Global MABUX bunker indices experienced a sustained downward trend. The 380 HSFO index fell to US$508.54/MT, the VLSFO index decreased to US$646.49/MT and the MGO index saw a larger decline of US$25.57 to US$865.83/MT.
“At the time of writing, downward dynamics prevailed in the market,” pointed out a MABUX official.
The Global Scrubber Spread (SS) – the price difference between 380 HSFO and VLSFO –
continued its firm decline in Week 16 – minus US$5.10, to US$137.95. At the same time, the weekly average also decreased by US$5.81.
In Rotterdam, SS Spread remained unchanged at US$110. The SS Spread
weekly average in Rotterdam decreased by another US$11.83. In Singapore, the price
difference between 380 HSFO and VLSFO dropped by US$3, to US$117.
The average weekly value practically did not change, with a marginal decrease of US$0.16. “We expect SS Spread will continue to decline in the next week,” commented a MABUX representative.
The recent statistics show Europe has failed to secure enough long-term LNG contracts to offset cut-off Russian gas imports. This may prove costly next winter and could sharply tighten the market.
The European Union (EU) considers natural gas as a bridge fuel in the transition to renewable energy, and buyers generally struggle to commit to long-term contracts. This means that Europe might be forced to buy more from the spot markets as it did in 2022, which in turn is likely to push prices up.
The price of LNG as bunker fuel in the port of Sines, Portugal continued sliding and reached US$959/MT on 17 April.
The difference in price between LNG and conventional fuel on 17 April narrowed to US$119, while MGO LS in the port of Sines was quoted at US$849/MT that day.
“We expect the narrowing of the price difference to continue next week,” noted a MABUX representative.
During Week 16, the MDI index (which measures the correlation of MABUX market bunker prices (MBP Index) versus the MABUX digital bunker benchmark (DBP Index)), registered an underpricing of 380 HSFO fuel at all four selected ports.
The average weekly undervaluation margins decreased in three out of four ports, except for Houston where it increased by US$9 to reach minus US$45. In Rotterdam, Singapore and Fujairah, the MDI registered minus US$53, minus US$44 and minus US$96, respectively.
In the VLSFO segment, according to MDI, underestimation of fuel was registered at all selected ports. The undervaluation ratios were as follows, Rotterdam – minus US$53, Singapore – minus US$16, Fujairah – minus US$24 and Houston – minus 22. The average underprice margins increased moderately in Rotterdam and Houston, while they decreased in Singapore and Fujairah compared to the previous week.
Over Week 16, in the MGO LS segment, there were three underpriced ports: Rotterdam, Singapore, and Houston. The average weekly undervaluation levels did not show a clear trend and were recorded as minus US$59 in Rotterdam, minus US$82 in Singapore and minus US$17 in Houston. Fujairah remains the only overvalued port – plus US$147.
“The global bunker market lacks clear drivers for the formation of a sustainable trend. We expect bunker indices to change irregularly next week. It is also advisable to stay updated with the latest news and market analysis to make well-informed decisions in this dynamic market environment,” commented Sergey Ivanov, director of MABUX.
