Key west coast ports, including Mumbai, Kochi, Kandla, and others, faced significant supply bottlenecks in the first half of the month. Meanwhile, east coast ports managed to maintain relatively stable demand, even with some logistical issues.
The Incident
Market participants reported that the adverse weather that began on July 3 severely impacted bunker operations, especially in Gujarat. Ports like Kandla, Sikka, Vadinar, and Tuna Berth had to suspend operations for extended periods, only managing brief resumptions after July 16. A trader based in Gujarat indicated that the average stem size during this disrupted period ranged from 300 to 400 metric tons, with total volumes plummeting to about 35,000 metric tons for the month. This drastic drop was attributed to supply challenges stemming from both weather issues and limited product availability.
Market Dynamics
Both Mumbai and Kochi reported diminished demand for marine gas oil throughout July, reflecting the difficulties posed by operational constraints. While Mumbai’s marine gas oil demand saw an average stem size of around 150 metric tons, demand for high-sulfur fuel oil remained limited. Market prices also showed significant fluctuations; as of August 6, marine fuel oil 0.5% delivered to Mumbai was assessed at $870 per metric ton, marking an increase of $180 per metric ton from the previous month. Similarly, Kandla’s price rose to $878 per metric ton, reflecting ongoing supply pressures.
Kochi faced comparable challenges, with weather disruptions impacting volumes and creating logistical hurdles for barge availability throughout July. Sources indicated that an Indian refining major supplied close to 20,000 metric tons of very low sulfur fuel oil in Kochi during the month, which was down compared to June.
East Coast Consistency
In contrast, east coast ports like Chennai, Tuticorin, and Paradip saw stable demand during the month. Paradip, in particular, benefitted from an increase in ship callings, leading to an improvement in demand for very low sulfur fuel oil, with approximately 11,000 metric tons supplied in July. Average stem sizes there ranged from 500 to 700 metric tons, indicating a healthy market presence.
Behind the Headline
The disruptions in India’s bunker fuel market underline the intricate relationship between weather conditions and operational logistics. Suppliers must remain agile and responsive to unpredictable weather patterns while managing barge availability. For operators in affected regions, robust contingency plans and diversified supply routes are becoming increasingly vital to mitigate future disruptions. Continued monitoring of demand on the east coast will be essential, as these ports may play a more pivotal role in the overall supply balance as conditions evolve.
