- Bunker fuel indices rose sharply in Week 25.
- Scrubber spread narrowed further, keeping VLSFO economically favorable.
- EU adjusts gas storage targets to boost flexibility.
- LNG bunker prices rebound; conventional fuels remain competitive.
- Market valuation trend remains tilted toward undervaluation.
Global bunker prices surged during the 25th week, according to the latest data from MABUX, as geopolitical instability in the Middle East drove up fuel costs. The 380 HSFO index increased by USD 47.17, breaking above the USD 500 mark to reach USD 514.24/MT, up from USD 467.07/MT the previous week. The VLSFO index also saw a strong rise, gaining USD 41.82 to close at USD 584.26/MT. Meanwhile, MGO prices jumped USD 60.65 to USD 789.70/MT.
The upward trend continues to dominate the global bunker market, with no immediate signs of easing.
Scrubber Spread Narrows Further
The MABUX Global Scrubber Spread (SS)—the price difference between 380 HSFO and VLSFO—narrowed by USD 5.35 over the week, dropping to USD 70.02. This value remains well below the breakeven threshold of USD 100. In Rotterdam, the spread dropped slightly by USD 1.00, while Singapore saw a moderate increase of USD 4.00.
Overall, scrubber economics remain unattractive, with VLSFO continuing to be the more cost-effective option compared to HSFO with scrubber systems. No major changes in spread dynamics are anticipated in the coming week.
EU Eases Gas Storage Targets
In a bid to support energy flexibility, the European Parliament and EU member states reached a provisional agreement to ease natural gas storage requirements. The revised rules allow for a 10% deviation from the 90% fill target, with countries now allowed to meet the threshold any time between October 1 and December 1, rather than by the fixed November 1 deadline.
This comes in response to warnings from key gas-consuming countries that they might struggle to meet rigid targets under adverse market conditions without resorting to subsidies.
As of June 17, EU gas storage facilities were 54.05% full, up 2.26% from the previous week, but still trailing significantly behind the year-start level of 71.33%.
TTF Gas Prices and LNG Bunker Trends
European gas benchmark TTF recorded a sharp upward move, rising by €4.67/MWh to €39.31/MWh by the end of Week 25. In the LNG bunker fuel market, prices at the Port of Sines rose by USD 53 to reach USD 839/MT.
Despite this increase, LNG remains less attractive than conventional marine fuels, with the price gap narrowing to just USD 83 in favor of conventional fuel. As of June 16, MGO LS was quoted at USD 756/MT at Sines.
Market Differential Index (MDI): Undervaluation Persists
The MABUX Market Differential Index (MDI), which tracks the alignment between market prices and digital benchmark prices, revealed continued undervaluation in most key bunker hubs.
In the 380 HSFO segment, all four major ports—Rotterdam, Singapore, Fujairah, and Houston—were assessed as undervalued. Both Rotterdam and Singapore shifted into this zone during the week, and their MDI values edged closer to full alignment between MBP and DBP.
The VLSFO segment also showed undervaluation across the board. Weekly average MDI values rose in all ports, with Rotterdam even hitting a full 100% correlation between its market and benchmark prices.
In contrast, the MGO LS segment saw Rotterdam re-enter the overvalued category, while the other ports—Singapore, Fujairah, and Houston—remained undervalued. Fujairah’s MDI remained notably high, exceeding the $100 threshold.
Outlook: Undervaluation Remains the Dominant Theme
Despite fluctuations in specific segments and ports, the overall bunker market continues to lean toward undervaluation. VLSFO remains economically favorable, scrubber spreads are below the breakeven point, and MDI values suggest further room for price alignment. This trend is expected to continue into the following week unless significant new geopolitical or economic factors emerge.
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Source: MABUX on LinkedIn
