In Week 43, MABUX global bunker indices exhibited a steady upward trend. The 380 HSFO index increased by 10.56 USD, rising from 527.39 USD/MT last week to 537.95 USD/MT. Similarly, the VLSFO index saw an increase of 8.41 USD, moving from 606.96 USD/MT to 615.37 USD/MT. The MGO index added 8.49 USD, climbing from 761.39 USD/MT to 769.88 USD/MT. The global bunker indices have entered a slight downward correction as of this writing.
Scrubber Spread Analysis
The MABUX Global Scrubber Spread (SS)—the price difference between 380 HSFO and VLSFO—continued to decline, decreasing by $2.15 from $79.57 last week to $77.42, remaining consistently below the $100.00 SS Breakeven mark. The weekly average also dropped by $4.30. In Rotterdam, the SS Spread exhibited moderate growth, increasing by $6.00 (from $52.00 to $58.00), with the weekly average rising by $18.83. In Singapore, the price difference narrowed by $11.00, moving from $117.00 to $106.00, getting closer to the $100.00 mark. Overall, SS Spread values are expected to continue narrowing in the coming week.
European Gas Price Developments
European gas prices have seen modest increases recently due to supply concerns intensified by heightened tensions in the Middle East following Iran’s missile strikes on Israel earlier this month. These developments have led to several LNG cargoes being diverted from Asia to Europe. As of October 22, European regional storage facilities were 95.32% full, which, while substantial, may not suffice to meet winter demand. Current storage levels are slightly below those of last year, primarily due to fewer incoming LNG cargoes. Although rerouting LNG shipments to Europe may alleviate some supply issues, prices are still anticipated to rise due to seasonal demand and increasing competition between Europe and Asia for LNG. By the end of Week 43, the European gas benchmark TTF recorded moderate growth, rising by 0.731 EUR/MWh from 39.973 EUR/MWh to 40.704 EUR/MWh.
LNG Prices in Sines
The price of LNG as a bunker fuel in the port of Sines, Portugal, decreased by 10 USD by the end of the week, reaching 867 USD/MT on October 21. Meanwhile, the price gap between LNG and conventional fuel significantly widened on October 21, with the difference favoring MGO LS increasing to 154 USD, up from 123 USD the previous week. On the same day, MGO LS was quoted at 713 USD/MT in Sines.
Market Dynamics in Major Ports
During Week 43, the MDI index—reflecting the correlation between market bunker prices (MABUX MBP Index) and MABUX digital bunker benchmark (MABUX DBP Index)—showed various trends across four major global hubs: Rotterdam, Singapore, Fujairah, and Houston. In the 380 HSFO segment, Rotterdam was the only overvalued port, with its weekly average falling by 4 points. In the VLSFO segment, Singapore and Fujairah remained overvalued, with increases in their weekly averages, while Rotterdam and Houston were undervalued. The MGO LS segment saw all four ports remaining in the overvalued zone, but the averages narrowed in each location.
Future Outlook for the Bunker Market
By the end of the week, the balance of overvalued and undervalued ports remained largely unchanged, with a continued trend toward undervaluation across all types of bunker fuel. Looking ahead, the implementation of the Mediterranean Sea 0.10% Sulphur Emission Control Area (MedECA) next May is anticipated to reduce demand for 0.50% VLSFO in the region. While similar regulations have shown that refineries and bunker suppliers can adapt quickly, shifts in demand are expected to impact bunker fuel prices and commodity flows. Gibson estimates that VLSFO demand could drop by as much as 6 million tonnes annually as ships transition to alternative fuel types. In conclusion, the global bunker market is expected to maintain the potential for moderate growth in the coming week.
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Source: LinkedIn
