The global Marine Bunker Exchange (MABUX) indices showed a consistent downward trajectory by the end of the 22nd week.
The 380 HSFO index decreased by US$9.38, falling from US$487.89/MT in the previous week to US$478.51/MT, the VLSFO index dropped by US$14.30, reaching US$590.26/MT, and the MGO index declined by US$24.23 to US$776.45/MT.
“At the time of writing, the downward trend in bunker indices has persisted,” pointed out a MABUX representative.
The Global Scrubber Spread (SS) – the price difference between 380 HSFO and VLSFO – experienced a moderate decline of US$4.92, standing at US$111.75, according to the report.
At the same time, the weekly average decreased by a lesser amount, minus US$2.13. In Rotterdam, the SS Spread, on the other hand, gained US$5 reaching US$97. The weekly average of the SS Spread in Rotterdam added US$1.50.
In Singapore, the price difference of 380 HSFO/VLSFO also increased by US$1 while the weekly average increased by US$13.84.
“Overall, SS Spread values remain stable and fluctuate around the US$100 mark,” commented a MABUX official.
MABUX noted in its report that the combination of ample inventories at the end of a mild winter, steady imports of LNG, and weak demand has led to eight consecutive weeks of weekly losses in European benchmark natural gas prices, the longest weekly losing streak in more than six years.
Besides, currently, gas inventories are comfortably high for this time of the year, according to MABUX, which said that as of 24 May, natural gas storage sites in the European Union were 66.71% full. The level of gas in storage is the highest for this time of the year in at least a decade.
The price of LNG as bunker fuel showed a significant decline in week 22. In the port of Rotterdam, the price of LNG on 31 May reached US$548/MT. Thus, LNG in Rotterdam is currently priced at US$116 lower than conventional fuel MGO LS.
In the port of Sines in Portugal, the price of LNG as bunker fuel remained steady at US$742/MT, making it US$5 cheaper than MGO LS. The availability of cheaper LNG as an alternative bunker fuel is once again capturing the attention of market participants, making it an attractive choice.
During week 22, the MDI index (the ratio of market bunker prices (MABUX MBP Index) and
the digital bunker benchmark MABUX (MABUX DBP Index)) maintained an undervaluation of 380 HSFO fuel in all four selected ports. The weekly average of the undercharge rose in Rotterdam, Singapore and Fujairah in the range from 1 to 16 points. In Houston, the MDI remained unchanged at minus US$39.
In the VLSFO segment, Singapore remained the only port where overcharge was observed according to the MDI. The overprice average decreased there by 4 points. The remaining three ports were undervalued, with average levels up 7 points in Fujairah and 3 points in Houston, and down 1 point in Rotterdam.
In the MGO LS segment, three ports remain undervalued: Rotterdam, Singapore and
Houston. The average weekly undervaluation level rose in Rotterdam but decreased in Singapore and Houston: minus 3 and minus 11 points, respectively. Fujairah remained the only overvalued port, where the revaluation level saw another reduction of minus US$16.
“We expect there are no uptrend drivers in the global market so far. Bunker indices may show a moderate decline in the upcoming week,” said Sergey Ivanov, director of MABUX.