Over the 18th week of the year, global bunker indices turned again into an uptrend, according to Marine Bunker Exchange (MABUX) report, which highlights that the instability in the global bunker market continues.
More specifically, the 380 HSFO index rose by US$18.89 to US$739.69 /mt, the VLSFO index went up by US$20.72 to US$946.43 /mt and the MGO index rose most significantly, by US$78.17 to US$1297.88 /mt.
“The ongoing military conflict in Ukraine keeps the global bunker market highly volatile,” commented Sergey Ivanov, director of MABUX.
Looking into the Global Scrubber Spread (SS) weekly average – the price difference between 380 HSFO and VLSFO – we see that it continued its moderate decline over the week, reaching US$201.83. At the same time, the difference in absolute values increased by US$1.83 at the end of the week.
In Rotterdam, the average SS Spread also dropped from US$224.83 to US$217.33, but the difference in the SS Spread’s absolute values rose by US$13.00 at the end of the week. The 380 HSFO/VLSFO price difference at the port of Singapore continued to narrow over Week 18, with the average dropping another US$9.66.
“We believe that the reduction in SS Spread in Singapore is temporary as it remains consistently above US$100 in other regions,” said Ivanov.
The increase in LNG prices seems to be continuing to have an impact on LNG bunker volumes in Europe and, especially, in Rotterdam. The 111,804 cubic metres (cbm) sold at the port in the latest quarter was up on the 94,454 cbm sold in Q4 2021, but was still down significantly on the 212,719 cbm total for Q3 2021, which is still Rotterdam’s highest quarterly LNG bunkering volume to date.
Over the 18th week, the average correlation of MABUX MBP Index (market bunker prices) vs MABUX DBP Index (MABUX digital bunker benchmark) was mostly in the overcharge zone. Thus, 380 HSFO fuel was overpriced by US$29 in Rotterdam, by US$125 in Singapore, by US$103 in Fujairah and by US$101 in Houston. The MABUX MBP/DBP Index (MBI) in the 380 HSFO segment did not have any firm trend over the week: the overcharge premium decreased in Rotterdam and Houston, while it increased in Singapore and Fujairah.
VLSFO fuel grade, according to the MBI index, was also overpriced in all selected ports: plus US$79 in Rotterdam, plus US$48 in Singapore, plus US$60 in Fujairah and plus US$57 in Houston. Here, the changes in the MBI index also did not have a single trend: the overcharge premium increased in Fujairah, decreased in Rotterdam and Houston, but did not change in Singapore.
As for MGO LS, for the first time in the last two months, the MBI index registered an average underestimation of this fuel grade: Singapore – minus US$25. In other selected ports, MGO LS fuel remained overvalued: Rotterdam – plus US$92, Fujairah – plus US$66 and Houston – plus US$11. In general, in the MGO LS segment, there has been a reduction trend in fuel overcharge premium in all ports.
The volumes of high sulphur fuel oil (HSFO) and ultra low sulphur fuel oil (ULSFO) sold in the Port of Rotterdam in the first quarter of 2022 were up year on year by around 14% and 41% respectively at 706,491 tonnes and 284,134 tonnes – but very low sulphur fuel oil (VLSFO) sales were down around 1% at 966,223 tonnes. Although HSFO sales were up on the first quarter of 2022, they were down on the preceding quarter – Q4 2021 – when the port’s suppliers delivered 745,271 tonnes of the high sulphur product.
Given that the Russia-Ukraine conflict has already had an impact on Rotterdam’s fuel oil cargo volumes – there may well be a further drop in HSFO bunker sales in the Q2 figures, according to MABUX.
“The instability in the global bunker market seems to continue and it is expected from the bunker indices to possibly have sharp irregular fluctuations next week,” noted Ivanov.
