LNG overtakes B24-VLSFO HBE in Rotterdam.Rotterdam’s LNG only $4/mt cheaper than B24-LSMGO HBE.Dutch rebates for B30-VLSFO surpass $200/mt, reports Engine.
Direct choice
Few shipowners might have a direct choice between LNG and bio-blends, as these fuels typically cater to different vessel types and operational needs. But for dual-fuel shipowners in Rotterdam choosing between the two, it is now costlier to bunker LNG than B24-VLSFO, which contains 24% palm oil mill effluent methyl ester (POMEME)-based biofuel and 76% VLSFO.
B24 is a much less common blending ratio than B30 is in Rotterdam. But in this article series we use B24 for both Rotterdam and Singapore to be able to compare them like-for-like.
This is the first time that LNG has been priced above B24-VLSFO in Rotterdam since the Fuel Switch Snapshot reporting began on 12 March. Back then, LNG was the port’s most affordable of all fuels – including HSFO.
LNG now costs just $4/mt less than B24-LSMGO HBE in Rotterdam, a sharp narrowing from a substantial $102/mt discount seen the previous week.
VLSFO
The front-month ICE Brent futures contract has dropped by $2.83/bbl ($21/mt) over the past week. Rotterdam’s VLSFO benchmark has fallen by $10/mt, while Singapore’s VLSFO benchmark has made a steeper decline of $35/mt.
Biofuels
Rotterdam’s B24-VLSFO HBE price has plummeted by $46/mt in the past week, and its premium over conventional VLSFO has decreased by $36/mt to $108/mt now.
Bigger theoretical Dutch HBE rebates have exerted downward pressure on both biofuel benchmarks.
Singapore’s B24-VLSFO UCOME price has dropped by $20/mt in the past week. The bio-blend has drawn some support from a $25/mt rise in the underlying UCOME FOB China price assessed by PRIMA. But the ENGINE VLSFO price, which has more impact towards the calculated B24-VLSFO UCOME price, has gone down by $35/mt.
LNG
Rotterdam’s LNG bunker price has surged by $36/mt over the past week, reflecting an increase in the broader Dutch TTF Natural Gas contract. The rise is attributed to renewed concerns over potential disruptions to Russian gas pipeline flows into Europe.
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Source: Engine
