The Marine Bunker Exchange (MABUX) global bunker indices are still on an upward trend as of the current week. The 380 HSFO index increased by US$10.4. In turn, the VLSFO index rose by US$3.4 and the MGO index gainded US$17.7.
“At the time of writing, the market was still on an uptrend,” stated a MABUX representative.
The Global Scrubber Spread (SS) – the price difference between 380 HSFO and VLSFO – continued to fall, dropping by US$7 from the previous week, reaching US$107. Additionally, the weekly average fell by US$10.4.
SS Spread in Rotterdam, on the other hand, increased slightly from US$56 last week to US$62. In Rotterdam, the weekly average of SS Spread increased by US$10.
In Singapore, the price differential between 380 HSFO and VLSFO has continued to fall: minus US$32 breaking the US$100 level for the first time since 5 May 2022. The weekly average was down US$31.5.
“The sustainable decline in the SS Spread creates favourable conditions for the further expansion of the alternative bunker fuel market segment,” noted a MABUX official.
Europe’s purchases of US LNG have recently declined, with volumes in June totalling 4.1 million metric tonnes, down from 5.6 million tonnes in May.
Gas inventories in Europe, including the United Kingdom, have been quickly expanding and have already reached 889 terawatt-hours (TWh). Stocks are presently +246 TWh +38% higher than the 10-year seasonal average, despite a narrowing surplus from +280 TWh +81% in March.
The price of LNG as a bunker fuel at the port of Sines (Portugal) fell sharply, to US$811 on 10 July. The price differential between LNG and conventional fuel has shrunk to US$11, preferring MGO, which was quoted at US$800 in the port of Sines that date.
According to MABUX, during Week 28, the MDI index recorded an undervaluation of 380 HSFO fuel in three of the four selected ports: Rotterdam joined Singapore and Fujairah in the undervaluation zone.
The average weekly undervaluation margins in Rotterdam rose by 22 points, fell by 14 points in Singapore, and stayed steady in Fujairah. Houston was the only port in this fuel sector where the overcharge average increased by one point.
In the VLSFO segment, based on MDI data, only Singapore remained overcharged. The overprice average here decreased by 31 points. Fujairah moved into the underprice zone and joined Rotterdam and Houston. The average undercharge ratio decreased in Rotterdam by 14 points but increased in Fujairah and Houston by 24 points and 4 points, respectively.
In the MGO LS segment, MDI registered underestimation in all four selected ports. The average undervaluation levels widened in Rotterdam by 11 points, in Singapore – by 11 points, in Fujairah – by 35 points and in Houston by 10 points.
“We expect the sustainable uptrend in the Global bunker market to continue next week,” stated Sergey Ivanov, director of MABUX.