MABUX Global Bunker Indices Show Moderate Increase, Scrubber Spread Declines

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During the 13th week, the MABUX Global bunker indices showed a consistent, moderate increase across all fuel types, reports MABUX on LinkedIn. 

Global Scrubber Spread

Scrubber Spread (SS) Trends:

  • The global price difference between 380 High Sulfur Fuel Oil (HSFO) and Very Low Sulfur Fuel Oil (VLSFO), known as the MABUX Global Scrubber Spread (SS), has slightly decreased.
  • It fell by $1.65, from $82.38 to $80.73, remaining below the $100.00 breakeven point.
  • The weekly average of this spread, however, saw a minor increase of $0.26.
  • In Rotterdam, the SS Spread experienced a more significant drop of $15.00, falling to $39.00, and the weekly average decreased by $10.50.
  • In Singapore, the SS Spread increased by $2.00, rising to $52.00, with the weekly average also increasing by $10.00.
  • Overall, the current trend suggests that using conventional VLSFO remains more economically viable than using 380 HSFO with scrubbers.

EU Gas Storage Concerns:

  • Several EU member states, including Germany and France, are pushing for flexibility in the EU’s mandate to have gas storage facilities at 90% capacity by November 1 each year.
  • They argue that this flexibility is necessary to avoid price spikes and market speculation.
  • Germany, Italy, and the Netherlands are particularly worried that high forward gas prices during the summer could make gas storage unprofitable for energy companies.
  • Discussions are underway to determine the level of flexibility, with some countries proposing a 10% deviation from the 90% target, and others suggesting a more flexible timeframe.
  • EU gas storage is currently being depleted at the fastest rate in seven years, which is creating challenges for the upcoming summer replenishment season, related to availability, pricing, and the cost of LNG.

Differential Market Index

MABUX Market Differential Index (MDI) findings at the end of week 13:

Overall Trend:

  • The MDI suggests a gradual trend toward fuel undervaluation, particularly in the VLSFO (Very Low Sulfur Fuel Oil) and MGO LS (Marine Gas Oil Low Sulfur) segments.

380 HSFO (High Sulfur Fuel Oil) Segment:

  • Rotterdam and Singapore showed overcharging, meaning market bunker prices (MBP) were higher than the digital bunker benchmark MABUX (DBP).
    • Rotterdam’s weekly average MDI increased by 2 points.
    • Singapore’s weekly average MDI decreased by 12 points.
  • Fujairah and Houston exhibited undervaluation.
    • Fujairah’s underprice levels increased by 13 points.
    • Houston’s underprice levels decreased by 5 points.
  • Rotterdam maintained a near 100% correlation between MBP and DBP.

VLSFO Segment:

  • Rotterdam shifted into the undercharge zone, meaning all four ports (Rotterdam, Singapore, Fujairah, and Houston) are now undervalued.
  • Weekly average MDI values increased:
    • Rotterdam: 10 points
    • Singapore: 3 points
    • Fujairah: 9 points
    • Houston: remained unchanged.
  • Rotterdam remained close to the 100% correlation mark between MBP and DBP.

MGO LS Segment:

  • Rotterdam returned to the undercharge zone, resulting in all four ports being undervalued.
  • Weekly average MDI values increased:
    • Rotterdam: 5 points
    • Singapore: 5 points
    • Fujairah: 8 points
    • Houston: 12 points.

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Source: MABUX on LinkedIn