During Week 29, the MABUX global bunker indices exhibited a moderate downward trend. The 380 HSFO index dropped by $2.58, settling at USD 554.73/MT from USD 557.31/MT the previous week, maintaining a range between $550-560 USD. The VLSFO index fell by $7.33, landing at USD 652.74/MT from USD 660.07/MT last week. Similarly, the MGO index decreased by $10.78, from USD 851.70/MT to USD 840.92/MT. Overall, global bunker indices continued to show a slight decline.
Scrubber Spread Analysis
The MABUX Global Scrubber Spread (SS), which represents the price difference between 380 HSFO and VLSFO, also experienced a moderate decline of $4.75, falling to $98.01 from $102.76 last week, once again dipping below the $100.00 break point. The weekly average dropped by $3.15. In Rotterdam, the SS Spread increased by $3.00 to $66.00 from $63.00, though the weekly average at the port decreased by $2.50. In Singapore, the 380 HSFO/VLSFO price differential remained unchanged at $99.00, consistently staying below the $100.00 mark, with the port’s weekly average decreasing by $8.00. The Global SS Spread and the index values in these ports are expected to remain relatively stable below the critical $100 mark next week.
European Gas Prices and LNG as Bunker Fuel
In Europe, TTF gas prices remained stable despite weak demand and high storage levels, with additional support from lower LNG inflows, unplanned outages, and geopolitical uncertainties. These factors contributed to higher gas prices in the EU. During Week 29, the European gas benchmark TTF saw moderate growth, increasing by 1.462 EUR/MWh to 32.797 EUR/MWh from 31.335 EUR/MWh last week.
Meanwhile, the price of LNG as bunker fuel in the port of Sines, Portugal, continued to decline, reaching 712 USD/MT on July 16, a decrease of $31 compared to the previous week. The price difference between LNG and conventional fuel on July 16 widened to $120 in favor of LNG, up from $113 a week earlier, with MGO LS quoted at 832 USD/MT in the port of Sines.
MDI Index and Bunker Price Trends
The MDI index, which tracks the correlation between market bunker prices (MABUX MBP Index) and the MABUX digital bunker benchmark (MABUX DBP Index), recorded various trends across the world’s four largest hubs (Rotterdam, Singapore, Fujairah, and Houston) during Week 29:
- 380 HSFO Segment: All four ports were in the undercharge zone, with weekly averages decreasing by 4 points in Rotterdam, 5 points in Singapore, 3 points in Fujairah, and 4 points in Houston.
- VLSFO Segment: All four ports were undervalued, with average weekly levels dropping by 3 points in Rotterdam and Fujairah, while remaining unchanged in Singapore and Houston.
- MGO LS Segment: Houston shifted to the overcharge zone, becoming the only overvalued port, with the weekly overprice average widening by 21 points. The other three ports remained undervalued, with weekly averages rising by 7 points in Rotterdam but falling by 7 points in Singapore and 16 points in Fujairah. MDI indices in Rotterdam and Singapore consistently stayed above the $100 mark.
By the end of the week, Houston was the sole overvalued port in the MGO LS segment, while all fuel types remained undervalued in the other three ports. It is anticipated that the overpricing in Houston will be temporary, and the trend towards underestimation of all fuel types will reemerge across all selected ports next week.
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Source: LinkedIn India
