Bunkering, TS volumes surge in Colombo
As shipping giant Maersk has reportedly stated that the crisis on the Red Sea is expected to continue for months Sri Lanka sees a surge in volumes at the Colombo Port and an increased demand in bunkering as more than 80 per cent of global vessels are diverting traffic from the Suez Canal around the Cape of Good Hope.
With the increase in freight rates consumers are likely to face a further crisis in increased prices in time to come as the cost of travel has surged, Shippers’ Academy CEO Rohan Masakorala said.
He noted that the surge in volumes at the Colombo Port is expected as vessels divert traffic but this is likely to be temporary.
In the longer run there is the possibility that the frequency of vessels running this route will drop in time to come and they could even omit this port when scheduling their vessels in line with their availability.
At the moment the charter ship market is also growing due to the increased demand. But if transshipment containers get held up there can be a capacity crunch as well for new volumes that would mean less space available for new export orders.
Bunkering demand has also seen a surge at the ports of Colombo and Trincomalee that has reportedly resulted in a noticeable increase in Very Low Sulphur Fuel Oil (VLSFO) prices in both ports. Colombo’s VLSFO premiums over major Asian bunker hubs Singapore and Fujairah have risen by almost US$32-43 per metric tonne (MT) since early this month, to around $103 per MT now. Meanwhile, Trincomalee’s VLSFO’s premiums stand at $38 per MT over both Singapore and Fujairah.
Reports indicate that both these ports have indicated a good supply of VLSFO and Low Sulphur Marine Gas Oil (LSMGO) fuel. It is interesting to note however that this increased demand has created pressure on the availability of both grades of fuel across several Indian ports.
The Colombo Port has stated that it has experienced a surge in volumes as a result of the diversion of ships via the Cape of Good Hope.
Colombo Port Chairman Keith Bernard told the Business Times that from the previous 17,000 TEUs they are now handling 25,000 TEUs per day of transshipment volumes since mid-December.
He noted that they expect this increase in demand to continue to see throughout the first quarter of this year.
As a result of the Red Sea crisis more larger and feeder vessels are now calling at the Colombo Port, Mr. Bernard said.
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