MABUX reports moderate growth in bunker prices

MABUX reports moderate growth in bunker prices

August 11, 2023

Marine Bunker Exchange (MABUX) global indexes showed moderate growth during Week 32 with the 380 HSFO index increasing by US$4 to US$558.48/MT, the VLSFO index adding US$5.44 to US$658/MT in the previous week and the MGO index rising US$3 to US$929.43/MT.

The Global Scrubber Spread (SS), which indicates the price difference between 380 HSFO and VLSFO, increased by US$1.61 to US$104.16. The weekly average, on the other hand, fell by US$1.70. In Rotterdam, the SS Spread fell another US$8 from US$55 last week to US$47 this week. The weekly average of the SS Spread in Rotterdam has also dropped a further US$11. In Singapore, on the other hand, the price difference between 380 HSFO and VLSFO grew by the end of the week: an additional US$13. This index, however, fell to US$28 over the week. This spread’s weekly average dropped by US$20.

The significant drop of SS Spread values below US$100 (called SS breakeven) at the world’s main ports continues to favour low sulphur fuel VLSFO over the combination of HSFO and scrubbers.

On 8 August, European natural gas prices jumped more than 30% as traders worried about a possible reduction in LNG supplies from Australia, the world’s largest exporter of the commodity.

The quick increase was most likely caused by some traders hurrying to liquidate their short positions in response to reports of tightened supply. Europe has failed to negotiate enough long-term LNG contracts to offset the loss of Russian gas supplies, which some analysts said would be pricey next winter and tighten the market.

Despite this, the price of LNG as bunker fuel at the port of Rotterdam fell moderately, reaching US$648/MT on 8 August (down US$18 from the previous week).

As of 8 August, the price differential between LNG and conventional fuel had climbed to US$232 in favour of LNG. MGO LS was quoted at US$880/MT in Rotterdam on the same day.

The MDI index (the ratio of market bunker prices (MABUX MBP Index) to the digital bunker standard MABUX (MABUX DBP Index) observed a transition of certain ports into the overcharge zone during Week 31, although the current tendency of underpricing continued.

Fujairah remained the only undervalued port in the 380 HSFO sector, with an average weekly underpricing of 30 points. Rotterdam entered the overcharge zone, joining Singapore and Houston. The weekly average of overpricing climbed by 18 points in Rotterdam, 28 points in Singapore, and 21 points in Houston.

For the VLSFO section, all four chosen ports were underestimated. The average underpricing fell by 17 points in Rotterdam, 14 points in Singapore, 18 points in Fujairah, and 2 points in Houston.

In the MGO LS segment, the MDI indicated a drop in average undercharge levels by 7 points in Rotterdam, 7 points in Singapore, and a significant 25 points in Fujairah. However, Houston experienced an 8-point rise in the average undercharge level.

Regarding the MGO LS segment, the average undervaluation dropped in Rotterdam by 7 points and in Houston by 9 points. In the other ports, MDI indicated growth, with a 3-point increase in Singapore and a 5-point increase in Fujairah.

“As for the upcoming week, we expect the irregular changes to prevail while the market is in the process of shaping a new distinct trend,” commented Sergey Ivanov, director of MABUX.

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