MABUX indices increase during week 350 (0)

MABUX indices increase during week 35
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August 31, 2023

The MABUX global bunker indices moved slightly higher during Week 35. The 380 HSFO index increased by US$0.48 to US$563.67/MT.

The VLSFO index had a more significant increase of US$6.77 to US$668.40/MT. The MGO index increased strongly by US$18.65, rising from US$968.98/MT to US$988.63/MT.

The Global Scrubber Spread (SS) – the price difference between 380 HSFO and VLSFO – increased somewhat, hitting the US$100 mark (SS breakeven). The average weekly value, on the other hand, fell by US$1.94.

In Rotterdam, the SS Spread increased by US$4 from US$50 last week to US$54. In Rotterdam, the weekly average of SS Spread climbed by US$10. In Singapore, the price differential between 380 HSFO and VLSFO increased the most: by US$41.00, firmly reaching the US$100 mark. The weekly average increased by US$27.50 as well.

“It is expected that the SS Spread will continue moderate gains in the upcoming week,” stated a MABUX official.

Based on data from Global Witness, the European Union has experienced a substantial 40% increase in its imports of liquefied natural gas (LNG) from Russia during the period of January to July 2023, in comparison to the corresponding timeframe in 2021. This growth is attributed to the absence of any bans or sanctions on Russian gas within Europe. Notably, Spain has ascended to the position of the second-largest global purchaser of Russian LNG, closely pursued by Belgium.

According to the data, preceding these two European Union member states is China, which accounted for 20% of Russia’s total LNG exports during the initial seven months of 2023. Spain contributed to 18% of Russia’s overall LNG exports, while Belgium acquired 17%. In the same period of 2021, Spain and Belgium ranked fifth and seventh, respectively, among the principal buyers of Russian LNG. Overall, the EU bought 52% of Russia’s LNG exports between January and July 2023, compared to 49% in 2022 and 39% in 2021.

On 28 August, the price of LNG as bunker fuel in the port of Sines, Portugal, fell to US$820/MT. This was a US$79 drop from the previous week’s price. Notably, the price differential between LNG and conventional fuel increased significantly on 28 August, favouring LNG by US$185. MGO LS was quoted at US$1005/MT in the port of Sines on the same day.

The MDI index (the ratio of market bunker prices (MABUX MBP Index) to the digital bunker benchmark MABUX (MABUX DBP Index) revealed that the underpricing trend continued to dominate the global bunker market across all bunker fuel sectors during Week 35.

Singapore reached the undervaluation zone in the 380 HSFO category, joining Fujairah, while the average weekly underpricing climbed by 31 and 7 points, respectively. The MDI index was overestimated at the other two ports, Rotterdam and Houston. In Rotterdam, the average weekly overcharge decreased by 14 points but increased by 10 points in Houston.

The MDI index revealed that only Singapore was in the overvaluation zone for the VLSFO segment, with its average level lowering by 3 points. Rotterdam and Fujairah remained undervalued. The weekly average of undervaluation in Rotterdam climbed by 5 points, whereas it stayed steady in Fujairah. MDI found a perfect link between market pricing and the digital benchmark in Houston.

All chosen ports in the MGO LS section remained undervalued. The average weekly underpricing increased by 5 points in Rotterdam, 6 points in Singapore, 16 points in Fujairah, and 18 points in Houston.

“We expect that next week the global bunker market will be dominated by a moderate upward evolution,” stated Sergey Ivanov, Director of MABUX.

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