The global bunker market concluded 2024 in a state of relative stability. The first half of the year saw multidirectional fluctuations across indices, with moderate price increases for 380 HSFO and VLSFO, alongside a slight decline in MGO LS quotes.
However, the second half of the year experienced a significant reduction in the magnitude of these fluctuations. From September onward, trends across all three types of bunker fuel stabilized at their respective levels. By the end of the year, the 380 HSFO Index showed minimal change, increasing by just US$1.96, while the VLSFO Index and MGO LS Index recorded declines of US$54 and US$125.66, respectively.
“Looking ahead to early 2025, we expect global bunker indices to lack a pronounced trend and continue exhibiting multidirectional movements,” stated a MABUX official.
Regionally, the 380 HSFO segment displayed mixed trends in 2024. Central and South America saw price increases of 15.9% and 5.7%, respectively, while all other regions experienced moderate declines ranging from 2% to 8%.
In the VLSFO segment, prices fell across all regions, with decreases ranging from 6% to 14%. A similar pattern was observed in the MGO LS segment, where prices dropped between 17% and 26%.
The steepest decline in 380 HSFO prices occurred in Asia/Oceania, with a decrease of 8.1%, while VLSFO and MGO LS saw their largest reductions in the Africa/Middle East region, with drops of 14.4% and 26.8%, respectively.
In 2024, the MABUX Global Scrubber Spread (Global SS)—the price difference between 380 HSFO and VLSFO—remained comfortably above the US$100 mark during the first half of the year, supporting the profitability of the 380 HSFO + Scrubber combination (SS Breakeven). However, by June, the indicator began approaching the SS Breakeven point, fluctuating around this level until October. In the final quarter, the Global SS fell below US$100.00 and settled within the US$73–US$76 range by year-end. This ongoing decrease in the SS Spread signals a reduction in the economic efficiency and profitability of the 380 HSFO + Scrubber combination within the global bunker market.
In Rotterdam and Singapore, the dynamics of the SS Spread mirrored the global trend:
- Rotterdam: The SS Spread fell below US$100 starting in May, reaching a record low of US$14 by the end of October. However, it rebounded in the final months of the year, stabilizing around US$60 by year-end.
- Singapore: The SS Spread remained more stable, staying at or above US$100 until November. In December, it dropped below the SS breakeven point, fluctuating between US$85.00 and US$95.
Despite the SS Spread consistently falling below the US$100 threshold, scrubber adoption continued to rise. According to DNV, the total number of ships with scrubbers installed or in operation reached 5,790 in 2024, up from 4,875 in 2022 and 5,375 in 2023. The primary users of scrubbers remain large-tonnage vessels, including bulk carriers, container ships, and tankers.
MABUX Market Differential Index (MDI)
In 2024, the MABUX Market Differential Index (MDI), which compares market bunker prices (MBP) with the MABUX digital bunker price benchmark (DBP), indicated a consistent trend of underpricing for all fuel types in Rotterdam and Singapore.
Rotterdam:
- 380 HSFO: The MDI showed an average undervaluation of US$53/MT in Q1, US$51/MT in Q2, and US$36/MT in Q3. A brief period of overvaluation occurred in October and November (+15–45 US$/MT), but the year ended with undervaluation.
- VLSFO: Fuel remained undervalued throughout the year, with averages of -30 US$/MT, -61 US$/MT, -50 US$/MT, and -38 US$/MT across the four quarters.
- MGO LS: Underpricing was more pronounced, with average values of -98 US$/MT, -91 US$/MT, -112 US$/MT, and -100 US$/MT across the four quarters.
Singapore: Although underpricing was observed in the 380 HSFO and MGO LS segments, the gap between market prices and the MABUX digital benchmark was less pronounced compared to Rotterdam.
- 380 HSFO: The underpricing averaged -63 US$/MT in Q1, -31 US$/MT in Q2, -31 US$/MT in Q3, and -13 US$/MT in Q4.
- VLSFO: The MDI indicated moderate overvaluation in Q1 (+27 US$/MT), Q3 (+10 US$/MT), and Q4 (+11 US$/MT), while Q2 saw an undervaluation of -20 US$/MT.
- MGO LS: Undervaluation remained steady throughout the year, with values of -95 US$/MT in Q1, -101 US$/MT in Q2, -112 US$/MT in Q3, and -98 US$/MT in Q4.
The dynamics of the global bunker market suggest that the trend of undervaluation across all bunker fuel types is likely to continue in the short term.
LNG as a Bunker Fuel
Since August 2024, global gas indices, particularly TTF, have been on a steady upward trajectory. TTF has consistently remained above 35 €/MWh, even briefly surpassing 48 EUR/MWh in early December. This trend has directly impacted the rise in LNG prices as a bunker fuel.
In the first half of 2024, LNG prices were lower than the cost of the most expensive traditional bunker fuel, MGO LS, by an average of 247 US$/MT in Q1 and 114 US$/MT in Q2 at the port of Sines (Portugal), and by 164 US$/MT and 108 US$/MT, respectively, in ARA.
However, by August, this cost ratio shifted in favour of MGO LS. By the third and fourth quarters, LNG prices were higher by 47 US$/MT and 191 US$/MT in Sines, and by 46 US$/MT and 168 US$/MT in ARA.
Currently, the price difference between LNG and MGO LS ranges from 200 to 250 USD/MT in the port of Sines and from 140 to 230 US$/MT in ARA, with MGO LS being the more expensive option. Despite this price gap, LNG remains the preferred alternative fuel for the shipping industry.
This is mainly due to strong demand in the container shipping sector, supported by a well-established LNG bunkering infrastructure and a steady increase in the number of LNG-powered vessels. According to DNV, the number of LNG-powered vessels (both on order and in-service) reached 723 units in 2024, up from 354 in 2022 and 472 in 2023, highlighting the growing adoption of LNG in the maritime sector.
In the medium term, a significant narrowing of the price gap between LNG and MGO is unlikely. However, this is not expected to slow the expansion of the LNG fleet segment. LNG continues to be regarded as the most cost-effective, accessible, and viable alternative fuel for the shipping industry.
Sergey Ivanov, Director, MABUX, stated: “Overall, the situation in the global bunker market remains fairly stable given the current balance of fundamental factors of supply and demand. However, any escalation in geopolitical tensions could cause a temporary spike in bunker prices. Additionally, a change in the segmentation of the regional bunker market in the Mediterranean towards more environmentally friendly fuels is expected due to the declaration of this region as an Emission Control Area (MedECA) from May 1, 2025. Despite this, significant structural changes in the global bunker market in 2025 are unlikely.”