The Marine Bunker Exchange (MABUX) global bunker indices did not show a sustainable trend and changed sideways. The 380 HSFO index fell by US$2.15/mt reaching US$506.31/mt, the VLSFO index lost US$3.86/mt at US$605.59/mt and the MGO index showed an increase of US$5.12 climbing to US$824.77/mt.
"At the time of writing, there was not a firm trend in the market," noted a MABUX official.
The Global Scrubber Spread (SS) - the price difference between 380 HSFO and VLSFO - continued to decline and breached the SS breakeven line of US$100 for the first time since 13 October 2021. The reduction amounted to US$1.71, with a value of US$99.28 compared to US$100.99 in the previous week. Additionally, the weekly average also decreased by US$2.47.
Conversely, in Rotterdam, the SS Spread witnessed a slight increase, rising from US$60 to
US$70, representing a gain of US$10. The average weekly value of SS Spread in Rotterdam remained nearly unchanged, with an increase of only US$0.16.
In Singapore, the price difference between 380 HSFO and VLSFO continued to decrease, reaching minus US$8. The weekly average experienced a decline of US$20.83.
The current state of the SS Spread provides an advantage for selecting conventional VLSFO bunker fuels over using a combination of HSFO and scrubber.
Europe’s natural gas stockpiles are at elevated levels and on track to be full sooner than planned. This gives governments and industries confidence that last year’s energy crisis will not be repeated.
The benchmark natural gas prices are one-tenth of the records seen last summer when Russia slashed pipeline supply to Europe.
Ahead of the 2023/2024 winter, Europe can only hope for another winter of milder temperatures without prolonged periods of freezes that would boost demand for heating and for gas-fired power generation.
"In case of that according to Morgan Stanley, Europe’s gas prices could plunge from current levels and halve to US$16.85 per megawatt-hour (MWh)," commented a MABUX representative.
The price of LNG as bunker fuel in the port of Sines (Portugal) continued to decline and
reached the level of US$799/mt on 18 July. The price difference between LNG and conventional fuel on 18 July showed US$11 in favor of LNG: MGO LS was quoted in the port of Sines at US$810/MT that date.
During Week 29, the MDI index (the ratio of market bunker prices (MABUX MBP Index) and the digital bunker benchmark MABUX (MABUX DBP Index)) registered an underestimation for all types of fuel in the selected ports of Rotterdam, Singapore, Fujairah and Houston.
Specifically, in the 380 HSFO segment, the average underestimation widened by 11 points in Rotterdam, 1 point in Singapore, and 8 points in Houston, while it narrowed by 3 points in Fujairah.
In the VLSFO segment, based on MDI data, the average underprice ratio increased by 11 points in Rotterdam, 26 points in Singapore, 20 points in Fujairah, and 2 points in Houston.
In the MGO LS segment, the MDI recorded a reduction in the undercharge margins by 5 points in Rotterdam, 12 points in Singapore, and 9 points in Fujairah. However, in Houston, the MDI showed an increase of 3 points.
"We expect that the global bunker market will maintain its potential for continued moderate growth in the upcoming week," commented Sergey Ivanov, director of MABUX.
