MABUX fuel indicators show steady upward trend

MABUX fuel indicators show steady upward trend

August 2, 2023

Marine Bunker Exchange (MABUX) global indices displayed a firm upward trend in the previous week. The 380 HSFO experienced an increase of US$15.18 reaching US$525.19/MT.

Similarly, the VLSFO saw a substantial gain of US$21.49, climbing to US$627.82/MT and the MGO saw a significant growth of US$42.48 reaching US$872.8/MT.

“At the time of writing the uptrend prevailed in the global bunker market,” pointed out a MABUX official.

The Global Scrubber Spread (SS) – the price difference between 380 HSFO and VLSFO –
slightly increased and crossed the US$100 mark, at US$102.63. However, the weekly average decreased by US$0.86.

In the port of Rotterdam, the SS Spread widened by US$3, from US$64 to US$67, while the weekly average of SS Spread in Rotterdam grew by US$0.50.

In Singapore, the price difference between 380 HSFO and VLSFO continued to narrow, decreasing by US$3. The weekly average decrease in Singapore was more significant,
amounting to US$29.66.

The reduction in the SS Spread seems to have slowed down at the moment, according to MABUX analysts.

The long-term outlook on global LNG demand is described as “bullish”. Additional 100
million metric tonnes per annum (mmtpa) of capacity will be required to meet demand
growth by the mid-2030s. This is a 25% increase compared to the current global LNG supply and on top of the supply that has already been sanctioned.

Asia will be the driving force of demand in the long term, despite the current European rush to secure LNG to replace Russian gas. New supply – especially from Qatar and the United States – is set to hit the market in 2025-2026, around 80% of new LNG supply by 2030 will come from those two major LNG exporters.

The cost of LNG as bunker fuel at the port of Sines (Portugal) has continued its decline,
reaching US$792/MT on 24 July, which is US$7 lower than the previous week. Notably, on
25 July, the price difference between LNG and conventional fuel favored LNG, showing a gap of US$58, MGO LS was quoted at US$850/MT on that day in the port of Sines.

During Week 30, the MDI index (the ratio of market bunker prices (MABUX MBP Index) and
the digital bunker benchmark MABUX (MABUX DBP Index)) registered underestimations for
all fuels in the selected ports of Rotterdam, Singapore, Fujairah and Houston.

This indicates that the market prices for bunker fuels were lower than the values suggested by the digital benchmark. In the 380 HSFO segment, the average weekly undervaluation margins increased by 1 point in Rotterdam and 2 points in Fujairah but fell by 7 points in Singapore.

In Houston, the MDI showed a 100% correlation between market prices and the digital bunker benchmark, suggesting that prices were accurately aligned with the benchmark in this port.

In the VLSFO segment, the MDI data indicated an average underprice ratio increase of 2
points in Rotterdam, 3 points in Singapore, 4 points in Fujairah, and 1 point in Houston.
In the MGO LS segment, the MDI recorded widening average undervaluation levels in
Rotterdam by 8 points, in Singapore by 1 point, in Fujairah by 19 points, and in Houston by 8 points.

“We expect that the global bunker indexes may continue their upward movement in the
upcoming week,” said Sergey Ivanov, director of MABUX.

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