During the 14th week of the year, there was a moderate upward trend observed in the Marine Bunker Exchange (MABUX) global bunker indices.
The 380 HSFO index saw a rise of US$6.91 to US$553.09/MT. The VLSFO index climbed by US$8.49, reaching US$696.13/MT. Additionally, the MGO index experienced an increase of US$10.14, surpassing the US$900 mark and reaching US$901.39/MT.
"At the time of writing, the upward trend in the global bunker market continued," stated a MABUX spokesperson.
The MABUX Global Scrubber Spread (SS), which represents the price variance between 380 HSFO and VLSFO, experienced a moderate increase of US$1.58, reaching US$143.04.
However, the weekly average witnessed a slight decrease of US$0.17. Specifically in Rotterdam, the SS Spread widened by US$3, to US$113, hovering close to the US$100 mark (SS Breakeven).
Conversely, the average weekly value in the port narrowed by US$5. In Singapore, the 380 HSFO/VLSFO price differential increased by US$6, to US$158.00, accompanied by a marginal weekly average rise of US$0.50. It's anticipated that the upcoming week might exhibit fluctuating trends in the dynamics of the SS Spread.
Europe is on track to wrap up the winter heating season with an unprecedented surplus of natural gas inventories. This surplus is anticipated to provide a buffer against potential price spikes and energy crises in the coming winter. As of 25 March, just one week before the conclusion of the major gas withdrawal season on 31 March, European Union gas storage facilities were at 59% capacity.
While this capacity represents only about a quarter of the EU's winter consumption, the substantial levels of stock at the start of the refill season in April should support Europe's objective of reaching 90% capacity by 1 November.
However, there are concerns about the future of Russian pipeline supply via Ukraine, as the multi-year transit agreement is set to expire on 31 December. Both Ukraine and the EU have indicated that they do not plan to extend this transit agreement. This development raises specific concerns for certain central European EU members, such as Austria and Slovakia, regarding their gas supply security.
On 3 April, the price of LNG as bunker fuel in the port of Sines, Portugal, dropped to US$643/MT, which is a decrease of US$15 compared to the previous week.
Concurrently, the price differential between LNG and conventional fuel on April 3rd expanded to US$263 in favour of LNG, compared to US$242 the previous week. On that same day, MGO LS was priced at US$906/MT in the port of Sines.
During Week 14, the MDI index, which compares market bunker prices (MABUX MBP Index) to the MABUX digital bunker benchmark (MABUX DBP Index), displayed the following trends across four selected ports: Rotterdam, Singapore, Fujairah, and Houston:
In the 380 HSFO segment, all four selected ports were situated in the undercharge zone. Weekly average margins saw increases of 7 points in Rotterdam, 10 points in Singapore, 1 point in Fujairah, and 14 points in Houston. The MDI index in Fujairah remained slightly above US$100.
For the VLSFO segment, based on MDI, all ports shifted into the underprice zone, with the average weekly ratio rising by 15 points in Rotterdam, 13 points in Singapore, 16 points in Fujairah, and 21 points in Houston.
In the MGO LS segment, only Houston was considered overvalued, experiencing a 2-point weekly average ratio decline. The other three ports remained undervalued. Weekly average margins increased by 4 points in Rotterdam, 1 point in Singapore, and 5 points in Fujairah. MDI indices in Rotterdam and Singapore continued to surpass the US$100 threshold.
During the week, there was a significant movement towards underpricing observed in the VLSFO segment. Meanwhile, the equilibrium between undervalued and overvalued ports in the 380 HSFO and MGO LS categories remained consistent.
"We expect that the global bunker market will maintain its potential for moderate growth
in the forthcoming week," stated Sergey Ivanov, Director of MABUX.
