Marine Bunker Exchange (MABUX) reported a moderate upward movement in global bunker prices during the 24th week of the year.
The 380 HSFO index rose to US$481/MT, the VLSFO increased to US$602/MT and the MGO index climbed to US$794/MT.
“At the time of writing, the market was in an upward trend,” noted a MABUX official in the their weekly report.
The Global Scrubber Spread (SS), or the price difference between 380 HSFO and VLSFO, fell by US$2.94 this week. Despite the drop, the weekly average rose by US$1.7.
The SS Spread continued to tumble in Rotterdam, plunging US$11 to US$79. The average weekly value of the SS Spread in Rotterdam fell by US$3.17 as well.
In Singapore, the price differential between 380 HSFO and VLSFO climbed by US$4 this week, while the weekly average increased by US$7.5.
“In general, the dynamics of SS Spread changes do not follow a consistent pattern,” commented a MABUX analyst.
Despite the lowest natural gas prices in two years, Europe’s natural gas demand remains poor, falling in May from the previous year as sectors slow and key economies approach recession. Natural gas demand in the major European economies of Germany, the United Kingdom, France, Italy, Spain, and the Netherlands fell 9.7% in May compared to the same month in 2022.
However, the price of LNG as bunker fuel has risen slightly in the port of Sines in Portugal. On 12 June, the price hit US$772/MT.
During week 24, the MDI index (the ratio of market bunker pricing (MABUX MBP Index) to MABUX digital bunker benchmark MABUX (MABUX DBP Index)) consistently showed that 380 HSFO fuel was undervalued in all four selected ports. In Rotterdam, Fujairah, and Houston, the weekly average undercharge fell by 4 to 7 points. In Singapore, however, the MDI increased by US$3. Overall, MDI changes for the 380 HSFO sector were minor.
Singapore remained the sole overvalued port in the VLSFO segment, according to MDI data. The average surcharge in this area climbed by four points. The remaining three ports remained inexpensive, with averages in Rotterdam down 4 points, Fujairah down 13 points (almost 100% market price-to-digital benchmark correlation), and Houston dropping.
Rotterdam, Singapore, and Houston remain undervalued in the MGO LS segment. In all three ports, the average weekly underestimation climbed by 3 to 5 points. Fujairah, on the other hand, remained the only overpriced port, with the overpricing falling by another US$9.
“We expect minimal changes in the global bunker market over the upcoming week. Bunker indices may continue slight irregular fluctuations,” stated Sergey Ivanov, director of MABUX.