- Rotterdam’s B24-VLSFO HBE is up $47/mt, now at a $163/mt premium.
- VLSFO prices dropped $19/mt in Singapore and $24/mt in Rotterdam.
- Tight VLSFO availability in Singapore and Rotterdam, with 5-10 days lead time.
The B24-VLSFO UCOME in Singapore was cut $6/mt below pure VLSFO over the last week and stands at a premium of about $155/mt today. At the same time, it lost by as much as a steep margin versus LNG, increasing its discount to $43/mt from last week’s $15/mt discount. This development happened when LNG prices had jumped $14/mt following a strengthening gas demand in Asia while B24-VLSFO UCOME plummeted $13/mt after the falling prices of VLSFO, reports Engine.
Rotterdam B24-VLSFO HBE Price Rise
In Rotterdam, B24-VLSFO HBE has moved from a $116/mt premium over pure VLSFO to a $163/mt premium. At the same time, B24-VLSFO HBE is now at a $76/mt discount to LNG in the port. B24-LSMGO HBE has also entered a competitive range of $10-20/mt of LNG, depending on the inclusion of EU Allowance (EUA) costs. B24 blends have fewer EUAs required than LNG due to EU ETS regulations.
VLSFO Price Drop
VLSFO prices fell $19/mt in Singapore and $24/mt in Rotterdam as the front-month ICE Brent values declined by $3.33/bbl ($24/mt). Although prices are lower, VLSFO remains tight in Singapore, with a lead time recommendation of 10 days. Prompt deliveries are being quoted at higher prices by some suppliers. Rotterdam and the ARA region remain in tight HSFO and VLSFO supply with a 5-7 day lead recommended. Biofuel stocks within the ARA region are reported to be drawn down by 2% as of date, against the levels at the start of October.
Biofuels Price Developments
In Singapore, the price of B24-VLSFO UCOME declined by $13/mt following the fall of $19/mt in regular VLSFO. On the other hand, B24-LSMGO UCOME has registered a lower drop of $6/mt. At Rotterdam, B24-VLSFO HBE and B24-LSMGO HBE have appreciated by $22-24/mt, supported by a higher price of palm oil mill effluent methyl ester (POMEME). POMEME prices have risen by $71/mt to $1,463/mt, and as one of the major biofuel feedstocks, it is eligible for advanced biofuel credits under the Dutch HBE system.
LNG Price Trends
As is observed in Singapore, gains for LNG bunker prices amounted to $14/mt by way of gains in the NYMEX Japan/Korea Marker (JKM) contract. This rise owes much to the competition wherein the European buyers are grabbing as much LNG contracts under the pressure of Asian buyers. LNG bunker prices jumped $38/mt as of Rotterdam following the counterpart in the Dutch TTF Natural Gas contract.
Concerns Over Gas Supply and Storage in Europe
Europe’s gas storage stands at 85%, somewhat below the five-year average of 88%. A threat is seen in the possibility of the piped Russian gas coming through Ukraine not reaching year-end. This could threaten the stability of supply. Although the market should balance by the end of the 2024-2025 heating season, storage refills remain a challenge for the summer of 2025.
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Source: Engine
