08-06-2016

Mumbai-Colombo 380 CST bunker fuel spread widens to 6-month high

bunker

The spread between Mumbai and Colombo 380 CST bunker fuel prices widened to its highest level of $10/mt in six months since S&P Global Platts started assessing Colombo bunker fuel and marine gasoil on January 4 this year, on the back of prompt supply tightness in Mumbai.

Mumbai 380 CST delivered was assessed at $259.50/mt Monday, while Colombo 380 CST was assessed at $249.50/mt.

Bunker fuel prices at Mumbai are typically lower than Colombo due to direct supply from two refineries there, whereas Sri Lanka’s bunker fuel supply includes indirect imports from Mumbai as well as direct imports from Fujairah and other locations, traders said.

But supply tightness at Mumbai saw the spread flip to positive on June 2, at $4/mt, Platts data showed.

“I checked with couple of Mumbai suppliers yesterday [Monday] for cargo, but I was told there were no avails for next few days,” said a Mumbai-based bunker trader Tuesday.

However, a second Mumbai-based trader said Indian refiner Bharat Petroleum Corporation Limited had released some stems Monday and Tuesday.

“It’s tight these two days, but the situation should ease soon,” he said.

A source from refiner Hindustan Petroleum Corporation Limited last week said it will have stock in Mumbai from June 15, and that it would be getting some cargoes from its refinery in Visakhapatnam, Platts previously reported.

State-owned BPCL and HPCL each owns a refinery in Mumbai that produces residual fuels.

The spread between Mumbai and Colombo 380 CST bunker fuel prices had been as wide as minus $65/mt February 12, Platts data showed. The spread ranged between minus $65/mt and minus $5/mt over February 12 to May 23.

Source: Platts 

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