Global Bunker Market remains in the same holding mode that has prevailed in the last 25 days approximately.
The MABUX World Bunker Index showed a slight upward evolution over the last week. The 380 HSFO index increased by US$3/mt, VLSFO gained US$4/mt and MGO added US$3/mt. The price difference between 380 HSFOs and VLSFOs (the so-called scrubber spread) rose slightly by US$1.47 and averaged US$57.66.
The average scrubber spread in Rotterdam has narrowed to US$48.33 from US$51.00 a week ago. In Singapore the spread has risen to US$67 from US$60.67.
Meanwhile, Fujairah Oil Industry Zone and price reporting agency S&P Global Platts reported that fuel oil stocks at the Middle Eastern hub of Fujairah have dropped to the lowest level in 15 weeks, according to Ship & Bunker.
"Heavy distillate and residue inventories at the port dropped by 2.7% to 13.795 million barrels in the week to Monday, the lowest level since 27 April, said Ship & Bunker added.
"Despite firm values for high sulphur fuel oil, medium sulphur fuel oil is still heading to the low sulphur fuel oil pool on account of lower conversion costs, adding to the market glut," commented a MABUX spokesperson. "Medium sulphur fuel oil with sulphur content of around 1% can go into either the VLSFO pool or HSFO pool, depending on the market. However, the interest is more towards the VLSFO pool versus the HSFO, as the cost of converting a lower value product to a higher value is much higher," he added.
The United States has emerged as the biggest importer of high sulphur fuel oil (HSFO) from the Baltic region. Last month some 46% of all HSFO leaving the Baltic Sea went to the US. HSFO is in high demand from refiners in the US seeking to process it through coking units. "This has been one of the factors keeping the price spread between VLSFO and HSFO much narrower than expected this year," the MABUX spokesperson told Container News.